Monday, January 04, 2016

Economic Geography of the Cloud

An abundance of digital data predicts where the jobs will be.

Theme: Economic restructuring

Subject Article: "A Surgery Center That Doubles as an Idea Lab."

Other Links: 1. "Google to Make Driverless Cars an Alphabet Company in 2016."
2. "IBM’s latest deal is a new test case for the big data economy."
3. "'Moneyball' meets medicine: DePodesta joins Topol at Scripps."
4. "Seattle Is the Next Detroit."
5. "Time travel: An isochronic map shows where to go, how long it took to get there – and what changes were on the way."
6. "The next civil rights issue of our time."
7. "Buckaroo Banzai - There You Are."

Postscript: Flipping my post on its head, "The Urban, Infrastructural Geography Of ‘The Cloud’." If you are interested in walking into the cloud, read that. This understanding is backwards. The data a user consumes comes from the cloud, which is located in some physical location that conforms to some rhyme and reason that looks like economic geography. The economic geography I'm describing is a smartphone input. The "user" produces data, which goes into the cloud. That data input is just noise, lots of information with no rhyme or reason until some algorithm finds the signal and transforms all those 1s and 0s into knowledge.

Wednesday, December 16, 2015

Mapping Yesterday's Economic Geography, Today

The economy we measure isn't the economy we have.

Theme: Ironic demography

Subject Article: "Time travel: An isochronic map shows where to go, how long it took to get there – and what changes were on the way."

Other Links: 1. "Commentary: Modernising Economic Statistics: Why It Matters."
2. "Demographic Deception."
3. "American Experience Transcript: Henry Ford."
4. "Seattle Is the Next Detroit."
5. "What GDP can’t tell us: Politicians pay too much attention to this outdated indicator of economic growth."

Postscript: Lurking beneath the surface of my last two posts is the debate about the productivity paradox. Either the best days of innovation are behind us or ahead of us. Regardless, the benefits of new technologies aren't showing up in the productivity statistics. For the techno-optimists, a possible (partial) explanation:

This theory asserts that productivity growth in health care is inherently low for the same reason it is in education: Productivity-enhancing technologies cannot easily replace human doctors or teachers. In contrast with, say, manufacturing — a sector in which machines have rapidly taken over functions that workers used to do, and have done them better and more cheaply — there are, at least for the time being, far fewer machines that can step in and outperform doctors, nurses or other health sector jobs.

To be crude, the growing share of eds/meds employment for the overall labor market may be dragging down the efficacy of technology to boost productivity. What if the world is on the cusp of rapid advances in the productivity and efficiency of health care services? What if, indeed:

My favorite example is electronic medical records (my wife is a doctor), which have tremendous potential to enhance the efficiency of healthcare delivery in the US. Even today, most information on patient care is transmitted between clinics and hospitals, and between generalists and specialists, by fax and telephone. A less efficient system is hard to imagine – other, that is, than attempting to coordinate patient care in the traditional way while undertaking the transition to electronic record keeping. New systems are being adopted and serially abandoned as their deficiencies are discovered. Different medical clinics and hospitals are installing systems that are incompatible and unable to communicate with one another.

Doctors will one day look back on all of this as healthy experimentation. For the moment, however, they are tearing their hair out. They are delivering less patient care as they spend more time hunched over their laptops, inputting data that adds nothing, currently, to their productivity.

Once all health care data is digitized, innovation should come fast and furious.

Monday, December 14, 2015

Seattle Is the Next Detroit

Henry Ford and Detroit radically changed the economic geography of the world. Now, Jeff Bezos and Seattle are poised to do the same.

Theme: Economic geography

Subject Article: "Amazon growing faster than ever — adds record 18,000 workers in quarter to top 183,000 globally."

Other Links: 1. "Beyond Rust: Metropolitan Pittsburgh and the Fate of Industrial America."
2. "The Second Machine Age Is Dying."
3. "Amazon’s unprecedented growth is too risky for Seattle."
4. "Census: Seattle is the fastest-growing big city in the U.S."
5. "Seattle’s population boom approaching Gold Rush numbers."
6. "American Experience Transcript: Henry Ford."
7. "Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley."
8. "American Experience: Silicon Valley."
9. "‘The Rise and Fall of Urban Economies.’"

Postscript: Amazon will remake economic geography in more ways than just the cloud:

Amazon has been investing heavily in the logistics needed to extend all the way through its delivery chain. It is buying its own truck trailers, hiring on-demand delivery workers and building a new type of delivery hub — with technology that has thus far been kept under wraps — in major cities from Seattle to New York.

Analysts believe door to door delivery could be the next big sector that Amazon disrupts, in the same way it shook up cloud computing services by launching Amazon Web Services.

“The logical next step is, if you are going to have all this infrastructure, why not open it up to be a competitor to logistics networks like FedEx and UPS,” says Scot Wingo, executive chairman of ChannelAdvisor, a software provider for retailers that use Amazon and eBay. “I fully believe it’s something they could go after and be successful at.”

AWS is a much bigger disruption than the reinvention of logistics. In fact, the cloud allows Amazon to take on FedEx and UPS, dominating online retail. For now, I thinking AWS will shape where we work. A new type of delivery hub could shape where we live.

Wednesday, November 18, 2015

Los Angeles Is What New York Wants to Be When It Grows Up

If New York City is your adolescent self, then Los Angeles is what you aspire to.

Theme: Urban hierarchies

Subject Article: "How the Steady Stream of Creative Talent Moving From N.Y. to L.A. Became a Flood."

Other Links: 1. "Ed Soja 1940 - 2015."

Postscript: I'm wondering aloud if Los Angeles or someplace else could supplant New York City as the best talent refinery in the United States (if not the world). NYC could be enjoying the momentum of mesofacts. Or, NYC might be unassailable, as per the rank-size rule. I suspect the latter is true. See NYLON. Regardless, the bigger map is one of life cycles and the expanding scale of geography. Instead of leaving Manhattan for a Connecticut suburb, one migrates to Los Angeles.

Monday, November 16, 2015

Lock-Out From Prosperity

California is a fortress of gentrification.

Theme: Geography of gentrification

Subject Article: "The Lock-in Effect of California's Proposition 13."

Other Links: 1. "The Geography of 'Displacement.'"
2. "When Moving Matters: Residential and Economic Mobility Trends in America, 1880-2010."
3. "For Millennials, Buying an Unaffordable Home Isn’t Always a Bad Idea."
4. "So You’re Moving To Portland."

Postscript: Article is Oregon-centric, but does a nice job of discussing interstate and intra-state migration in disaggregated terms. Using rates, California does a poor job of attracting new residents. However, the state does a "good" job of retaining them. Both trends can thank Prop 13. I'd love to know the percent of in-state movers who are renters.

Friday, November 13, 2015

Sociolinguistics and the Geography of Innovation

The decline of the Southern drawl maps the diffusion of knowledge production in the United States.

Theme: Geography of economic development

Subject Article: "As a Southern community changes, an accent fades: Southern accents are declining in North Carolina. What does that tell us about social dynamics?"

Other Links: 1. "Altered States: A Perspective on 75 Years of State Income Growth."
2. "Debunking Texas Exceptionalism: De-Regulation Will Not Save Us."
3. "Fortresses of Globalization and Wilmington, Delaware."

Postscript: From "Interact with a wider circle and your ideas will take flight":

Decades ago, the University of Chicago sociologist Ron Burt showed that what matters about a social network, whether face-to-face or virtual, is neither its size nor the prominence of its contacts but the extent to which it provides exposure to people and ideas you do not already know.

The diminishing Southern accent is an indicator of a wider circle of ideas, which spurs innovation. Migration, not proximity nor density nor tolerance, foments creativity.

Tuesday, November 10, 2015

Goldilocks and the Geography of Innovation

A sweet spot in the Technology Readiness Level attracts private industry.

Theme: Economic geography of innovation

Subject Article: "Uber Would Like to Buy Your Robotics Department."

Other Links: 1. "Richard Florida, Roger Martin and David Wolfe on getting innovation right."
2. "Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley."
3. "From Metal to Minds: Economic Restructuring in the Rust Belt."
4. "Boston Versus Silicon Valley: Advantage Beantown."
5. "Toyota Invests $1 Billion in Artificial Intelligence in U.S."
6. "The Valley of Death."

Postscript: In "Engine or Infrastructure? The University Role in Economic Development" (1999), Richard Florida writes:

It is quite clear that Silicon Valley or the Cambridge/Boston regions are not the only places with excellent universities working in areas of potential commercial importance.  One way to begin to structure the problem is to think of the relationship between the university and the economy as composing a simple two-dimensional system, in which the university transmits a signal, which the regional economic environment must absorb.  Increasing the volume of the signal need not result in effective transmission or absorption if the region's transmitters, so to speak, are not turned on or are functioning ineffectively.  In short,the university appears to be a necessary but insufficient condition for regional technological and economic development.  To borrow a phrase from the work of my CMU colleague, Wesley Cohen and Daniel Levinthal (1990) what appears to matter here--and what is to often neglected in policy circles--is what we might call  "regional absorptive capacity,” the ability of a region to absorb the science, innovation, and technologies which universities generate.  Another way of saying this is that regions need to capture the "spillovers" of the technologies and innovations they generate.

I'll start by saying that there is a lot in Florida's paper that resonates with my own research into the matter. Also, the above quoted passage can adequately explain why tech transfer did not flower in Pittsburgh. I've learned that the flowering of tech transfer is rather beside the point. What happens at the university along the NASA scale from Levels 4-7 is, indeed, driving regional economic development.