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	<title>Comments on: Replay: Mega-Skepticism</title>
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	<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/</link>
	<description>Passionate About Cities</description>
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		<title>By: The Urbanophile</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5945</link>
		<dc:creator>The Urbanophile</dc:creator>
		<pubDate>Mon, 23 Nov 2009 20:43:21 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5945</guid>
		<description>Thanks for the great comments. Sorry I wasn&#039;t able to engage much previously, but I was out of town.

Wad, stay tuned, I&#039;m going to talk more about some of this in my future article. I&#039;d agree that mega-regions as such currently don&#039;t have much relevance in the USA right now.</description>
		<content:encoded><![CDATA[<p>Thanks for the great comments. Sorry I wasn&#8217;t able to engage much previously, but I was out of town.</p>
<p>Wad, stay tuned, I&#8217;m going to talk more about some of this in my future article. I&#8217;d agree that mega-regions as such currently don&#8217;t have much relevance in the USA right now.</p>
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		<title>By: Wad</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5886</link>
		<dc:creator>Wad</dc:creator>
		<pubDate>Thu, 19 Nov 2009 07:41:32 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5886</guid>
		<description>Rod Stevens wrote:

&lt;i&gt;I’ve had the same reaction to Florida’s “mega region” that you have: what’s holding these areas together besides sprawl?&lt;/i&gt;

Dynamic economic transactions that affect every class from executives to the lumpen.

Let us overeducated types reading this understand that there are many people out there who make choices not by lifestyle, but by necessity.

Where do you go if you have limited job skills? In a place that needs plenty of people to hire. Where do you go if you&#039;re an immigrant? Very likely, to neighborhoods of people of a common nationality or language. Why do people of the least means paradoxically go to the most expensive cities? Because they likely won&#039;t die of starvation.

Of course, there are some areas that will try to build an economic region around lifestyle choices. Florida -- the state, not the author -- has been organized around large &quot;theme&quot; communities geared to affluent retirees or northern snowbirds. Yet apart from a large population and the need for a servant class in these areas, Florida still has only one dynamic metropolitan region in Miami-Dade, Broward and Palm Beach counties.

You&#039;d immediately associate the Miami region with sprawl, but unlike the rest of Florida, Miami had the economic demand to support sprawl. In the process, it helped to raise the profile of Broward County, which is located between Miami and Palm Beach. Had the area not been a continuous blob, the areas north of Miami would have been much smaller and economically weaker.

That&#039;s tiny in comparison to what happened in coastal California. Sprawl &quot;helped&quot; link together much of Northern California, where the Bay Area now encompasses the Wine Country, the Sacramento Valley, the northern San Joaquin Valley and Santa Cruz.

Southern California is effectively everything from Santa Barbara to the Mexican border, save for Imperial County and the eastern desert communities.

These were all formerly small independent cities that now share a common economic fortune. Each area can maintain a local &quot;character&quot; but not a local function.

The economic output of the larger cities helped to maintain this character that would have otherwised stagnated. It&#039;s much worse for really local cities that are near the edges of the mega-regions yet still isolated from them.

Mendocino County, the northern Sierras and Merced are on the edges of the Northern California mega-region. All are relatively poor regions yet still stare at the metaphorical wall of the mega-region.

A place like Barstow has a relatively large population for what is one of the most economically backward cities in Southern California. Almost all of the economic activity is because of a nearby Army base and being the junction of two national interstates. The workers are too far to drive to more lucrative economic opportunities, and are essentially trapped in a service station economy.</description>
		<content:encoded><![CDATA[<p>Rod Stevens wrote:</p>
<p><i>I’ve had the same reaction to Florida’s “mega region” that you have: what’s holding these areas together besides sprawl?</i></p>
<p>Dynamic economic transactions that affect every class from executives to the lumpen.</p>
<p>Let us overeducated types reading this understand that there are many people out there who make choices not by lifestyle, but by necessity.</p>
<p>Where do you go if you have limited job skills? In a place that needs plenty of people to hire. Where do you go if you&#8217;re an immigrant? Very likely, to neighborhoods of people of a common nationality or language. Why do people of the least means paradoxically go to the most expensive cities? Because they likely won&#8217;t die of starvation.</p>
<p>Of course, there are some areas that will try to build an economic region around lifestyle choices. Florida &#8212; the state, not the author &#8212; has been organized around large &#8220;theme&#8221; communities geared to affluent retirees or northern snowbirds. Yet apart from a large population and the need for a servant class in these areas, Florida still has only one dynamic metropolitan region in Miami-Dade, Broward and Palm Beach counties.</p>
<p>You&#8217;d immediately associate the Miami region with sprawl, but unlike the rest of Florida, Miami had the economic demand to support sprawl. In the process, it helped to raise the profile of Broward County, which is located between Miami and Palm Beach. Had the area not been a continuous blob, the areas north of Miami would have been much smaller and economically weaker.</p>
<p>That&#8217;s tiny in comparison to what happened in coastal California. Sprawl &#8220;helped&#8221; link together much of Northern California, where the Bay Area now encompasses the Wine Country, the Sacramento Valley, the northern San Joaquin Valley and Santa Cruz.</p>
<p>Southern California is effectively everything from Santa Barbara to the Mexican border, save for Imperial County and the eastern desert communities.</p>
<p>These were all formerly small independent cities that now share a common economic fortune. Each area can maintain a local &#8220;character&#8221; but not a local function.</p>
<p>The economic output of the larger cities helped to maintain this character that would have otherwised stagnated. It&#8217;s much worse for really local cities that are near the edges of the mega-regions yet still isolated from them.</p>
<p>Mendocino County, the northern Sierras and Merced are on the edges of the Northern California mega-region. All are relatively poor regions yet still stare at the metaphorical wall of the mega-region.</p>
<p>A place like Barstow has a relatively large population for what is one of the most economically backward cities in Southern California. Almost all of the economic activity is because of a nearby Army base and being the junction of two national interstates. The workers are too far to drive to more lucrative economic opportunities, and are essentially trapped in a service station economy.</p>
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		<title>By: Wad</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5884</link>
		<dc:creator>Wad</dc:creator>
		<pubDate>Thu, 19 Nov 2009 06:25:53 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5884</guid>
		<description>You&#039;re right, Alon, about the TVA example.

The TVA region was what Jacobs had described as an economically passive region. It wasn&#039;t moving anywhere in the first place, so it didn&#039;t really decline in the way that Birmingham, Alabama -- once called the Pittsburgh of the South -- had retracted.

Jacobs stressed five factors that a city region had to balance in order to thrive. Unbalanced regions, such as Appalachia, are dependent on single-purpose economics.

I stress &quot;would&quot; in my response, not &quot;will&quot;. Cities within 500 miles of Chicago, the likely center of Midwest high-speed rail, stand more to gain as junior partners in a rail-bound mega-region than envious upstart competitors.

The rest is up to the cities to respond to the opportunities. Conservative-leaning cities could always resist the plans, believing it is in their interest to play the role of value position. Cities whose glory days were in the industrial era are likely to have working classes who are hostile to high-value industries that provide higher-paying but few jobs. In other words, they fear gentrification. Some regions may have a toxic political and racial climate. Some cities have fallen into decline so deeply that their civic assets cannot be reactivated.

It all depends on the people and their representatives.</description>
		<content:encoded><![CDATA[<p>You&#8217;re right, Alon, about the TVA example.</p>
<p>The TVA region was what Jacobs had described as an economically passive region. It wasn&#8217;t moving anywhere in the first place, so it didn&#8217;t really decline in the way that Birmingham, Alabama &#8212; once called the Pittsburgh of the South &#8212; had retracted.</p>
<p>Jacobs stressed five factors that a city region had to balance in order to thrive. Unbalanced regions, such as Appalachia, are dependent on single-purpose economics.</p>
<p>I stress &#8220;would&#8221; in my response, not &#8220;will&#8221;. Cities within 500 miles of Chicago, the likely center of Midwest high-speed rail, stand more to gain as junior partners in a rail-bound mega-region than envious upstart competitors.</p>
<p>The rest is up to the cities to respond to the opportunities. Conservative-leaning cities could always resist the plans, believing it is in their interest to play the role of value position. Cities whose glory days were in the industrial era are likely to have working classes who are hostile to high-value industries that provide higher-paying but few jobs. In other words, they fear gentrification. Some regions may have a toxic political and racial climate. Some cities have fallen into decline so deeply that their civic assets cannot be reactivated.</p>
<p>It all depends on the people and their representatives.</p>
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		<title>By: Alon Levy</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5882</link>
		<dc:creator>Alon Levy</dc:creator>
		<pubDate>Thu, 19 Nov 2009 05:21:27 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5882</guid>
		<description>Wad, Jacobs also explained why infrastructure investments can&#039;t save cities from decline. Her example is the Tennessee Valley Authority, which failed to lift Southern Appalachia from joblessness; forty years later, a new coal plant had 40,000 people applying for 1,400 jobs, and today, the region&#039;s GDP per capita as a percentage of the national average is as low as ever.

Aaron, one of the problems with talking of megaregions as substitutes for nations is that outside the US, China, and Japan, megaregions as Florida thinks about them don&#039;t exist. And even in Japan, the actual megaregion - the Taiheiyo Belt, extending from Tokyo to Fukuoka - is different from what Florida believes are the megaregions. In Europe they have the Rhine-Ruhr area and Randstad, which are very tightly bound megaregions, even more so than the Northeastern US, but other cities come in their own metro areas. London and Paris have no megaregions; they are as separate from their national hinterlands as San Francisco is from the Interior West. Frankfurt and Munich have no megaregions, either, and still they are the most successful cities in Germany, more so than the Rhine-Ruhr area.</description>
		<content:encoded><![CDATA[<p>Wad, Jacobs also explained why infrastructure investments can&#8217;t save cities from decline. Her example is the Tennessee Valley Authority, which failed to lift Southern Appalachia from joblessness; forty years later, a new coal plant had 40,000 people applying for 1,400 jobs, and today, the region&#8217;s GDP per capita as a percentage of the national average is as low as ever.</p>
<p>Aaron, one of the problems with talking of megaregions as substitutes for nations is that outside the US, China, and Japan, megaregions as Florida thinks about them don&#8217;t exist. And even in Japan, the actual megaregion &#8211; the Taiheiyo Belt, extending from Tokyo to Fukuoka &#8211; is different from what Florida believes are the megaregions. In Europe they have the Rhine-Ruhr area and Randstad, which are very tightly bound megaregions, even more so than the Northeastern US, but other cities come in their own metro areas. London and Paris have no megaregions; they are as separate from their national hinterlands as San Francisco is from the Interior West. Frankfurt and Munich have no megaregions, either, and still they are the most successful cities in Germany, more so than the Rhine-Ruhr area.</p>
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		<title>By: Rod Stevens</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5881</link>
		<dc:creator>Rod Stevens</dc:creator>
		<pubDate>Thu, 19 Nov 2009 04:55:38 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5881</guid>
		<description>I&#039;ve had the same reaction to Florida&#039;s &quot;mega region&quot; that you have:  what&#039;s holding these areas together besides sprawl?

I have to admit I am writing from a West Coast perspective, where the unifying themes, at least from Northern California on north, are lifestyle factors.  People move between the cities here because they can enjoy the same leisure pursuits and improve the quality of life.  Thus Portland and Seattle are somewhat similar, Portland offering somewhat better access to the outdoors, while Seattle has better job opportunities and a more outgoing style.  The tradeoffs are essentially personality differences, while the values are somewhat the same.  The same difference between California and the Northwest, the rain being a differentiator here, along with career opportunities, but leisure pursuits still being a driver.  Oddly, those leisure pursuits drive entrepreneurial outlooks, and so the talent flows back and forth within the larger mega region&quot;.

Beyond these kind of lifestyle reasons, though, I don&#039;t see what holds the mega regions together except for family ties and old industry ties.  Chicago and Minneapolis/ St. Paul were long the packaged goods centers of the country, with Quaker Oats and other companies like that there because of the old grain basket.  Now those companies are largely spread to the winds.  So I would rather come back to a more local outlook.  I&#039;m just not sure what the mega region concept does for anyone.  I would prefer to think about my own place and city and how to make it strong.  As you write, I don&#039;t see too many opportunities to cooperate between cities when those travel times are more than an hour.  Perhaps high speed rail could offer that, but for the time being, count me a profound &quot;localist&quot;.</description>
		<content:encoded><![CDATA[<p>I&#8217;ve had the same reaction to Florida&#8217;s &#8220;mega region&#8221; that you have:  what&#8217;s holding these areas together besides sprawl?</p>
<p>I have to admit I am writing from a West Coast perspective, where the unifying themes, at least from Northern California on north, are lifestyle factors.  People move between the cities here because they can enjoy the same leisure pursuits and improve the quality of life.  Thus Portland and Seattle are somewhat similar, Portland offering somewhat better access to the outdoors, while Seattle has better job opportunities and a more outgoing style.  The tradeoffs are essentially personality differences, while the values are somewhat the same.  The same difference between California and the Northwest, the rain being a differentiator here, along with career opportunities, but leisure pursuits still being a driver.  Oddly, those leisure pursuits drive entrepreneurial outlooks, and so the talent flows back and forth within the larger mega region&#8221;.</p>
<p>Beyond these kind of lifestyle reasons, though, I don&#8217;t see what holds the mega regions together except for family ties and old industry ties.  Chicago and Minneapolis/ St. Paul were long the packaged goods centers of the country, with Quaker Oats and other companies like that there because of the old grain basket.  Now those companies are largely spread to the winds.  So I would rather come back to a more local outlook.  I&#8217;m just not sure what the mega region concept does for anyone.  I would prefer to think about my own place and city and how to make it strong.  As you write, I don&#8217;t see too many opportunities to cooperate between cities when those travel times are more than an hour.  Perhaps high speed rail could offer that, but for the time being, count me a profound &#8220;localist&#8221;.</p>
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		<title>By: Wad</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5877</link>
		<dc:creator>Wad</dc:creator>
		<pubDate>Wed, 18 Nov 2009 22:05:35 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5877</guid>
		<description>I wrote:

&lt;i&gt;rearranging molecules&lt;/i&gt;

Should read &quot;rearranging electrons&quot;.</description>
		<content:encoded><![CDATA[<p>I wrote:</p>
<p><i>rearranging molecules</i></p>
<p>Should read &#8220;rearranging electrons&#8221;.</p>
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		<title>By: Wad</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5876</link>
		<dc:creator>Wad</dc:creator>
		<pubDate>Wed, 18 Nov 2009 22:04:45 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5876</guid>
		<description>cdc guy wrote:

&lt;i&gt;One could easily substitute “high-speed, high-capacity teleconferencing” for “high-speed rail” in the above comment.&lt;/i&gt;

You forgot one thing.

If a company could do everything by teleconferencing, it will move it to the half of the world that can eke out an existence on $2 a day.

&lt;i&gt;It seems to be my contemporaries (baby boomers) who are hung up on in-person face time. Is it truly necessary with today’s video links and collaboration software?&lt;/i&gt;

Yes, because video conferencing is a practical substitute for just a tiny sample of jobs.

The service sector will still need interpersonal interaction. Sales forces will need to communicate directly with their clients. New products or techniques will still need to be demonstrated and taught face-to-face.

The only hang-up we have is the necessity of person-to-person communication for much of the working world. Not every job is well-suited to rearranging molecules.</description>
		<content:encoded><![CDATA[<p>cdc guy wrote:</p>
<p><i>One could easily substitute “high-speed, high-capacity teleconferencing” for “high-speed rail” in the above comment.</i></p>
<p>You forgot one thing.</p>
<p>If a company could do everything by teleconferencing, it will move it to the half of the world that can eke out an existence on $2 a day.</p>
<p><i>It seems to be my contemporaries (baby boomers) who are hung up on in-person face time. Is it truly necessary with today’s video links and collaboration software?</i></p>
<p>Yes, because video conferencing is a practical substitute for just a tiny sample of jobs.</p>
<p>The service sector will still need interpersonal interaction. Sales forces will need to communicate directly with their clients. New products or techniques will still need to be demonstrated and taught face-to-face.</p>
<p>The only hang-up we have is the necessity of person-to-person communication for much of the working world. Not every job is well-suited to rearranging molecules.</p>
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		<title>By: cdc guy</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5873</link>
		<dc:creator>cdc guy</dc:creator>
		<pubDate>Wed, 18 Nov 2009 19:17:39 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5873</guid>
		<description>One could easily substitute &quot;high-speed, high-capacity teleconferencing&quot; for &quot;high-speed rail&quot; in the above  comment.  

Only it&#039;s far cheaper and more efficient to move electrons than people.  Why build an updated version of 19th-century technology when there is 21st-century technology available?

It seems to be my contemporaries (baby boomers) who are hung up on in-person face time.  Is it truly necessary with today&#039;s video links and collaboration software?</description>
		<content:encoded><![CDATA[<p>One could easily substitute &#8220;high-speed, high-capacity teleconferencing&#8221; for &#8220;high-speed rail&#8221; in the above  comment.  </p>
<p>Only it&#8217;s far cheaper and more efficient to move electrons than people.  Why build an updated version of 19th-century technology when there is 21st-century technology available?</p>
<p>It seems to be my contemporaries (baby boomers) who are hung up on in-person face time.  Is it truly necessary with today&#8217;s video links and collaboration software?</p>
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		<title>By: Wad</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5855</link>
		<dc:creator>Wad</dc:creator>
		<pubDate>Wed, 18 Nov 2009 07:57:56 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5855</guid>
		<description>Also, using the Jacobsean theories, specialization of city regions is a bad thing in the long run.

The healthiest cities are the ones constantly adding imports, adding value to them to create export industries, and growing this process by attracting new imports and new export processes.

Specialization is what led to the downfall of Detroit and Pittsburgh, particularly because they were leaders of a single industrial function (autos and steel, respectively). All the capital and intellectual energy was focused on efficiency and improved output. In macroeconomic theory, a slang term for this phenomenon is &quot;Dutch disease.&quot; A singular function crowded out the possibility of several other import-replacement cycles.

The auto and steel industries became efficient to the point of transcending location. Automakers and steel refiners could plop down a factory virtually anywhere without an appreciable loss of efficiency. Detroit needed its Big Three more than the Big Three needed Detroit. Pittsburgh needed steel more than steel needed Pittsburgh.</description>
		<content:encoded><![CDATA[<p>Also, using the Jacobsean theories, specialization of city regions is a bad thing in the long run.</p>
<p>The healthiest cities are the ones constantly adding imports, adding value to them to create export industries, and growing this process by attracting new imports and new export processes.</p>
<p>Specialization is what led to the downfall of Detroit and Pittsburgh, particularly because they were leaders of a single industrial function (autos and steel, respectively). All the capital and intellectual energy was focused on efficiency and improved output. In macroeconomic theory, a slang term for this phenomenon is &#8220;Dutch disease.&#8221; A singular function crowded out the possibility of several other import-replacement cycles.</p>
<p>The auto and steel industries became efficient to the point of transcending location. Automakers and steel refiners could plop down a factory virtually anywhere without an appreciable loss of efficiency. Detroit needed its Big Three more than the Big Three needed Detroit. Pittsburgh needed steel more than steel needed Pittsburgh.</p>
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		<title>By: Wad</title>
		<link>http://www.urbanophile.com/2009/11/17/replay-mega-skepticism/comment-page-1/#comment-5854</link>
		<dc:creator>Wad</dc:creator>
		<pubDate>Wed, 18 Nov 2009 07:43:35 +0000</pubDate>
		<guid isPermaLink="false">http://www.urbanophile.com/?p=1067#comment-5854</guid>
		<description>This suggests that it would be time for regions to rethink jurisdictional regimes. If not boundaries, then for finding the right level of administration for certain tasks.

Speaking broadly, this post also shows why a high-speed rail program is crucial to the regional economies described. It would be the 21st century equivalent of what the Interstate Highway System was for the 20th century. It would not only provide a means of getting around, but would be key factor in changing the economic landscape.

Jane Jacobs has great theories on how cities grow and their economies take shape. She outlines them in &quot;The Economy of Cities&quot; and &quot;Cities and the Wealth of Nations.&quot; In both, she said the process of economic health takes place when cities can replace imports and add value to them, in turn making an export economy. As this process grows, what happens next is a transformation of land uses. As economies expand, lower-value functions get shifted out to the cities&#039; hinterlands, and former small towns and villages become connected to the major city&#039;s economy.

(The first step was how productive technologies were introduced into agricultural areas. The second step was industrial uses being moved to the agricultural hinterlands as costs rose. A third step was suburbanization leapfrogging over industrial transformation to hinterlands around cities, or suburbs overtaking industrial areas.)

The Midwest is in a unique situation, and I notice the high-speed rail advocates seem to understand this. You have a world-beating dynamo in Chicago, a few healthy smaller city regions, and several struggling cities that have seen their best days behind them.

Fortunately, many of them are within 500 miles of Chicago.

Now imagine if these large cities all became a city region of Chicago.

It might wound the pride of smaller cities to be thought of as a &quot;suburb&quot; of the Windy City, but becoming part of a city region would help place them on better footing.

Coincidentally, 500 miles is also the optimum distance for end-to-end high-speed rail service.

It might not necessarily mean an expanded labor market, as you&#039;ve said, in terms of St. Louis or Indianapolis becoming outright suburbs of Chicago. What it would likely mean is an exchange of industrial functions, rather than explicit labor or commute sheds.

What the cities have to offer in relation to Chicago is comparative advantage. The declining cities have the advantage of &quot;decline&quot; that should translate into discounts on transaction costs.

Say you are the decision maker in a global firm headquartered in Chicago. You are entrusted to manage the growth in two key areas of your business: customer sales and market research.

These are both businesses that require the capital, labor and other tangible and intangible resources found in Chicago. You&#039;ve gotten sweetheart deals from other close and declining Midwestern cities who desperately need the tax base and the jobs, yet the deals are contingent in moving all operations to the cities. Your clients, funders and employees find this unacceptable.

So what is there to do? Split the difference.

You&#039;ve determined that the sales division is more location-dependent than the research division. While theoretically the research division can be placed anywhere, you decide to put it in a big city along the Midwestern High-Speed Rail Network. It would be costly to expand both facilties in Chicago, but other big cities have made previous investments in civic amenities that can be rejuvenated and all have an educated work force. They also have close ties to the Chicago area without having to sever them altogether.

So, in this case, you decide that the &quot;winning&quot; city in the research competition is St. Louis.

It&#039;s a winner for all parties. Your company has saved on expansion costs, Chicago still keeps a high-value task, and St. Louis has new business that it hasn&#039;t seen before.

With a high-speed rail network in place, Chicago will see it shedding job functions to the &quot;hinterlands&quot; of cities like Milwaukee, St. Louis and Indianapolis.

Chicago, though, can afford this. There&#039;s already an abundance of monetary and social capital that it is bound to fill that void quickly with new upstart businesses or other growing businesses ready to make the leap to the major leagues.

Second-tier cities, though, may lose functions but never regain anything in their place. Factory towns, particularly, seek to rejuvenate themselves with factories to keep their work forces busy. It has proven to be a losing strategy.

Becoming a big-city hinterland may be a step up for all the cities concerned.</description>
		<content:encoded><![CDATA[<p>This suggests that it would be time for regions to rethink jurisdictional regimes. If not boundaries, then for finding the right level of administration for certain tasks.</p>
<p>Speaking broadly, this post also shows why a high-speed rail program is crucial to the regional economies described. It would be the 21st century equivalent of what the Interstate Highway System was for the 20th century. It would not only provide a means of getting around, but would be key factor in changing the economic landscape.</p>
<p>Jane Jacobs has great theories on how cities grow and their economies take shape. She outlines them in &#8220;The Economy of Cities&#8221; and &#8220;Cities and the Wealth of Nations.&#8221; In both, she said the process of economic health takes place when cities can replace imports and add value to them, in turn making an export economy. As this process grows, what happens next is a transformation of land uses. As economies expand, lower-value functions get shifted out to the cities&#8217; hinterlands, and former small towns and villages become connected to the major city&#8217;s economy.</p>
<p>(The first step was how productive technologies were introduced into agricultural areas. The second step was industrial uses being moved to the agricultural hinterlands as costs rose. A third step was suburbanization leapfrogging over industrial transformation to hinterlands around cities, or suburbs overtaking industrial areas.)</p>
<p>The Midwest is in a unique situation, and I notice the high-speed rail advocates seem to understand this. You have a world-beating dynamo in Chicago, a few healthy smaller city regions, and several struggling cities that have seen their best days behind them.</p>
<p>Fortunately, many of them are within 500 miles of Chicago.</p>
<p>Now imagine if these large cities all became a city region of Chicago.</p>
<p>It might wound the pride of smaller cities to be thought of as a &#8220;suburb&#8221; of the Windy City, but becoming part of a city region would help place them on better footing.</p>
<p>Coincidentally, 500 miles is also the optimum distance for end-to-end high-speed rail service.</p>
<p>It might not necessarily mean an expanded labor market, as you&#8217;ve said, in terms of St. Louis or Indianapolis becoming outright suburbs of Chicago. What it would likely mean is an exchange of industrial functions, rather than explicit labor or commute sheds.</p>
<p>What the cities have to offer in relation to Chicago is comparative advantage. The declining cities have the advantage of &#8220;decline&#8221; that should translate into discounts on transaction costs.</p>
<p>Say you are the decision maker in a global firm headquartered in Chicago. You are entrusted to manage the growth in two key areas of your business: customer sales and market research.</p>
<p>These are both businesses that require the capital, labor and other tangible and intangible resources found in Chicago. You&#8217;ve gotten sweetheart deals from other close and declining Midwestern cities who desperately need the tax base and the jobs, yet the deals are contingent in moving all operations to the cities. Your clients, funders and employees find this unacceptable.</p>
<p>So what is there to do? Split the difference.</p>
<p>You&#8217;ve determined that the sales division is more location-dependent than the research division. While theoretically the research division can be placed anywhere, you decide to put it in a big city along the Midwestern High-Speed Rail Network. It would be costly to expand both facilties in Chicago, but other big cities have made previous investments in civic amenities that can be rejuvenated and all have an educated work force. They also have close ties to the Chicago area without having to sever them altogether.</p>
<p>So, in this case, you decide that the &#8220;winning&#8221; city in the research competition is St. Louis.</p>
<p>It&#8217;s a winner for all parties. Your company has saved on expansion costs, Chicago still keeps a high-value task, and St. Louis has new business that it hasn&#8217;t seen before.</p>
<p>With a high-speed rail network in place, Chicago will see it shedding job functions to the &#8220;hinterlands&#8221; of cities like Milwaukee, St. Louis and Indianapolis.</p>
<p>Chicago, though, can afford this. There&#8217;s already an abundance of monetary and social capital that it is bound to fill that void quickly with new upstart businesses or other growing businesses ready to make the leap to the major leagues.</p>
<p>Second-tier cities, though, may lose functions but never regain anything in their place. Factory towns, particularly, seek to rejuvenate themselves with factories to keep their work forces busy. It has proven to be a losing strategy.</p>
<p>Becoming a big-city hinterland may be a step up for all the cities concerned.</p>
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