The New Geography of Jobs, written by UC Berkeley economics professor Enrico Moretti, was released last spring. It was not widely reviewed, which is too bad because I think it's a very important book.
The thesis is innovative companies and workers create economic gains and prosperity, but most of these gains accrue to the areas they occur - mostly cities. This means geography determines economic vitality.
It also means cities with highly educated workforces and innovative companies (think San Francisco, Austin, Boston, New York, etc.) are thriving, while cities without these attributes are falling behind.
This thesis is similar to Richard Florida's views, which are covered in his 2008 bestseller Who's Your City.
What I find so interesting and important is Moretti's finding that innovative high wage jobs create opportunities for others.
HIs work shows that for every new high wage job created in an area’s exporting industries, five additional new jobs are created in that metro area - three of which are for workers who have not attended college.
This multiplier effect happens because these high wage earners spend their money on local goods and services - things like restaurants, movies, nannies and others providing personal services.
This local form of neomercantilist means innovative companies that export goods and services out of the local area drive employment opportunities for less-educated workers. This makes a lot of sense and also fits with our research on the rise of personal services.
This book also nicely explains at least part of the "paradox of place".
This paradox is the Internet and connective technologies have resulted in place and location being both more and less important. This book shows why so many companies (and people) are choosing to locate in high cost locations like San Francisco.
We'll have more on this book in the future. There's too much good material to cover in a review.
You can also read a book excerpt in Salon Magazine, and Brookings has a pretty good review.
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