Research on Schumpeterian entrepreneurship identifies new high-growth startup companies as key factors in technological innovation and economic growth. While economists have tended to focus on high-growth, high-tech startup firms as the unit of analysis, economic geographers and urbanists have examined the geographic dimensions of entrepreneurship, particularly the rise of entrepreneurial clusters and eco systems. We focus here on a particular type of Schumpeterian entrepreneurship associated with high-tech startup companies, or what we refer to as âtech-startup entrepreneurship.â We contend that the organization of such Schumpeterian entrepreneurship occurs at two spatial scales. At the macro-geographic level, it is highly clustered and concentrated in a relatively small number of global cities or metro areas. At the micro-geographic level, it is highly concentrated in distinct districts or micro-clusters within these leading cities and metro areas. To examine the geographic dimensions of tech-startup entrepreneurship across these spatial scales, we use previously unused data on venture capital-financed startups at the metropolitan and district levels. Our findings support the hypothesis that tech-startup entrepreneurship is organized across two distinct but related spatial scales, which act on entrepreneurial activity through different mechanisms. These findings suggest that local diversity and local specialization can simultaneously potentiate innovation, and that a multi-scalar approach to the geography of entrepreneurship is prudent.
With the publication of The Rise of the Creative Class by Richard Florida in 2002, the ‘creative city’ became the new hot topic among urban policymakers, planners and economists. Florida has developed one of three path-breaking theories about the relationship between creative individuals and urban environments. The economist Åke E. Andersson and the psychologist Dean Simonton are the other members of this ‘creative troika’. In the Handbook of Creative Cities, Florida, Andersson and Simonton appear in the same volume for the first time. The expert contributors in this timely Handbook extend their insights with a varied set of theoretical and empirical tools. The diversity of the contributions reflect the multidisciplinary nature of creative city theorizing, which encompasses urban economics, economic geography, social psychology, urban sociology, and urban planning. The stated policy implications are equally diverse, ranging from libertarian to social democratic visions of our shared creative and urban future.
This paper examines the effects of human capital on the growth and survival of a large sample of Swedish businesses. Human capital is represented by conventional measures of the educational attainment and experience of an establishment’s workers and skills-based measures of the types of occupations present in the company. Controlling for an establishment’s size and age, as well as its industry and region of location, we find that the human capital embodied in a company’s workers affects its performance. The specific effects, however, depend on how human capital is measured and whether the analysis focuses on growth or survival.
Rural-urban migration theory suggests that one gains economically by moving from a rural to an urban area. The popular juxtaposing notion is: "If you stay, you lose." But given the rapid increase in housing costs in bigger cities, are losses from staying in rural areas still necessarily the rule? If so, how big is the economic loss for those who stay in rural regions? Using Swedish micro data, we focus on the income effects of rural-urban migration among young individuals. We find that staying in a rural region is negatively related to an individual's income levels, but the loss is mostly insignificant. After controlling for housing costs, it is even beneficial for many people to stay in their rural areas, except for the most highly educated individuals who can benefit by moving to an urban area.
Two major challenges in Europe’s rural areas are an aging population and the diminishing share of human capital. While this pattern has been occurring for a long time, the effects are becoming acutely visible and impactful. The long-term loss of younger individuals has in many ways “drained” the labor market and the economic market power of rural areas. This is the context of our research: the locational choice of university graduates from an urban–rural perspective. Using micro data covering the entire Swedish population, we identify all university graduates from the year 2001. We analyze them with respect to whether they live in a rural or urban region before starting university and where they live after graduation at two points in time: 5 and 10 years. We use a series of multinomial logit regressions to determine what factors affect their short-term and long-term choices of location. We find that having children is one of the most influential factors for moving back home after graduation, irrespective of type of region. We find only minor differences between the two time perspectives.
To date, research into urban economics, regional science and economic geography has predominantly focused on the firm and industry as the key units of analysis in order to understand economic development; however, the past few decades have seen a growing interest in the role played by talent in the knowledge economy. This book provides an essential overview of the skills revolution. It presents key milestones of the changes in economic development in the past few decades and explains the motivation behind the rise of talent, as well as its importance for cities and economies. It also offers advice on how to attract and manage talent – a major determinant of competitiveness for countries and regions around the world. In closing, the book explains the underlying theories and provides practical examples for students, researchers and practitioners alike.
Urban 'third places' foster informal interactions and face-to-face contact that is critical to the development of new innovations and start-up businesses. Our research utilises extensive microdata in combination with telephone interviews with over 200 start-up companies in Stockholm, Sweden. Our findings indicate that access to third places has a significant impact on the number of new high-tech start-ups (both by entrepreneur place of residence and work) in their vicinity. This suggests that third places play a demonstrable role in innovation and economic growth.
It is often conjectured that artistic, bohemian, and gay populations increase housing values in the neighborhoods and communities in which they reside. But these groups are small, and the evidence of their effect on housing prices is anecdotal and limited. We argue that artists, bohemians and gays affect housing values through two kinds of mechanisms: an aesthetic-amenity premium; and a tolerance or open culturepremium. To examine this, we introduce a combined measure of bohemian and gay populations – the Bohemian-Gay Index. We conduct statistical analyses to test the performance of this measure against other variables expected to affect housing values– income, wages, technology, and human capital. The findings indicate that the Bohemian-Gay Index has a substantial direct relation with housing values across all permutations of the model and across all region sizes. It remains positive andsignificant alongside variables for regional income, wages, technology, and human capital. The Bohemian-Gay Index also has a substantial direct correlation with other key variables, particularly income, indicating an additional indirect effect on housing values.
This paper puts cities and urban regions at the very centre of the processes of innovation and entrepreneurship. It combines the insights of Jane Jacobs and recent urban research on the role of the city with the literature on innovation and entrepreneurship going back to Joseph Schumpeter. Innovation and entrepreneurship and their geography privileges the firm, industry clusters and/or the individual and poses the city as a container for them. By marrying Jacobs’ insights on cities to those of Schumpeter on innovation, it is argued that innovation and entrepreneurship do not simply take in place in cities but in fact require them.
This chapter lays out the connection between urbanism and entrepreneurship. For decades, it was thought that startup activity tended to cluster in suburban office parks or “nerdistans” like those of California’s Silicon Valley. We argue that tech startups are increasingly clustered in large global cities and metro areas and in denser urban neighborhoods or districts within those cities. In effect, the city stands as the organizing unit platform for entrepreneurial activity, bringing together the talent, knowledge, capital, and other assets required for it to occur. To advance this argument, the chapter marries the literatures on entrepreneurship going back to the seminal contributions of Joseph Schumpeter to the theories of urban clustering and dynamic cities associated with Jane Jacobs, Alfred Marshall, and their disciples. It then arrays a variety of empirical evidence on the location of high-tech startup activity to make this case, including data on the concentration of venture capital investment in high-tech startups in large global cities and in dense urban neighborhoods within those large cities. It also discusses the rise of a new segment of high-technology industry, urban tech, which spans new sectors like ride hailing, co-living, co-working, real estate technology, construction technology, and smart city technology, which has made the city not just the platform for but the object of entrepreneurial startup activity.
Our research examines the role of innovation and skill on the level economic segregation across U.S. metro areas. On the one hand, economic and urban theory suggest that more innovative and skilled metros are likely to have higher levels of economic segregation. But on the other hand, theory also suggests that more segregated metros are likely to become less innovative over time. We examine the connection between innovation and economic segregation this via OLS regressions informed by a Principal Component Analysis to distill key variables related to innovation, knowledge and skills, while controlling for other key variables notably population size. Our findings are mixed. While we find evidence of an association between the level of innovation and skill and the level of economic segregation in 2010, we find little evidence of an association between the level of innovation and skill across metros and the growth of economic segregation between 2000 and 2010.
The prevailing geographic model for high-technology industrial organization has been the “nerdistan,” a sprawling, car-oriented suburb organized around office parks. This seems to contradict a basic insight of urban theory, which associates dense urban centers with higher levels of innovation, entrepreneurship, and creativity. This article examines the geography of recent venture capital finance startups across U.S. metros and within a subset of them by neighborhood. It concludes that the model is changing. The suburban model might have been a historical aberration, and innovation, creativity, and entrepreneurship are realigning in the same urban centers that traditionally fostered them.
Americans have become increasingly sorted over the past couple of decades by income, education, and class. A large body of research has focused on the dual migrations of more affluent and skilled people and the less advantaged across the United States. Increasingly, Americans are sorting not just between cities and metro areas, but within them as well.
This study examines the geography of economic segregation in America. While most previous studies of economic segregation have generally focused on income, this report examines three dimensions of economic segregation: by income, education, and occupation. It develops individual and combined measures of income, educational, and occupational segregation, as well as an Overall Economic Segregation Index, and maps them across the more than 70,000 Census tracts that make up America’s 350-plus metros. In addition, it examines the key economic, social, and demographic factors that are associated with them.
Highlights
The role of human capital in shaping cross-national innovative and economic performance is well-understood. But human capital is an indirect measure of skill, based on educational attainment. We introduce and test a more direct measure of skill, based on work that is actually performed, measured by occupation. Empirical studies have shown that such occupational “classes” play an important role in regional economic performance, outperforming human capital in some cases. We employ a measure of occupational skill (the Creative Class) and examine its relation to cross-national innovative and economic performance. We explicitly compare this measure to conventional measures of human capital (based on educational attainment) through formal models of economic performance for 55–78 countries, using 3 measures of innovative and economic performance – innovation (patents), productivity (total factor productivity), and economic output (GDP per capita). The results confirm the hypothesis, indicating that our occupation-based Creative Class measure closely is associated with all three measures of innovative and economic performance and also that it consistently performs better than human capital in these models.
This paper examines the geographic factors that are associated with the spread of COVID-19 during the first wave in Sweden. We focus particularly on the role of place-based factors versus factors associated with the spread or diffusion of COVID-19 across places. Sweden is a useful case study to examine the interplay of these factors because it did not impose mandatory lockdowns and because there were essentially no regional differences in the pandemic policies or strategies during the first wave of COVID-19. We examine the role of place-based factors like density, age structures and different socioeconomic factors on the geographic variation of COVID-19 cases and on deaths, across both municipalities and neighborhoods. Our findings show that factors associated with diffusion matter more than place-based factors in the geographic incidence of COVID-19 in Sweden. The most significant factor of all is proximity to places with higher levels of infections. COVID-19 is also higher in places that were hit earliest in the outbreak. Of place-based factors, the geographic variation in COVID-19 is most significantly related to the presence of high-risk nursing homes, and only modestly associated with factors like density, population size, income and other socioeconomic characteristics of places.
This study examines the geography of economic segregation in America. Most studies of economic segregation focus on income, but our research develops a new measure of overall economic segregation spanning income, educational, and occupational segregation which we use to examine the economic, social and demographic factors which are associated with economic segregation across US metros. Adding in the two other dimensions of educational and occupational segregation– seems to provide additional, stronger findings with regard to the factors that are associated with economic segregation broadly. Our findings suggest that several key factors are associated with economic segregation. Across the board, economic segregation is associated with larger, denser, more affluent, and more knowledge based metros. Economic segregation is related to race and to income inequality.
This study examines the key factors that are associated with the geography of economic segregation across US metros. It connects the sociological literature on the extent and variation of economic segregation to the urban economics literature on the factors associated with urban and regional performance. It advances the hypothesis that economic segregation will be greater in larger, denser, more knowledge-based regions as well as in light of racial factors and income inequality. It utilizes measures of Income, Educational, and Occupational Segregation along with a combined measure of Overall Economic Segregation. Our findings are in line with the hypothesis and indicate that economic segregation is associated with larger, denser, more highly educated metros. Economic segregation is also to a certain extent related with race and ethnicity, commuting style, and income inequality.
This paper examines the geographic variation in wage inequality and income inequality across US metros. The findings indicate that the two are quite different. Wage inequality is closely associated with skills, human capital, technology and metro size, in line with the literature, but these factors are only weakly associated with income inequality. Furthermore, wage inequality explains only 15% of income inequality across metros. Income inequality is more closely associated with unionization, race and poverty. No relationship is found between income inequality and average incomes and only a modest relationship between it and the percentage of high-income households.
It is often conjectured that artistic, bohemian and gay populations increase housing values in the neighborhoods and communities in which they reside. But these groups are small, and the evidence of their effect on housing prices is anecdotal and limited. We argue that artists, bohemians and gays affect housing values through two kinds of mechanisms: an aesthetic-amenity premium; and a tolerance or open culture premium. To examine this, we introduce a combined measure of bohemian and gay populations—the Bohemian-Gay Index. We conduct statistical analyses to test the performance of this measure against other variables expected to affect housing values—income, wages, technology and human capital. The findings indicate that the Bohemian-Gay Index has a substantial direct relation with housing values across all permutations of the model and across all region sizes. It remains positive and significant alongside variables for regional income, wages, technology and human capital. The Bohemian-Gay Index also has a substantial direct correlation with other key variables, particularly income, indicating an additional indirect effect on housing values.
This research provides new data and insight onmetropolitan areas worldwide. It summarizes new data, derived from satellite images of the world at night, to provide systematic estimates of the economic activity generated by cities and metropolitan areas worldwide. It identifies 681 global metropolitan areas each with more than 500,000 people. Taken as a whole, these large global metropolitan regions house 24 percent of the world's population but produce 60 percent of global output, measured as light emissions. Asia leads the way in global economic urbanization according to our findings, followed by North America, the emerging economies, and Europe.
Our research examines the role of airports in regional development. Specifically, we examine two things: (1) the factors associated with whether or not a metro will have an airport, and (2) the effect of airport activities on regional economic development. Based on multiple regression analysis for U.S. metros, our research generates four key findings. First, airports are more likely to be located in larger metros with higher shares of cultural workers and warmer winters. Second, airports add significantly to regional development measured as economic output per capita. Third, the effect of airports on regional development occurs through two channels—their capacity to move both people and cargo, with the former being somewhat more important. Fourth, the impact of airports on regional development varies with their size and scale.
The decline in fertility across advanced nations is a well-known fact. Becker famously argued that declining rates of childbirth were the by-product of higher levels of economic development and human capital. Recently, it has been suggested that two additional factors might lead to declining rates of childbirth—the higher housing costs of expensive cities and the change in the nature of work and employment from more regular and secure full-time work to less secure arrangements, like self-employment. Our research examines the effect of these two classes of factors—housing costs and self-employment—on fertility, in regard to both the rate of childbirth and the delay in the age at which people have children. We use detailed panel data covering all Swedish individuals in their prime childbearing years (20–45) for the 10-year period 2007–2016. Our findings indicate that the likelihood of having a child is affected negatively by increased housing costs and positively by self-employment. Both result in a delay in the parental age at which children are born. Of the two, self-employment has a relatively large effect.
Power couples, defined as pairs of highly educated partners, tend to cluster in cities to take advantage of more developed labor markets, better jobs, and higher wages. This research examines to what extent being a partner in a power couple brings additional wage income benefits. We examine what the effects of power couple partnering is on wage income. Furthermore, we examine how the results are affected by gender and place of residence. To determine this, the research uses detailed Swedish micro data on power couples 23-39 years of age over the period 2007-2016. Our analysis finds positive and significant results from being in a power couple on wage income after controlling for individual, workplace, and geographical characteristics. This is the case for both men and women in power couple households without children, but for women only when children are present. For power couples in denser urban areas, we find a positive effect for men in power couples with or without children. We suggest this effect is due to a more equal "balance of power" between partners in highly educated power couples located in bigger cities, where norms and values may favor a relatively greater sharing of household duties between men and women, and where men face a different competitive situation in the labor market.
This report presents the 2015 edition of the Global Creativity Index, or GCI. The GCI is a broad-based measure for advanced economic growth and sustainable prosperity based on the 3Ts of economic development—talent, technology, and tolerance. It rates and ranks 139 nations worldwide on each of these dimensions and on our overall measure of creativity and prosperity.
China is currently seeking to transform its economic structure from a traditional industrial to a more innovative, human-capital driven, and knowledge-based economy. Our research examines the effects of three key factors on Chinese regional development in an attempt to gauge to what degree China has transformed from an industrial to a knowledge-based economy, based on higher levels of (1) technology and innovation, (2) human capital and knowledge/professional/creative occupations, and (3) factors like tolerance, universities, and amenities which act on the flow of the first two. We employ structural equation models to gauge the effects of these factors on the economic performance of Chinese regions. Our research generates four key findings. First, the distribution of talent (measured both as human capital and as knowledge – professional and creative occupations) is considerably more concentrated than in the US or other advanced economies. Second, universities are the key factor in shaping the distribution both of talent and of technological innovation. Third, tolerance also plays a role in shaping the distribution of talent and technology across Chinese regions. Fourth, and perhaps most strikingly, we find that neither talent nor technology is associated with the economic performance of Chinese regions. This stands in sharp contrast to the pattern in advanced economies and suggests that the Chinese economic model, at least at the time of data collection, appears to be far less driven by the human capital or technology factors that propel more advanced economies. This, in turn, suggests that China is likely to face substantial obstacles in moving from its current industrial stage of development to a more knowledge-based economy.
This research examines the factors that shape the happiness of cities, whereas much of the existent literature has focused on the happiness of nations. It is argued that in addition to income, which has been found to shape national-level happiness, human capital levels will play an important role in the happiness of cities. Metropolitan-level data from the 2009 Gallup–Healthways Survey are used to examine the effects of human capital on city happiness, controlling for other factors. The findings suggest that human capital plays the central role in the happiness of cities, outperforming income and every other variable.
Research on talent or human capital generally focuses on the metro level and neglects the relative effects of its distribution between center cities and their surrounding suburbs. This research examines the connection between human capital in urban centers (defined here as principal cities) versus suburbs on the economic performance of US metropolitan areas. The findings indicate that this distribution of human capital has significant connection to metro economic performance, with suburban human capital being more strongly related to performance than human capital in the principal city. This result also varies by metro size.
This article examines the factors that shape economic development in Canadian regions. It employs path analysis and structural equation models to isolate the effects of technology, human capital and/or the creative class, universities, the diversity of service industries and openness to immigrants, minorities and gay and lesbian populations on regional income. It also examines the effects of several broad occupations groups—business and finance, management, science, arts and culture, education and health care—on regional income. The findings indicate that both human capital and the creative class have a direct effect on regional income. Openness and tolerance also have a significant effect on regional development in Canada. Openness towards the gay and lesbian population has a direct effect on both human capital and the creative class, while tolerance towards immigrants and visible minorities is directly associated with higher regional incomes. The university has a relatively weak effect on regional incomes and on technology as well. Management, business and finance and science occupations have a sizeable effect on regional income; arts and culture occupations have a significant effect on technology; health and education occupations have no effect on regional income.
This research examines the effect of skills in cities on regional wages. We use cluster analysis to identify three broad skill types—analytical, social intelligence and physical skills from 87 occupational skills. We examine how each skill contributes to regional wages and how they are related to regional size, using data from 1999 and 2008. We find that analytical and social intelligence skills have a significant positive effect on regional wages, while physical skills have a negative effect. Analytical skills are also somewhat more closely associated with regional wages than social intelligence skills, after controlling for education, industry, immigration and regional size. Furthermore, wage return to analytical and social intelligence skills has increased over time, and the return to physical skills has declined significantly. We also show that larger cities reward analytical and social intelligence skills to a higher degree, whereas smaller cities rely more on physical skills.
The economic crisis contributed to sharp increases in US unemployment rates for all three of the major socio-economic classes. Results from regression models using individual-level data from the 2006–2011 US Current Population Surveys indicate that members of the Creative Class had a lower probability of being unemployed over this period than individuals in the Service and Working Classes and that the impact of having a creative occupation became more beneficial in the 2 years following the recession. These patterns, if they continue, are suggestive of a structural change occurring in the US economy—one that favours knowledge-based creative activities.
Urbanization has led to the centralization of many important functions, including the media sector. In the case of Sweden, 53% of journalists now live in the capital region of Stockholm. The number of local editorial offices has shrunk from 668 to 273 in 28 years. What impact does this media centralization have? A recent report from the U.S. by the PEW Institute shows that rural communities experience a sense of being disconnected from what is being reported by the media. In this paper, we hypothesize that the lack of a local editorial office can lead to a lower consumption of local news (either in print form or online). Similarly, we also test if local news consumption decreases due to having fewer local journalists. Based on fine level data for Sweden in 2006 and in 2013, the results of our analysis suggest that the existence of an editorial office in a municipality is not significantly related to the consumption of local newspapers, but that accessibility to employed journalists who live in the municipality is.
Urbanization and new digital technologies have significantly altered the news media industry. One major change is the disappearance of local editorial offices in many regions. This paper examines if there is a relation between access to local media in terms of editorial offices and journalists, and the likelihood of the public consuming local news. The study builds on fine level data for Sweden in 2006 and in 2013, allowing for a comparison of trends. Our results suggest that the existence of an editorial office in the municipality is not significantly related to the consumption of local newspapers but that accessibility to employed journalists who live in the municipality is.
Utvärderingen undersöker stödmottagarnas egna uppfattningar om hur investeringsstöden påverkar företagens företagsutveckling, innovationsförmåga och konkurrenskraft. I den här rapporten söker man således fånga de effekter av investeringsstöd som inte kan följas genom indikatorer och ansökningsinformation.
We investigate whether an individual's information milieu-an individual's residential neighborhood and co-workers-affects the decision to get a COVID-19 vaccine. The decision to accept or refuse a vaccine is intensely personal and involves the processing of information about phenomena likely to be unfamiliar to most individuals. One can thus expect an interplay between an individual's level of education and skills and the information processing of others whom with whom she can interact and whose decision she can probe and observe. Using individual-level data for adults in Sweden, we can identify the proportion of an individual's neighborhood and workplace who are unvaccinated as indicators of possible peer effects. We find that individuals with low levels of educational attainment and occupational skills are more likely to be unvaccinated when exposed to other unvaccinated individuals at work and in the residential neighborhood. The peer effects in each of these information milieus further increases the likelihood of not getting vaccinated-with the two acting as information channels that reinforce one another.