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Keys to the City

Keys to the City: How Economics, Institutions, Social Interaction, and Politics Shape Development

Michael Storper
Copyright Date: 2013
Pages: 296
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  • Book Info
    Keys to the City
    Book Description:

    Why do some cities grow economically while others decline? Why do some show sustained economic performance while others cycle up and down? InKeys to the City, Michael Storper, one of the world's leading economic geographers, looks at why we should consider economic development issues within a regional context--at the level of the city-region--and why city economies develop unequally. Storper identifies four contexts that shape urban economic development: economic, institutional, innovational and interactional, and political. The book explores how these contexts operate and how they interact, leading to developmental success in some regions and failure in others. Demonstrating that the global economy is increasingly driven by its major cities, the keys to the city are the keys to global development. In his conclusion, Storper specifies eight rules of economic development targeted at policymakers.Keys to the Cityexplains why economists, sociologists, and political scientists should take geography seriously.

    eISBN: 978-1-4008-4626-9
    Subjects: Economics, Sociology, Business, Population Studies, Political Science

Table of Contents

  1. 1 Introduction. Cities and Regions in the Twenty-First Century: Why Do They Develop and Change?
    (pp. 1-12)

    If the current residents of many countries were transported back just a few decades, they would not recognize many aspects of their cities and regions. This is paradoxical, since cities are durable structures made of concrete and steel, and in many ways, slow to change. The iconic dimensions of cities—Manhattan’s skyscrapers, Los Angeles’ long boulevards and freeways, and the historical core of Paris—stay with us. But many other dimensions of cities, from the granularity of their neighborhoods to the size and organization of entire metropolitan regions, and the map of winning and losing regions, change radically in small...


    • 2 Workshops of the World Economy: PEOPLE, JOBS, AND PLACES
      (pp. 14-31)

      The development of cities and evolution of urban systems occurs through the movement of people and jobs (firms) between places.¹ Consider the major changes in the geographical distribution of people and jobs that have taken place in just a few decades. The biggest and richest cities in the US urban system today include many places that were not there just a short while ago, and many of the formerly biggest and richest have slipped well down the ranks of size and wealth (see table 1.1 again). Houston and Dallas are big and rich; Seattle has become relatively richer; San Francisco...

    • 3 The Motor of Urban Economies: SPECIALIZATION
      (pp. 32-51)

      Many of the world’s most notable city-regions are identified with their iconic industries: New York, Hong Kong, and London with finance; Los Angeles with entertainment; San Francisco with information technology; Houston with oil equipment; Milan with fashion; and Nashville with country music. In the nineteenth century, many manufacturing industries that are today quite spread out were typically concentrated in clusters in certain cities (Scranton 1983; Krugman 2011). This is still true now of some smaller and less well-known cities. Packaging machinery is produced in a cluster in Bologna; Stuttgart is involved in mechanical engineering, but all in all, manufacturing has...

    • 4 Disruptive Innovation: GEOGRAPHY AND ECONOMICS
      (pp. 52-66)

      At any given moment, some cities and regions are much richer than others. Currently, city-regions with high per capita incomes include places such as San Francisco, Washington, DC, and Zurich, whose incomes are about a third higher than their respective national economies’ average, and those national economies are already rich in the hierarchy of world economies. Within countries like the United States, San Francisco’s per capita income is about three times that of the poorest metropolitan areas. And as I noted in chapter 2, these differences are not just in money terms; they persist (though reduced somewhat) even when we...

    • 5 Cities and Individuals: HOW WE SHAPE CITIES, BUT NOT THE WAY WE WANT TO
      (pp. 67-90)

      I am now going to step down a level in geographical scale from examining the interregional pattern of urban economic development to look inside the space of the city-region.¹ The internal arrangement of city-regions has a lot to do with how they look and feel, and may have something to do with their economic performance, although this is not any solid proof yet for this latter notion. The space of many metropolitan areas is highly coveted by firms, households, and interest groups, and as such, the preferences and choices of individuals—firms, workers, consumers, and households—are a force in...


    • 6 Winner and Loser Regions: THE “WHERE” OF DEVELOPMENT
      (pp. 92-103)

      The origins of the economic specialization of particular places are in some ways the elusive holy grail of both urban and development economics. The economy consists of a ladder of specializations from more to less complex and skilled. Development clubs form around positions on this ladder. This then tells us about the specialization of an economy, and we can tell you much about its level of wages, prices, and per capita income.

      Specialization changes; it is pushed along by the forces of technology, trade costs, and innovation and learning. This shifts the positions of national and regional economies on the...

    • 7 Communities and the Economy
      (pp. 104-114)

      In the early twentieth-century United States, the Progressive movement attempted to reform urban political institutions by combating the “capture” of city governments along with their use for private gain by clans and mafia-like political networks. Such groups did not disappear, but limited checks and balances on their use of public power are typically now in place in most advanced democracies, although enforcement is highly uneven.

      In practice, however, there is little agreement on when groups or informal networks are beneficial, and when they are bad for the economic life of a city. When the African American elite of Los Angeles...

    • 8 Robust Action: Society, Community, and Development
      (pp. 115-138)

      Some analysts describe California’s Silicon Valley, the heart of the world’s microelectronics and Internet industries, as a tightly woven community whose economic performance depends on informal networks of entrepreneurs and technonerds, much in the way I analyzed in the previous chapter (Saxenian 1994; Piore and Sabel 1984). But others portray it as a set of overlapping markets, with research universities, government financing, venture capitalists, law firms, stock options, high labor mobility, brutal competition, and “accountability” (reputation) underlying its business networks (Cohen and Fields 1999). In the latter version, Silicon Valley takes US commercial culture to its limits; in the former,...


    • 9 Technology, Globalization, and Local Interaction
      (pp. 140-155)

      Globalization and local interaction are complementary. This is nowhere more true than in the critical activity of innovation. Information, technology, and skills circulate in a global space more easily, more completely, and at speeds never before seen. Yet the evidence on the importance of city-regions to innovation is abundant. Rates of patenting and invention are higher in dense and—for the most part—big city-regions than elsewhere. The technological profiles of city-regions are also highly varied; city-regions specialize in different areas of innovation. Science and engineering are global, and they speak the global Esperanto of math and statistics. Yet the...

    • 10 Local Context: THE GENIUS OF CITIES
      (pp. 156-166)

      German and US cars are systematically different in quality, feel, and performance. Yet they share a great deal of technology and embodied engineering knowledge, and their designs incorporate elements obtained through imitation and mutual observation. Economics has long struggled with how to explain differences in the quality of outputs of economies with similar income levels and similar average factor productivity.¹ When goods and services are tradable, and the factors used to make them are mobile, there is no clear reason why such differences should exist. Perhaps Germany and the United States have subtle—unobservable—differences in factor endowments for producing...

    • 11 Face-to-Face Contact
      (pp. 167-182)

      Extremely dense urban centers fascinate us: Why are all those people crowding so closely together?¹ In general, density intrigues economists, because there are so many inconveniences—congestion costs and other negative externalities—associated with it. Dense office districts, clusters of galleries, and nightlife neighborhoods are all expressions of the continuing hold that interaction has on us. It cannot be because of the costs of transport, which have declined so much. Preferences for a dense form of development such as Hong Kong or Manhattan, or old plus dense plus beautiful cities such as Paris or London, do not seem to explain...


      (pp. 184-203)

      Are cities really that important? If one thinks about some of the most vital issues for humanity—war and peace, economic development, macroeconomics, social mobility, education, technology, the environment, or art and culture—it’s not immediately evident that cities are high on the list of their causes. Most wars do not seem to be the direct result of the existence of cities, nor in the modern era are they between cities. Technology advances largely because of science, engineering, property rights, markets, and culture. Culture and art are produced everywhere, and not necessarily in cities.

      And yet at least since the...

    • 13 Justice, Efficiency, and Cities: SHOULD REGIONS HELP ONE ANOTHER?
      (pp. 204-223)

      Economics is inherently concerned with justice, and all economics has normative foundations, whether these are implicit or explicit. Justice concerns both the economic process (“fair” interactions) and economic outcomes (“good” consequences). Economics is also centrally concerned with efficiency. Efficiency can be conceived of as principally static and allocational (how to get the most out of resources), or dynamic (how to make productivity increase as well as generate growth and development). Modern economics formulates the relations between these two concerns in the first fundamental theorem of welfare economics, wherein an optimal allocation of resources comes about because we use the right...

  6. Conclusion. Dear Policymaker: SOME KEYS FOR YOU
    (pp. 224-228)

    As chair of the Research Committee, I am grateful for the unusual opportunity to explore the state of what we know about the causes and dynamics of urban and regional development. The commission did this out of a desire to look at deep, long-term causes. Our report is highly academic, and so we want to provide you with a “bottom line” here.

    Cities are workshops, not playgrounds: economic development is fundamentally about the development of the productive forces of a region. The development of the region’s productive forces will largely determine its skill mix, population changes, and income level.