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No Innovation Without Migration: Breaking Convention

How do large dense cities foment innovation? The conventional wisdom on the subject is speculative at best.
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Alamo Square, San Francisco, California. (Photo: Nithon/Shutterstock)

Alamo Square, San Francisco, California. (Photo: Nithon/Shutterstock)

Concerning innovation geography, what does "breaking convention" mean? Conventional theory has large dense cities associated with creativity. Large dense cities do support a significant concentration of innovation. But how do large dense cities foment innovation? Short answer, we don't know. Conventional wisdom on the matter is, to date, speculative. My guess is as good as yours or Alfred Marshall's or Michael Porter's. This black box of economic development (or urban planning) remains open to anyone with a compelling idea explaining the positive correlation between innovation and large dense cities. I could fall down and the letters tumbling out of my mouth would constitute breaking convention.

We lack empirical evidence of the conventional theory about innovation geography. On such grounds, I cited Vivek Wadhwa's slam of Michael Porter's cluster theory as "modern-day snake oil." Wadhwa can get away with that because we don't know how large dense cities foment innovation. Michael Porter doesn't know. I don't know.

The field of inquiry into the mechanics of innovation geography is wide open. There is no discernible rationale behind zoning for innovation districts. Anyone telling a community that she or he can engineer innovation is selling "modern-day snake oil." Thus, what I would call remarkable words from Brookings' Mark Muro:

What did Tambe and Hitt find? Job-hopping contributes hugely to the bottom line, generating up to one-third of the productivity gains that result from firms’ own IT investments.

The upshot: IT labor flows appear to be the driving mechanism behind positive regional IT spillovers. Job-switching is not a side issue but an incredibly important channel by which new technology know-how and practices are sluiced around a regional economy.

In fact, the possibility of job switching and the high degrees of job-hopping in dense high-tech regions represents one of the prime attractions in a dense technology ecosystem.

You can find the Tambe and Hitt findings here. I'll get into the actual empirical research in my next post. Notice how Muro links regional density with migration. The migration is within the region, within the labor market. It's still migration. Tech firms do not benefit from proximity (i.e. density) without migration (i.e. job hopping). There is no innovation without migration. Dense urban networks are no substitute.