The urbanization of the intelligent

I'm not sure if you need a subscription to read it, but I'm hoping not. I'm talking about Richard Florida's piece in The Atlantic noting the huge demographic shift over the last 30 years, in which the most educated people have concentrated themselves in certain big cities (e.g., Boston and Austin, not Cleveland and Milwaukee). You have to see the two maps published with the piece to appreciate what he's talking about. The first shows that the college-educated were fairly widely dispersed throughout the country in 1970; by 2000, though, certain urban areas had drained much of the rest of the country pale. That is, as these urban areas (called "means metros" by Florida) grew richer in brainpower, much of the rest of the country grew poorer.

Writes Florida:

What’s behind this phenomenon? Some of the reasons for it are essentially aesthetic—many of the means metros are beautiful, energizing, and fun to live in. But there is another reason, rooted in economics: increasingly, the most talented and ambitious people need to live in a means metro in order to realize their full economic value.

The physical proximity of talented, highly educated people has a powerful effect on innovation and economic growth—in fact, the Nobel Prize–winning economist Robert Lucas declared the multiplier effects that stem from talent clustering to be the primary determinant of growth. That’s all the more true in a postindustrial economy dependent on creativity, intellectual property, and high-tech innovation.

Places that bring together diverse talent accelerate the local rate of economic evolution. When large numbers of entrepreneurs, financiers, engineers, designers, and other smart, creative people are constantly bumping into one another inside and outside of work, business ideas are more quickly formed, sharpened, executed, and—if successful—expanded. The more smart people, and the denser the connections between them, the faster it all goes.

That makes intuitive sense, though Joel Kotkin makes a good case that Florida's "creative class" hypothesis is pretty thin, and that rather than spending money developing hipster arts districts, cities that want to attract the solid middle class that they need to thrive would do better to invest more in bread-and-butter stuff like a good police force, reliable infrastructure, decent schools and the kinds of things that meet the needs of families, not the young and unattached. Still, the demographic numbers (and real-estate prices) have an important story to tell about the growing desirability of urban areas to those with high incomes -- which is to say, those driving the economy. Florida says it's easy to imagine that these urban areas will be priced out of the reach of the middle class as the upper classes bid up real estate prices. Figuring out how to manage this geographic sorting-out between the intellectual elite (who become an economic elite in a meritocratic information economy) and everyone else will be a big challenge this century.

Meanwhile, a colleague today told me of a gated community in a prosperous local suburb that contains within it another gated community, so the people who live in the $700,000 houses can be protected from the people who live in the $300,000 houses on the outer rim. This is going to be an interesting century.