The driving force in the world economy today is not the nation-state, argues “Creative Class” guru Richard Florida, but a new economic unit — something he calls the “mega-region.” The idea that nation-states are receding in relative importance is not a new one. When I was working at Virginia Business magazine some 12 to 15 years ago, we published a cover story on the “Rise of the City State,” based on the thinking of regional leadership consultant Jim Crupi. And no one can read the Bacon’s Rebellion blog for long without encountering Ed Risse’s concept of the “New Urban Region.”
But Florida is suggesting that something else is going on. In a April 12, 2008, piece in the Wall Street Journal, Florida notes that a mere 40 mega-regions around the world account for one-fifth of the world’s population, two-thirds of global economic output and more than 85 percent of all global innovation. By his reckoning, the world’s greatest mega-region is Greater Tokyo, with 55 million people and $2.5 trillion in economic activity, while No. 2 is the 500-mile Boston-Washington corridor, with some 54 million people and $2.2 trillion in output.
Based on the insight that mega-regions are the economic engines of the global economy, Florida suggests that the thrust of public policy should be to make them stronger and more competitive. Stay committed to global trade. Promote more urban densities, not sprawl. Modernize infrastructure. And stop transferring wealth from productive regions to lagging, unproductive ones.
These are all ideas that I’m comfortable with. But I do wonder whether the concept of a “mega-region” is really a meaningful one. Florida did not have the space to elaborate upon his thinking in a short op-ed piece. Hopefully, he has done so in his new book, “Who’s Your City?”, which I have not yet read. So, I remain open to being persuaded, but at this point I have to say that the usefulness of the concept in guiding thinking about economic development is less than self-evident.
The problem of defining the units of economic development is no mere academic issue. If we regard our community as part of a “city state” synonymous with a metropolitan region or a New Urban Region — the Washington region, the Hampton Roads region, the Richmond region, etc. — we will bend our efforts to creating institutions and linkages that match. If we regard our community as part of a “mega-region” stretching 500 miles across multiple states, we will organize our efforts quite differently.
I find it difficult to see how the defining the urban agglomeration stretching from Boston to Northern Virginia as a “mega-region” reflects any political, economic or sociological reality. The Boston-Washington agglomeration has no self identity as a region. It spans some 10 to 12 states (depending on how you define the region) and too many municipalities to count. The mega-region encompasses numerous distinct labor markets. Florida may present evidence to the contrary in his book, but I don’t see the area as being tied together by any special business or economic linkages. To the contrary, to pick one example, the IT-centric economy of Northern Virginia has more corporate and business linkages with Silicon Valley in California than it does to, say, Philadelphia, New York City or even a technology center like Boston.
Using Florida’s own theory of the “creative class” as a basis for thinking about the issue, I would suggest that the fundamental unit of regional economic development is the “labor pool” — a geographic entity within which the vast majority of people who live there also work there. The outer edges of such a region coincide with the “commuter shed” — beyond which people tend to commute to work in a different region. (This is a larger unit than the Metropolitan Statistical Areas catalogued by the U.S. Census. I believe it is how Ed Risse defines a New Urban Region, but I would welcome any clarification from him on that point.)
Looking at a region as a “labor pool” rather than a collection of municipalities puts the emphasis where it rightly belongs in a knowledge-based economy: on the workforce. The most powerful driver of economic prosperity today is the depth and breadth of human capital, and the great economic-development challenge of the age is creating the kinds of communities where the most economically, artistically and scientifically productive members of the workforce (the “creative class”) are drawn to live and work by the regional quality of life.
No one personally identifies with the “Boston-Washington” mega-region. No one moves to, say, the Northern Virginia portion of the mega-region on the logic, “Oh, yeah, I moved here for the great quality of life. We’ve got these really great educational institutions — like Harvard and Yale. And, man, the nightlife — you can’t beat those shows on Broadway!” No… people in Northern Virginia identify with George Mason University and Wolf Trap performing arts center, or maybe Georgetown University and the Kennedy Center.
Florida is right to say that wealth creation around the world is highly concentrated in a few very large, super-productive regions. But what appears to be a “mega-region” may really be a cluster of “city states” or “New Urban Regions” in such close proximity that they overlap with one another. The driving unit, with which people identify and mobilize their efforts, occur at the level of the city state, not the mega-region.
(Hat tip: Larry Gross.)
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