Sunday, December 6th, 2009

Review: Megaregions, Edited by Catherine L. Ross

The long-term utility of the megaregion as a distinct planning scale is still unproven. Does the megaregional approach confront or evade the core planning issues of equity, democracy, livability, economic vitality, and design excellence? If Jane Jacobs old quip about a region being ‘an area safely larger than the last one to whose problems we found no solution’ remains cogent, then the current interest in megaregions represents either a logical territorial scaling up to match the rapid expansion of regions, or another attempt by stalwart regionalists to re-assert (and update) the relevance of their old schema.” – Scott Campbell in Megaregions

This review of the book Megaregions, edited by Georgia Institute of Technology Professor Catherine L. Ross, is the second in my three part series on megaregions. I put my cards on the table in my post with initial skepticism about the usefulness of the concept. I will follow this up with a look at potential applications of megaregionalism in the Midwest.

I was very struck by the quote at the top when reading the book. How often to do you find people questioning the very validity of the topic at hand when writing a piece for a book on it? The fact that Ross brings in people who are willing to ask tough questions about megaregions is a testament to her intellectual integrity. It would have been very easy to simply glom onto a topic that shows some early stage notions of being popular in the world at large and trying to flog it for all it was worth. Indeed, Ross is known on this topic, but here she takes an opportunity to shine a light on this emerging concept to see what she might find without excessive boosterism on the subject. As she notes herself in the book, “The quality of a new idea can be judged by the possibilities it creates, especially when such possibilities stimulate new and unbounded interpretations and allow more innovative and beneficial outcomes.” I see this book as dedicated to exploring some of those possibilities and trying to collect and develop frameworks for understanding it and applying it.

The book consists of thirteen chapters, each written by different authors, exploring some aspect of the topic, including looks at Europe and Asia. I will focus primarily on the United States, but don’t want to mislead into thinking this is a US only book.

One of the key questions to answer is, just what the heck is a megaregion? There are a few definitions, but the one I thought was best came from America 2050, a project of New York’s Regional Plan Association. They describe it as “a large, connected network of metropolitan areas that are joined together by environmental, cultural, infrastructural, and functional characteristics.” In short, it is a collection of linked metro areas in a given region. There is an entire chapter in the book devoted to ways to identify and delineate megaregions. And, of course, map them. Here’s the map America 2050 created using their approach:

A few things jump out from this map. First, the megaregion is really an eastern US concept. West of Texas, most of these regions have one main dominant metro, possibility with a satellite or two. The exception the Pacific Northwest “Cascadia” region. Second, the megaregion concept relies heavily on intuitive eyeball appeal. That is, we look at the map and see these clusters of regions and it just seems to make sense that they are related, apart from any academic methodology of boundary delineation. That’s not to say there isn’t logic behind the map, but I believe a lot of the popular appeal comes from its intuitive plausibility. America 2050 does a great job of recognizing this when they reference the cultural aspects of the megaregion. We think of, for example, the Midwest and Northeast as having distinct regional history, culture, values, and economic structures. This powerfully reinforces the intuitive appeal of megaregions. The idea is that we have cities in close proximity, with a lot of common culture and problems, so wouldn’t it be great if they figured out how to work together to solve them?

America 2050 doesn’t have the only map going. Richard Florida, a leading popular exponent of megaregions who wrote a paper on the subject with Tim Gulden and Charlotta Mellander called “The Rise of the Mega-Region“, used images of light emissions from the space to draw boundaries of areas that seemed continuously developed. Here’s his map:

Florida’s definition is based on continuously built up areas, but doesn’t necessarily imply any functional integration, though he has posited this is the case.

And here is the map that is being distributed with the Ross book’s promo materials:

Reading the book and looking at these maps really crystallized in my mind possibly the biggest appeal of megaregions to federal level planners in the Unites States and Europe, even though I have never seen it actually stated anywhere. Namely, megaregions are a convenient abstraction for federal level thinkers to make sense out of the large number of diverse metro areas in America and Europe.

Think about it, there are a huge number of metro areas in the United States. There are a bit over 50 metro areas of over one million people. The Brookings Institution Metropolitan Policy Program deals with the top 100 metros in America. These numbers are simply too high to give proper attention to each.

I’ve championed the notion that there is no one size fits all urban policy and that cities need to develop unique strategies and solutions based on their unique local context (see, “The Mayor as CEO” for instance). But think about it from the standpoint of a think tank in Washington or New York, or from that of Adolfo Carrión, director of the White House Office of Urban Affairs. How do you cope with policies for 250, 100, or even 50 metros? It would be extremely difficult. But it is certainly feasible think about 10-12 megaregions. I think that’s one reason why people so much want there to be validity to the megaregion concept. It provides a very convenient intermediate level of abstraction between the large scale United States (or Europe) and the fine grained detail of individual metro areas.

Brookings did this by positing a “Great Lakes” region to help organize a portion of its thinking. And I did too. As someone who has expressed skepticism on megaregions, I’ve got to admit that my own blog is to some extent a product of that thinking. One of the keys to its success was to pick a topic scope greater than the individual city (and thus to have more than purely parochial interest) but smaller than the nation (where I likely would never have been able to gain traction amongst long established big names). The 12 one million plus metros I focus on is conveniently similar to the total number of megaregions in the US (and the 12 Florida identifies in Europe). And I’ve been able to extrapolate out lessons from them that are relevant cross-regionally, and also to a broader audience as well. The metros of the Midwest actually have a lot of diversity. The strengths, weaknessnes, challenges, and opportunities of, say, Chicago, Detroit, and Columbus are radically different. They require very different policy approaches. Nevertheless, there seems to be some benefit in thinking about them together.

So apart from any real world manifestation megaregions might have, they are an important organizational construct in creating a hierarchy in any sort of large, multi-city geography like the United States or Europe. Megaregions enable people to conceptualize and manage these complex, fine grained territories. It is applying to metro areas the same regional aggregation concept used for functions like the Federal Reserve System (12 regional fed banks) or the federal district court system (11 appellate districts). That is, megaregions are necessary purely as a level in the hierarchy, even if they prove to be a phantom level. They can be defended purely on the basis of organizational and managerial theory even if they have no other application. Indeed, the fact that people persist in trying to find applications for them despite the lack of clear cut success to date shows that at some level they intuitively understand this organizational need.

Robert E. Lang and Arthur C. Nelson had a chapter that hints at this as well, noting that the mere act of formalizing a construct by the government causes people to start paying attention to it. Their example is how the OMB created the construct of “micropolitan areas”. Clearly the idea is that if the federal government created official megaregion definitions, and reported data against it, the concept would take on a life of its own by virtue of that. (Data collection would likely be trivial since megaregions would no doubt be made up of counties, such as by creating a layer above Economic Area). Their idea seems more to create something called a megapolitan area rather than a megaregion, however.

Tridig Banerjee has an interesting chapter further trying to refine the megaregion concept by identifying types of megaregions along a two by two matrix (which, with my management consulting background, I of course love). The dimensions are “galaxy” vs. “corridor” and “mosaic” vs. “network” (hierarchical). The Midwest would be a galaxy-network. Scott Campbell has a chapter asking a number of useful questions, such as the one at the top of this piece.

Ross herself seems particularly interested in the transportation aspects of megaregions, and this is one where it seems to have the most direct applicability. For example, most of the various high speed rail proposals out there revolve around megaregions. There are shared corridors of interest, such as interstate highways, and other important features, such as the Great Lakes. The question is whether these are items of relevance to a megaregion properly so-called, or if they are just the focus of ad-hoc “coalitions of the willing”. I actually suspect the latter as there are many of these (think of the I-69 and I-35 NAFTA corridor coalitions for example, or California’s high speed rail proposal) that exist independently of megaregions. In my view a megaregion would need to represent some true community of interest, in the way that a metro region does, to represent some sort of truly functional element, and I haven’t seen it yet. In fact, I have argued that even things like the Midwest high speed rail network shouldn’t be thought of as a network, but rather as a series of point to point connections linking outlying areas to Chicago. Chicago will not be an HSR hub in the way that O’Hare is a hub – that is, for traffic interchange. Indeed, in we see this in Europe, where there is very little transfer traffic of this type. There seems to be something to this megaregional transportation idea, but I’m not sure what is yet.

The piece I found most compelling was the chapter by Saskia Sassen. In my original piece on megaregions I noted that lots of people talk about them, but no one says what it is we should actually do with them in order to create real value. Sassen suggests how this might happen. Here’s an excerpt:

I argue that the specific advantages of the megaregional scale consist of and arise from the coexistence in one regional space of multiple types of agglomeration economies. These types of agglomeration economies are distributed across diverse economic spaces and geographic scales: central business districts, office parks, science parks, the transportation and housing efficiencies derived from large (but not too large) commuter belts, low-cost manufacturing districts (today often offshore), tourism destinations, specialized branches of agriculture (e.g., horticulture or organically grown food), and the complex kinds of agglomeration economies evident in global cities. Each of these spaces evinces distinct agglomeration economies and, empirically at least, is found in diverse types of geographic settings, from urban to rural, from local to global.

The thesis is that a megaregion is sufficiently large and diverse to accommodate a far broader range of types of agglomeration economies and geographic settings than it typically does today. This would take the advantages of megaregional location beyond the notion of urbanization economies. A megaregion can then be seen as a scale that can benefit from the fact that our complex economies need diverse types of agglomeration economies and geographic settings, from extremely high-agglomeration economies evinced by specialized advanced corporate services to fairly modest economies evinced by suburban office parks and regional labor-intensive low-wage manufacturing. It can incorporate this diversity into a single economic megazone. Indeed, in principle, it could create conditions for the return of particular activities now outsourced to other regions or to foreign locations.

I wrote a four part series in early 2009 called “Reconnecting the Hinterland” which was all about searching for value in attempting to foster a re-created interlinked economy between Chicago and the rest of the Midwest. An answer to Sassen’s question is actually what I was looking for. The simplified idea being, to find some economic activities in which geographic proximity, though not necessarily always in a dense, face to face setting like downtown Chicago, is a source of value; to ask, is there some medium between the “spiky world” of Manhattan and the Loop and the “flat world” of China and India?

I don’t want to jump the gun and go into detail, since that is a part of the next part in this series, but if you are interested, you might want two check out two pieces in that series, “Metropolitan Linkages” (about extended labor markets) and “Onshore Outsourcing“.

One curious omission from this book was the difference between megaregional and non-megaregional locations and whether there was some benefit to being in a megaregion. I can’t help but notice that in the Midwest, Kansas City (in most maps) and Des Moines are both outside of the megaregion yet are two the of the absolute best performing metro areas. Not being part of a megaregion does not appear to have hurt them any. I’d be interested to see some analysis on this.

In any case, for those interested in these things, this is a nice survey book to pick up. It is accessible to the general educated public, but is written in the style beloved of academics, so is likely to be very dry to all but those who are wonky about this stuff. Read the Sassen excerpt to get a sense of what is in store. For those who are in the planning or related fields, it is worthwhile to educate yourself on the megaregion concept to be able to parse a lot of the rhetoric out there about it. Reading this book would be a good way to do so.

I’ll leave you with this quote from Lewis Mumford’s The City in History, to give a perspective from one of the all time great screedmasters on this subject:

Instead of creating the Regional City, the forces that automatically pumped pumped highways and motor cars and real estate development into the open country have produced the formless exudation. Those who are using verbal magic to to turn this conglomeration into an organic entity are only fooling themelves. To call the resulting mass “Megalopolis”, or to suggest that changes in spatial scale, with swift transportation, in itself is sufficient to produce a new and better urban form, is to overlook the complex nature of the city. The actual coalescence of urban tissue now taken by many sociologists to be a final stage in city development, is not in fact a new sort of city, but an anti-city. As in the concept of anti-matter, the anti-city annihilates the city whenever it collides with it.

Don’t hold back Lewis, tell us how you really feel.

43 Comments
Topics: Regionalism

43 Responses to “Review: Megaregions, Edited by Catherine L. Ross”

  1. Alon Levy says:

    One nitpick: Florida’s definition of megaregions is based on continuous regions of medium and high population density, regardless of buildup. In India he turned one of the most rural states into a megaregion because the state has a very high rural population density, higher than this of American urban areas.

    More substantially: Denver isn’t really part of a megaregion, and yet it’s booming. Unlike the Northeast or Midwest, it’s not clear that Greater Greater Denver is a true megaregion, and some characterizations, for example Ross’s map, or Robert Lang’s paper, do not consider it to be one. Other successful cities that are not obviously part of a single megaregion include Minneapolis, and even Houston, which is in flux between the Gulf Coast and Texas Triangle. In Europe, Paris and Madrid are not in any megaregion.

  2. AmericanDirt says:

    Alon, in 2002 Bas Waterhout observed a 20-40-50 Pentagon that includes Paris, as well as London, Hamburg, Munich, and Milan forming the other vertices. It gets its name because this area contains only 20% of the EU’s land, but 40% of its population and 50% of its total GDP. It’s less frequently cited than the Blue Banana, possibly because its less easy to visualize.

    I’ve never seen a study on Midwest regional cities that omits St. Louis, or, for that matter, Kansas City and Des Moines. Many also include Omaha as the western edge of the Chicago hub-and-spoke used in HSR planning. Minneapolis may be the biggest stretch of all because of the absence of strong linkages in close proximity–it only tends to win inclusion because it’s too big to ignore.

    Regarding Denver, I think it’s a stretch as well, but several aspiring political geographers I have talked to consider the conurbation from Cheyenne, WY to Pueblo, CO to be an aspiring smaller megaregion. By that token, they have argued the same with Ogden-Salt Lake City-Provo.

    And wasn’t it sci-fi writer William Gibson who first posited the eventual emergence of BAMA, the Boston-Atlanta Metropolitan Axis?

  3. cdc guy says:

    Mega-region is a new name for an old idea: city-state or principality.

    Through recorded human history waves of centralization and decentralization have struck all organizations from the micro (the firm) to the macro (the nation-state). Note that today, resource-intensive firms such as steel companies are re-centralizing. Some formerly united nation-states have devolved (see: Czechoslovakia, Yugoslavia, USSR).

    Because the organization, development, and economic status of “megaregions” might look to us folks older than 50 as “nations” once did, our nostalgia alone may lead us to imagine their significance for some purpose or another.

    I think I’m with Jacobs and Mumford on this one. As long as we have municipal and state governments in the US (along with very weak regional planning), there’s probably** no “grand unifying theory” of megaregions that will hold.

    **Probably. One might posit that the “exceptions” cited by some are really not exceptions at all, but merely lower-level forms of megaregion. Clearly the low-density space around Des Moines, MSP, Denver or KC would not support a Chicago-scale world city, but in each case there is enough economic activity in some organized web to create “stickiness” around those cities nonetheless. In most of those cases, it’s a combination of state capital, major university, and regional medical center.

    So this concept may be nothing more than an evident artifact of economic geography, not really significant in and of itself.

    Probably one would need to thoroughly study and understand the Italian and German principalities of those countries’ pre-unification eras, along with the competing (and ultimately winning) forces of centralization and nationalization. Possibly one might want to watch China to see if the center holds, or if there is devolution of power there (similar to the breakdown of the other Communist/statist powers) in the wake of vastly differing growth rates in different regions and rapid urbanization of certain places.

    It’s certainly a set of questions that appeals to those with some wonk in them…probably because it will take another lifetime for the answers (if any) to become clear in hindsight.

  4. Alon Levy says:

    AmericanDirt: the Lang paper I linked to omits St. Louis from the Midwest region.

    I haven’t seen any paper claiming SLC as a megaregion… do you have a link?

    The 20-40-50 pentagon isn’t how most economic geographers would think of Europe (and even there, one notes how some of the richest, highest-growth EU cities – Copenhagen, Stockholm, Helsinki, Madrid, Oslo – are outside the region).

    Even the inclusion of London in the Blue Banana is not obvious. The usual geography I see, on blogs such as those run by Financial Times and A Fistful of Euros, is that Europe has a center, consisting of France, Germany, Benelux, and Northern Italy, and a periphery, consisting of everything else. This conception deliberately puts London outside the center, by virtue of its closer ties to non-European cities such as New York. The analysis is that the periphery grew much faster than the core of Europe in this decade, but was struck much harder by the financial crisis. Part of it is also that the core countries are much more pro-EU than Britain, Ireland, and the Scandinavian countries.

  5. John says:

    I think that there may actually be a benefit to being outside a Megaregion. If you’re a city that is geographically far away from other large cities, you have a better chance of attracting talent from the surrounding small towns and rural areas. There is less competition for the population. Des Moines probably wouldn’t do real well if it were located too close to a bigger city, but it can do well attracting the best of Iowa. I think it explains why you don’t hear much about Springfield, IL, which is also a state capitol. It’s overshadowed by Chicago just 3 hours away.

  6. Jim Russell says:

    I tend to think of megaregions as a concept whose time has past. How long ago can we go back and see such maps? Try 1961:

    http://nullspace2.blogspot.com/2008/04/past-future-pittsburgh.html

    http://tinyurl.com/ydwbcn6

    This is classic a hinterland geography imposed on a contemporary hinterworld geography. This is the legacy of seeking a contiguous space in order to define a region. It is more fetish than reality.

    Megaregions are a horribly outdated economic geography that may not work even on a cultural or political level.

  7. JM says:

    At least for the southern megaregion (the Atlanta to Raleigh corridor) I really can’t see any true linkage other than infrastructural ones (the interstate system) and an older cultural one (Southern identity). The cities that have been growing along those veins are basically suburbs of the interstates, populations dispersed across a formerly rural area due to rampant real estate development. I doubt there will be any identity formed until there is true density rather than people just cruising along in their cars from one strip mall to one office park to home.

  8. DaveOf Richmond says:

    Ross’s Midwest mega-region seems insane. It stretches from the Mesabi Iron range to Central Kentucky, from Central PA to the middle of Missouri. Someone please explain to me the economic or cultural commonality of this massive and unwieldy region and how the people of this region are expected to relate to each other as a single region.

    I work for a fairly large company based in Atlanta, or the “Piedmont-Atlantic” / “Char-lanta” mega-region. Over the past couple of years the company has outsourced many IT functions. They did not outsource to Macon, GA or Gadsden, AL or Anderson, SC or any other lower-cost area of Char-lanta. They outsourced to Mysore India and Sao Paulo Brazil. The IT management of my company live in the “MyLanta(is)SaoSore” mega-region. I don’t think a high-speed train line from Raleigh to Birmingham is going to change that, assuming one was even being imagined.

    But thanks for the post, interesting as always.

  9. David says:

    The whole concept would be a little more convincing if they quantified the banking, transport, and trade linkages between the cities. Interstate connections are fixed. More interesting to see how much O&D air traffic exists between two cities, because those links can be pulled at anytime. And to be worth recognizing all, there have to be legit economic ties to have a “megaregion” – and such connections between cities are built around voluntary business dealings, not top down planning from a group of gov’t agencies.

    Also, as the General Mills HQ and a city that still has its own grain exchange, Minneapolis has far more in common with other agribusiness cities like Omaha and KC than Pittsburgh or Cleveland. There’s far lower union participation west of Chicago than east, and a very different economy. Just looking at these maps, it seems like they followed the interstates rather than the trading patterns.

  10. Alon Levy says:

    David, O&D air traffic is a bit weird because of tourism hotspots, and because at short distances ground transportation dominates. In the US, the top two air markets are NY-Miami and LA-SF. And London-NY is one of the top air markets in the world.

    Not all of this is O&D, but the hub system itself promotes more O&D air traffic to the hubs because of the higher frequency of nonstop flights and the cheaper fares.

  11. Wad says:

    We’re not even settled on a definition for a mega-region, let alone to define what kind of authority one should have.

    We can’t be for or against it to know if one could even work.

    Regions formed due to economic transactions are much different than governmental jurisdictions, and in many cases one has no bearing on the other.

    In the U.S., we have the federal, state, county and local governments — then school districts, special-purpose regional districts and metropolitan planning organizations.

    Here’s a new question: Why or why not should we align government jurisdictions to prevailing economic regions?

  12. Wad says:

    Dave of Richmond wrote:

    They outsourced to Mysore India and Sao Paulo Brazil. The IT management of my company live in the “MyLanta(is)SaoSore” mega-region. I don’t think a high-speed train line from Raleigh to Birmingham is going to change that

    Well, look at it this way. Warning: The following contains toxic levels of snark, but it’s meant to be used as a learning experiment.

    The Industrial Revolution arrived in the South about the last 50 years or so. The big difference now is that globalization has made the shelf-life of industrial prosperity much shorter than for the city regions that in previous industrial epochs.

    Whereas the cities of the Northeast and Midwest could count on 150-200 years of industrial cycles, the bottom fell out of the industrial world.

    The South can’t count on industrial prosperity because over in China, a firm can hire a comparable worker for a third of the wage and three times the IQ.

    This isn’t just a problem for the South. Americans everywhere have to realize that the half of the world that lives on $2 a day (more than 3 billion people) does not want us to hog all the prosperity, and the half-billion or so living in modern, economically dynamic regions of the world can do our high-value jobs better than us.

    Is a U.S. effort to build high-speed rail an effort to chase a train that has already left the station? Maybe, maybe not.

    Then again, Americans, try telling the world that you cannot function economically without a single-occupant car for short distances and airplanes for longer ones.

    Then the economic advantages of high-speed trains manifest themselves in the same way as network effects do for telecommunications and computers.

  13. Thanks for starting this interesting conversation!
    The question I think still needs to be answered is: “Why do megaregions matter?”

    My take on this is: Despite all the inventions in communication technology, starting from mail, to telegraph, phone, email, videoconferences, it doesn’t seem that the need to meet in person has vanished, well, it seems that indeed it has increased, because through all this communications you hear of many more people you really want to meet in person. Look at the thousands of people at COP 15 right now! Relationship still evolves around trust, and there is nothing like shaking hands, laughing at lunch and having a beer in the evening to build this trust.

    On the other hand it is still quite inconvenient even in these days to fly around halve of the globe to meet someone for an hour or so. So networks of relationships evolve between well connected places.

    Innovation heavily depends on relationships (loose networks, to be more specific). So regions with convenient connections are important because they create lots of chances to meet interesting contact.

    So in my opinion the concept megaregions should be centered around people transportation networks.

    Standardized services like IT (look at the SAP portfolio as an example) or accounting don’t need this level of trust (exactly because of the standartization) so they can be outsourced to places in India. Cutting edge innovation can’t.

  14. DaveOf Richmond says:

    Wad,

    Thank you for the response. Yes, I am aware of why companies choose to hire workers in China or Brazil over the US. My point (which I didn’t spell out very well) is that one of the argued potential advantages to “mega-regions” is that different areas/cities within the region can specialize in different functions. So, Atlanta would be the “global” city of Char-lanta where the work requiring the skills of highly-trained “creative class” (i.e. expensive) types would be done, but other cities in the region could take advantage of “on-shoring” by doing less difficult work more cheaply than it can be done in Atlanta.

    On-shoring will not happen unless the “creative class” or “talented tenth” types in Atlanta (or Chicago, New York, etc) are willing to choose Macon (or Rockford or Poughkeepsie) over Sao Paulo, which at current they do not appear willing to do – I assume Macon is still more expensive labor-wise and perhaps for other costs than Sao Paulo, so which functions are to be “on-shored”?

    As far as getting people out of their single-occupant cars, wouldn’t the money be better spent on a metro mass transit system rather than on an inter-city high speed rail link? True, a link between cities like Milwaukee and Chicago may open up a larger transit-based commuting area for workers in those metros, but a line from Pitts to Chi does not make that distance commutable – it is still too far and probably too expensive for most workers. Better to improve metro transit in Pitts and Chicago, in my opinion – I don’t think there’s enough money laying around to do everything we’d like.

    Finally, the region is going to be defined, at least partly, in peoples minds. Currently, “creative class” types in The Loop have more in common culturally and “world-view” wise with other creative class types in Manhattan and West Hollywood than they do with middle class workers in Schaumburg and Teaneck. These are the mega-regions in people’s heads – in the heads of people who are likely to create the future economy.

    If the main idea behind creating these geographically-based mega-regions is to get that class of folk to change their ideas and begin to realize that the people living near them have much to do with their personal futures, then great. Is that what the various mega-region theorists are trying to do, just change perceptions back to what seems to be an older, geographically-based, idea of region?

  15. Great discussion – thanks for all the comments.

  16. Alon Levy says:

    Wad: when you say, “Why or why not should we align government jurisdictions to prevailing economic regions?” you have to deal with the politics. Rich enclaves don’t want government jurisdictions to align with the prevailing economic regions. They don’t want the people who tend their gardens and rear their children to live in the same city as they do.

    For example: if all of LA County had had the same income level, LA would’ve become a consolidated city-county already, or at least taken over everything south of the San Gabriel Mountains. Instead, it can’t take over Burbank because Burbank doesn’t want to be in the same city as South Central, and it can’t take over Compton because West LA doesn’t want to be in the same city as Compton. In the Valley you even had people wanting to secede from the city to form their own white middle-class enclave.

    With school districts, it’s even worse. There the white middle class makes unusual efforts to avoid integration. In a gentrifying Queens neighborhood, white parents proposed to organize a separate school in the same building as the current majority-minority school a few years ago.

    Dave: the concept behind the Blue Banana was actually vaguely similar to what you say about people in Manhattan and the Loop. The original impetus behind the idea was that Paris lived in its own bubble, forming ties with France in general and with other global cities, but not with other EU cities. The Blue Banana region consisted of less global cities, such as Amsterdam, Brussels, Cologne, and Frankfurt, where people did and still do form ties with other cities in the same megaregion. This is also true in the Northeast – the New Yorkers I know are willing to consider DC, Philly, and Boston as New York-lite. It just doesn’t happen around Paris or London or Chicago.

  17. AmericanDirt says:

    Alon, the study that used SLC and Denver as two separate mega-regions came from a collaboration between New York’s Regional Planning Association and the University of Pennsylvania; the top of Urbanophile’s graphics is actually a later iteration of the study. I’m not sure the original study from about 2004 was ever published, but you can see that SLC is faintly highlighted. The 2004 version of the “Front Range” megaregion definitely didn’t sweep down to Santa Fe or Albuquerque.

    I believe the 20-40-50 Pentagon is more of a reaction to potential shortcomings of more widely publicized theories such as the Blue Banana. (I.e., exclusion of France as part of the central engine.) It has not caught on to any great degree, though it incidentally includes even less of the UK as a megaregion than the Blue Banana does.

    I’m with CDC guy on most of this (as well as Jacobs and Mumford), though I would hermetically seal the concept of megaregions from any potential theoretical applicability in the US. Even superficial postulates on megaregions still carry a whiff of statist paternalism that a majority of Americans won’t tolerate. Perhaps that’s why the Blue Banana seems to have greater salience both inside and outside of EU spatial planning; the collective ambition is far more about breaking down walls between city-states there and finding commonalities. In the US, federalist principles and state autonomy seems to be growing only more powerful. Obviously just my opinion, and a broad sweeping gesture, but the difference I believe largely explains why megaregions are unlikely to catch on in the US.

  18. Wad says:

    Dave of Richmond wrote:

    As far as getting people out of their single-occupant cars, wouldn’t the money be better spent on a metro mass transit system rather than on an inter-city high speed rail link? … but a line from Pitts to Chi does not make that distance commutable – it is still too far and probably too expensive for most workers.

    Expanded mass transit versus new high-speed rail doesn’t have to be a false dilemma, unless the political regime insists the only way to get both is for one to cannibalize the other.

    They serve complementary but different key markets. If the U.S. would set a 500-mile end-to-end radius of lines, the goal would be to string together several combinations of station pairs to make for a viable line. I stress this because the human mind has a tendency to regress to the “endpoint fallacy,” the deduction that if a line has Chicago and Pittsburgh as endpoints, it must be because most of the traffic is traveling between those two points.

    The 500-mile, end-to-end, zone would most likely be the “day trip” sphere. It would be impractical for commuting, but for day or overnight business and recreational trips, it would be ideal.

    Trips of 100 to 250 miles, though, would likely fall into a reasonable commute sphere. It is within these areas you might see interesting things start to happen. Areas that are hinterlands or declining metropolitan areas may be transformed into suburban or even exurban characteristics of depot cities.

    Yes, it could also be framed as “sprawl on steroids.”

    Then again, high-speed rail is connecting the roads most traveled. While the commute and labor shed expands to an overwhelming scale, the stations with the most demand are going to be in already well built-up areas. The Chicago suburbs of Milwaukee, St. Louis and Indianapolis all have large populations, higher learning establishments and thoroughly urban amenities — all of which become increasingly attractive to those who can’t or don’t want to pay Chicago prices for that privilege.

    The economic scenario for high-speed rail would follow a parallel to David Ricardo’s comparative advantage theory.

    What would a city gain by being a “junior partner” to a depot hub like Chicago or Atlanta? They would gain in economic transactions in the same way suburbs did when streetcars, and later automobiles, came along.

    If cities such as Indianapolis or St. Louis aspire to knock off Chicago from its perch, they have a tougher time as competitors. Aaron has mentioned the “value proposition” strategy of cities. These cities can offer lower costs than Chicago, but Chicago’s higher costs are largely in part to its “Chicagoness.” What’s Indianapolis’ “Indianapolisness” or St. Louis’ “St. Louisness?”

    Here’s one way these cities can do a little of both. They can sell themselves on their cost arbitrage, but at the same time, sell their proximity to Chicago via a high-speed train. The closer-in big cities can take advantage of businesses who need the cost advantage, and sell their “big-city amenities at suburb prices” as a tag line.

    It also lightens them of the burdens of tying up monetary and social resources into growing bigness. A train line is far simpler than having to reorganize bureaucracies, sink capital into destination-oriented commerce (convention centers, international airports, luxury hotels, entertainment and resort districts, etc.), and tie economic fortunes to economic transplants. These all have very large carrying costs.

    Chicago, in turn, won’t see the trains taking away their fortunes. It’ll incorporate these cities into its commute and labor shed, as well as create new opportunities to fill possible voids. The strength of well-established cities is resilience and adaptation to change. Chicago has weathered time better than most of the cities around it. If it has done so for the last 150 years, it’s overall prospects look bright for the next 150 years.

  19. Alon Levy says:

    Wad, first, there’s no competition between HSR and local transit simply because local transit is almost a full order of magnitude more expensive. At normal world costs, HSR costs $15-30 million per route-km, and a fully built-out national network in the US would have 10,000-15,000 km, for a total cost of $150-450 billion.

    Subways cost $150-500 million per km, depending on how much they run elevated and how expensive the city is; the trend is toward fully underground lines. And for American cities to imitate European cities’ transit coverage, they’d need about 30 km of subway per 1 million people, for a total cost of $1.5-4.5 trillion.

    As for high-speed rail: bear in mind that Marseille has 3-hour service to Paris, and still looks like shit. In general, the commute aspect of HSR can revitalize small sections of cities, but most traffic is intercity and comes from larger cities. In the Midwest, the dominant traffic would likely be from Chicago to St. Louis, Detroit, the Twin Cities, and Cleveland.

  20. cdc guy says:

    Alon, regardless of cost, it is the lack of availability of transit support in the outlying cities of the Chicago mega-region that makes HSR valueless here. The car-less Chicago resident will not be able to navigate St. Louis, Cleveland, Detroit, Indianapolis, Cincinnati, Columbus or the Twin Cities without a car.

    US HSR will only succeed where there is a supporting dense web of local-transit infrastructure; that’s why it works in Europe and why it would work on the Boston-Washington corridor in the US. US HSR outside the NE corridor is a non-starter unless and until local transit is greatly improved.

    The Interstate System comparison doesn’t hold here, either; in fact it works against your argument that we should do HSR first because it’s cheaper than city transit. The Interstate infrastructure connected cities that already had invested significantly in internal road grids; getting around or through big cities wasn’t the problem when the Interstates were conceived. Getting between them was the issue.

    With transit here in the hinterlands, the problem is the exact opposite today: it’s hard to get around inside the metros carless, while getting between them is already relatively easy by air.

  21. Rosco says:

    Interesting post & discussion.

    When looking at the various maps one of the things that jumped out at me was the strong correlation to the alignment of major university athletic conferences (and their further subdivisions); namely the Big Ten, Big Twelve, PAC-10, SEC, ACC, Big East. Actually, I think in re-inforces the idea as these bodies tend to organize around history, culture, values, and competitive/complimentary economic structures.

  22. Alon Levy says:

    CDC Guy: actually, the Interstates were part of a decades-long government policy of not investing in urban roads. In the 1940s, many urban streets were still unpaved, since unlike rural roads and intercity roads, they were ineligible for federal aid.

    And I’m not saying HSR should come first. It shouldn’t, except for demonstration projects like Boston-DC, Chicago-StL, and LA-SF. St. Louis has a pretty big light rail system by route length – it just doesn’t get a lot of ridership. Many American transit systems are monocentric around the Amtrak station, which means that they’re useful as HSR feeders, if little else.

  23. Wad says:

    CDC guy, would you accept the premise that the passenger aviation industry is dying because airports have terrible public transit connections?

    Sound preposterous?

    Well, if those other Midwestern cities you mentioned do not allow you to travel effectively by public transit, the private sector has exploited this transportation void.

    The “black swans” in this HSR scenario are rental car companies, taxis and airport shuttle vans. Passengers won’t be left stranded at the station. Even if they don’t have facilities at the stations, they can route the vehicles to pick up passengers.

    Who knows, maybe Greyhound will embrace intermodality and orient itself as a complement to the system and possibly even attract a ridership that’s not coming from or going to a penitentiary.

  24. Alon Levy says:

    Wad, airports have a fraction of the volumes of HSR. They compete on airport-to-airport travel time, and get most of their revenues from city pairs on which there is no alternative, such as intercontinental travel or medium-distance travel where driving would take 15 hours.

    HSR isn’t like that. It competes on overall transit time. And its primary competition is cars, not planes. HSR routes can decimate air travel and still underperform – just look at Eurostar. When you’re talking about Chicago-St. Louis distances, people really could say things like “If I need to rent a car, I might as well just drive the whole way.”

    Remember the HSR conference in California, the one that some anti-HSR writer portrayed as anti-HSR when it was actually mainly supportive? It was blogged a few weeks ago on CAHSR Blog. Those mainly supportive people complained about poor transit connections, too. These aren’t some random blowhards who need to take their meds; they’re actual transit experts.

  25. Alon Levy says:

    Wad, on another note: air travel does gain when it has better transit connections. In Korea, HSR lost 1.3% of its ridership year-on-year whereas low-cost air travel gained 5.6%, which the CEO of low-cost carrier Air Busan attributes to Seoul’s opening a new subway line serving its domestic airport.

    HSR is still the dominant form of transportation between Seoul and Busan, and is likely to gain even more when the final high-speed segment is completed next year, speeding up travel. But it already has large subway systems to connect to at both ends, something air has struggled with.

  26. Wad says:

    Alon Levy wrote:

    Those mainly supportive people complained about poor transit connections, too. … they’re actual transit experts.

    Here’s the problem. Local transit connections are benefits and burdens that are localized.

    What do you do with cities who want high-speed rail but will not fund corresponding local transit connections?

    Should a high-speed rail station be contingent upon establishing a minimum level and scope of transit service?

    You are going to encounter places that may show support for high-speed rail but animosity toward transit because of ideological reflexes, toxic race relations, or pervasive “country” or “small town” mentalities.

    The other problem is that designing a transit system to feed into high-speed rail means you build a one-destination transit system at the expense of meeting local needs. You can have a terrific bus and rail system for getting to and from the train station, yet useless for in-town trips.

  27. Alon Levy says:

    Well, it depends on which city you’re talking about. If there’s already a line between two cities with decent transit connections, say LA and SF, then the cost of opening a new station at an intermediate point is very low. Even if Fresno and Bakersfield decide good transit is un-American, the incremental cost of giving them stations is low enough for it to be cost-effective. Demand patterns would likely be such that most trains would skip those stations, but the extra local trains would probably be worth the cost.

    The problem is when you want to build a new line to an endpoint without good transit. For example, Chicago-Detroit would flop unless Detroit built a transit system befitting a metro area of 5 million, instead of a one-way people mover loop.

    And you’re absolutely right about the difference between local need and feeding HSR. For example, LA already has okay connecting transit if all you want is to get to Union Station. On the other hand, sometimes the local and HSR needs coincide. If LA modernizes Metrolink the way Caltrain intends to, or if Chicago connects all of its downtown Metra terminals, it will improve both local transit and HSR connections.

  28. DaveOf Richmond says:

    Thanks for the interesting HSR discussion. We’ve strayed a bit from the original post’s intent, which was mega-regions. I’m sure HSR can help facilitate more economic interaction between relatively close metro’s like Chi-StL or Pit-Clev. But it doesn’t make the whole mega-region as defined in the maps above more of a true region, because the distances are still too great, with the exception of some like Ross’s DC-Virginia or the Phoenix-Tucson one (is that really a “mega” region?).

    Anyway Pitt-Clev already have some initiatives going (TechBelt for example) without having to see themselves as a mega-region or having HSR. So what I’m seeing are global “regions”, if they can be classed as such, based on computer and shipping networks, and potential smaller “dual-metro” or, to be oxymoronic, “mini-mega” regions that are geographically contiguous, but of a more limited scope.

    So, say I’m a fairly sizable company HQ’d in Cincy, perhaps much of my manufacturing is done in China, my IT in India, my helpdesk in Mexico, or wherever. I have some local workforce to support HQ, perhaps a legacy manufacturing plant in the area plus one in Lake Charles, Louisiana. Where’s the mega-region here?

    On the other hand let’s say I’m a small startup in Cincy. I have 40 employees, most of whom are in the Cincy area – perhaps I have some sort of expert consultant who is based in Philly, or Boston, or San Fran and works across the computer network. I’ve noticed much of the demand for my product is from some tech heavy place like Seattle or San Jose, so I’m going to open an office there. Where does the mega-region come in?

    But both the exec’s at big company and the brains behind startup plus some other “elites” in Cincy, along with similar people in Louisville, may see value in linking certain initiatives between the two cities, possibly because there’s already some established historical interactions between the two metro’s (i.e. alot of people know each other), or because both metro’s have a desire to do something in regards to the river, or they see shared transportation advantages between the two metro’s, etc. It’s easy to travel between the two cities on a fairly regular basis if desired, to witness firsthand what effect your initiatives are having.

    These two kinds of regions, or economic networks, make sense to me going forward. The big midwest-sized or southeast-sized regions don’t, from what I can see. Edison went outside of NYC to Schenectady and created an economic linkage way back when because Schenectady was the Guangzhou of 1900 (cheap land/labor/gov’t) and the distance was sensible for the time. Today the two cities just happen to be in the same state.

  29. Wad says:

    Dave of Richmond, here’s a way you can probably get a concept of a mega-region. And it won’t involve HSR, I promise. :>

    First, a disclaimer: Remember, there’s no single operative definition of a mega-region. A Richard Florida mega-region would differ in scope than an America 2050 mega-region. Both tend to identify the same areas, but both used different methodologies to get to the same conclusions and there are quibbles over peripheries.

    Here’s an idea for the Urbanophile Message Board entry for what a mega-region could be.

    For the sake of discussion, let’s call it the Metro 500 (TM, though available for anyone through a Creative Commons license :>).

    Just as the Standard & Poor’s 500 index includes a large basket of component companies, in order to give a picture of the economy at large, the Metro 500 could do the same thing to weigh the economic dynamics of metropolitan areas.

    If you’re really good at statistical analysis or demography, you could undertake this. Though this is something best left to a university or think tank.

    Start with a geographic unit like a CMSA, MSA or a broadcast Designated Market Area. These tend to encompass economic spheres better than political jurisdiction boundaries. Most transactions cross cities and counties, and some regions also cross state boundaries (New York City suburbs fall in New Jersey and Connecticut, for instance).

    Then you assemble data sets based on the 500 leading drivers of the local economy. Almost all metropolitan areas have enough components to give you 500 in any metric.

    The one to start with is the Metro 500 Payroll Division. Here, you will attempt to see how employment wages are earned and later spent. The recipe:
    1. Find the 500 largest employers and measure them by a new index we shall call “Payroll Capitalization.”
    1A. To calculate Payroll Capitalization, you take the number of paid workers who reside in the metropolitan area and multiply that by compensation outlay. Paid workers include payroll workers, independent contractors and employees working for subcontractors. However, inclusion of executive level jobs may be optional owing to the fact that compensation may come in other forms than take-home pay and securities, in particular, are realized elsewhere.
    2. Try to track the residences of these workers and note concentration of residents and activity on guideways (roads and rail).

    This map is a hybrid of commute/labor sheds and local economic impact surveys. This gives a picture of how economic activity circulates in a given area. The Payroll Division attempts to find the contours of a city region.

    These threads will get too long so I’ll break the other Metro 500 matrices into separate threads.

    To be continued …

  30. Wad says:

    Continued from Thread 29 …

    The Payroll Division attempted to find the contours of where people are earning their incomes and attempts to shape a city region from them.

    It is a composite of the 500 largest activities, and does not hold fear or favor toward job functions. I say this because no region should be penalized for not having a high-growth economy or lead in an emerging-growth field.

    This is used to gauge what would be considered the mega-local region. There’s no ideal size, and regions can be the existing commute shed or a powerhouse like in Northern California, which has integrated the metropolitan Bay Area, Sacramento, the Wine Country and the northern Monterey Peninsula into an interdependent entity.

    The next step would be to evaluate a mega-region based on consumer activity. This chart would be the Metro 500 End User Division. This category has two subdivisions: Regional and Super-Regional.

    For Regional End Users:
    1. Find your metropolitan area’s 500 largest providers of any goods and services to consumers with any presence in the area (from a storefront all the way to global headquarters, but excluding logistics facilities such as warehouses or transfer depots).
    2. Examine marketing reports to determine the residences of the consumers of these stores. Exclude mail-order businesses, however.
    3. Next, trace the presence of sister establishments within a 10-hour one-way ground trip. (That’s typically the time of truck deliveries).

    This will reveal a connected web of consumers, retailers and suppliers across a broad commercial area.

    For Super-Regional Users, this should be used if your metropolitan area houses a flagship headquarters or a regional headquarters.
    1. Find companies in your area that have either a global headquarters, regional headquarters (one that has an executive-level head) or a logistics distribution within your metropolitan area.
    2. Plot the locations of the regional headquarters and distribution facilities and the territories they serve.
    3. Then plot the location of the top-level headquarters.
    4. If applicable, plot the location of the cities where these companies’ securities are traded at an exchange.
    5. Instead of looking for the largest 500, run through steps 1-4 from the largest company by market capitalization (or gross revenues by nonpublic companies) and see how many steps it takes you until these zones cover the globe.
    Optional: You could draw an overlay map of air and ship lanes by passenger and/or cargo volume to tie together metropolitan areas.

    The Super-Regional Users gauges where your metropolitan area stands in the realm of global commerce. The fewer steps it takes to cover the globe, the more important your metropolitan area is for global commerce.

  31. Wad says:

    Continued from Thread 30 …

    One of the other Metro 500 surveys to define a Mega-Region is the importance of non-retail economic transactions. These are the sales we don’t see as consumers, but would have to deal with if we were purchasers, account executives, industrial designers and engineers.

    These B-2-B industries are a value-adding sector and produce economic activity that may not be in the popular consciousness. Some are more obvious: marketing, advertising, software development, etc. But what about the less obvious? Think about industrial functions that produce goods and services for other industries? You could have an example of a big factory producing chemicals for a janitorial supply firm. The bottles will just have letter-number combos for names, but it may be a huge employer and have clients all across the world.

    These businesses help local economies just as much as more prominent companies, but they also have another purpose: they help businesses provide businesses. The most robust city regions often have a respectable B-2-B infrastructure that can adapt to several industrial functions.

    So create a Metro 500 index, B-2-B division.

    1. First, find your metro area’s 500 largest B-2-B providers by a combination of Payroll Capitalization and either market capitalization for public companies or gross receipts for privately held ones.
    2. Plot these areas out within your metro area.
    3. Create two separate maps, one for supply sources and one for demand sources.
    4. Go back to your metro area’s B-2-B providers. Ask them to produce a list of all the goods and services they purchase. It would help to categorize these purchases (e.g., agricultural, durable machinery, computer hardware and software, etc.) and try to note the top-level headquarters city of each of these jobs, if applicable. Add the cities where the B-2-B companies’ and suppliers’ securities are traded on an exchange.
    5. Gather this volume of producers into a database and query what are the 500 largest suppliers by payment outlay. A database will find a lot of overlap and see how complementary and rival companies are tied together (say by both using the same major commercial bank).
    6. For more detail, find out how these business components are delivered to the metropolitan area (by ground on rail or truck, by sea and by air).
    7. You’ll be able to see where your supplies come from and where your money goes to. Be sure to separate it into three categories: Home-grown (within the metropolitan area), Regional (within a 12-hour drive) and National/Global (everywhere else).
    8. Once you have your supply sources established, repeat steps 4 and 5 but this time using these same firms’ customer list by payments received.
    9. Also note the top-level global headquarters of your clients, as well as their securities exchanges if applicable.
    10. For more detail, also log how goods produced leave the area by ground, sea and air.
    11. You’ll now also see where your money comes from and your supplies go to. Note the Home-grown, Regional and National/Global sources of customers.

    You now have another Mega-Region of your clients and vendors. These will take the most irregular shapes of all, as they’ll be noncontiguous and otherwise escape the contours of geography. They won’t necessarily escape the contours of transportation, as the connectors between these areas would be physical infrastructure.

    If you could create a 3-D map, these supply and demand regions would look like those model molecules found in chemistry classes. The “balls” would be your supply and demand regions, and the “rods” would be the transportation infrastructure allowing the connections.

    A Metro 500 B-2-B map would also have another economic use: Your city region can gauge its dynamism through a combination of the supply and demand regions. Look for the how and where of balancing transactions.

    The healthiest, most dynamic cities will have an equal balance between supply and demand. These forces will balance each other out.

    Any imbalance biased toward supply or demand leaves your city region’s economy exposed to vulnerabilities.

    Supply-biased regions are economically stagnant because transactions are geared around moving product. The further away the product is from the end user, the poorer the area is. Agricultural and resource-rich areas are very poor and stay that way, because economic transactions tend to move like a river and balancing it out is like rowing upstream.

    Demand-based regions are also economically stagnant, though in a different way. Think of resort areas or any places heavily dependent on tourism as a good example. Much of the money brought into these areas has only the most local of velocity. The jobs may be plentiful, but most of the money is tied up in the “curb appeal” of the resort area. Also, there’s little incentive to innovate since the jobs are people-centered and there’s little advantage in introducing labor-saving technology. As a result of this, people become ever-dependent on these jobs. So the money generated in a heavily demand-oriented economy is “lost as heat.”

  32. Wad, thanks for all those ideas. You’ve once again inspired jealousy that I lack the ability to do much basic research like that.

  33. DaveOf Richmond says:

    Geesh, Wad. A mega-region mega-comment! Lots of interesting stuff in there. Maybe I was trying to say what you have here:

    “You now have another Mega-Region of your clients and vendors. These will take the most irregular shapes of all, as they’ll be noncontiguous and otherwise escape the contours of geography. They won’t necessarily escape the contours of transportation, as the connectors between these areas would be physical infrastructure.”

    “noncontiguous”. But I like your comment about the super-regionals. This seems to have some applicability in current reality. The “mega-local” region makes sense to me. Still thinking about the bigger stuff. Thanks for typing all that.

  34. Alon Levy says:

    Wad, I’m pretty sure that if you applied this index to existing cities, you’d find that New York, London, and Tokyo form one megaregion.

    On another note, I’m not sure why you call resort areas demand-based. In terms of what powers their economy, it’s no different from supply regions: it’s natural resources, whether oil or fertile land or natural beauty. I’m not a trade economist, but I believe one area where there is a difference is trade balance. The OPEC states have some of the world’s highest positive trade balances relative to GDP; small island states, including resort states like the Maldives and free energy states like Iceland, have some of the highest negative balances – see source here.

    But one class of true demand-based states, with very high trade deficits, includes the various hotspots of foreign investment. Iceland was one, until the financial crisis. The Eastern European states were others. Those countries are unstable for reasons other than resources – they have no insulation from global finance, which leads them to crash at the first sign of global trouble. The list of European states most impacted by the current recession is almost identical to the list of European states with the highest negative trade balances.

  35. Wad says:

    Aaron and Dave, thanks for the kind words.

    Aaron, you would be an asset to putting a Metro 500 list together for Indianapolis at least. I’m pretty sure you could build some amazing database architecture to make an endeavor like this possible.

    Universities might be doing this kind of research already. See if they have anything you can use.

    Dave, the B-2-B index I’ve posited is useful for your business sector but is one piece of your area’s overall economy. It’s more useful for the corporate end, but workers might find the Payroll Division more of use.

    Think of these datasets as layers on Photoshop or Illustrator. You can overlap them and see what regions can take shape. You can toggle them on and off. The B-2-B profile for your region may encompass the globe, but there’s still a very important local economy that should not be overlooked.

  36. Wad says:

    Alon, the reason why I classified something such as a resort area into a demand region and not a supply region is to show that even higher-value economic activities can have pitfalls if they are out of proportion.

    A resort area, per se, has the mirror image of a supply region in economic dynamics. A true supply region, though, has its source of wealth extracted from the area with value added elsewhere. The supply regions don’t benefit from the extraction, and must remain immiserated in order to be an economic participant. It has been an exception, rather than the rule, for supply regions to lift themselves out of the resource curse.

    A resort area in a poor region of the world has access to goods and services, labor and capital. Generally, tourists aren’t extracting the scenic beauty of an island paradise or a mountain chalet and taking it back with them. They even tend to be economic oases in what could be lands rife with political and financial instability.

    Resort areas are different from the supply regions in that economic value is added on-site, not away in other corners of the world. Tourist areas support a kitchen staff, local entertainers and some locally sourced merchandise.

    However, despite the flood of money brought in through a tourist economy, the region remains poor. Five-star accommodations will pay workers reasonably well for the area, but they may still go home and live in squalor.

    The money brought in through tourism is often a capital trap. Most of the money is tied up not in labor, but the upkeep of the resort areas. Furthermore, capital will continue to gravitate toward this industry, crowding out any local opportunities for more home-grown, economically dynamic transactions.

    The same could be said about tax havens and the financial bubble cities like Dubai or the high-trade-deficit areas you have mentioned.

  37. Alon Levy says:

    I’m not sure resort areas are actually trapped in anything. It’s hard to tell because Cancun and Phuket were never productive, import-replacing cities. On the other hand, the French Riviera is full of resort development not far away from industrial parks; Nice is arguably the second richest city in France, next to Paris.

    The same goes to tax havens. The Cayman Islands aren’t the best example here. Hong Kong, Singapore, and Monaco have all prospered perfectly well as independent cities with low taxes. Switzerland is a finance haven, and while its growth has faltered recently, it’s not in a resource trap like any of the OPEC countries, which have had negative per capita growth in the last 30 years.

  38. Wad says:

    Alon, you said, “I’m not sure resort areas are actually trapped in anything.”

    In an unproductive area, a dominant industry tends to crowd out other industries from sprouting.

    What happens in an unproductive resort area? An inflow of capital causes the value of a currency to rise, making prices high. Resort areas also often do businesses on first world terms: buying in large quantities, doing business according to contract and setting prices in a strong currency like the dollar, pound or euro.

    For native suppliers that manage to set a deal, the resort economy may compete with fulfilling local needs.

    A money-making resort area often puts the region on a path of dependence. Public infrastructure will be for the movement of tourists and resort goods. Education systems will likely prop up hotel, restaurant and resort management and vocations.

    If the resort economy is seen as vital, there will be reluctance to branch out into other economies that are independent of the dominant tourist trade.

  39. Alon Levy says:

    Okay, this is factually wrong. Cambodia has a burgeoning tourism economy, which has grown to be its second largest, and uses US bills (but uses its own currency for small denominations, instead of US coins). But it also has a strong textile industry, which is still its largest, and the growth in foreign tourism has spurred a large demand for language education.

    What you say about unproductive areas staying unproductive is true regardless of how much tourism they get. And the productive areas don’t have a problem – again, look at the Riviera, or at the California coast. It’s not like with natural resources, where there’s a well-known Dutch Disease afflicting even rich countries that make oil discoveries.

  40. Alon, it sounds like Wad is talking about tourist towns, while you are talking about tourist countries or larger regions.

  41. Alon Levy says:

    It’s possible. On the other hand, one of my main examples here, the Riviera, is basically a city-region. I think the individual towns there that have tourism and the towns that have industry are different, but that’s because the tourism clusters near the coast and the industry near the inland highway.

  42. Wad says:

    Wow, 41 threads already. Most of it with me and Alon debating what regions are productive or not, and why and why not.

    No. 42 will not continue it. I have thought of two more megaregion dynamics to add to the Metro 500.

    The first is the Metro 500 Philanthrophy index.

    Again, these lists seek to serve what defines a metropolitan area’s economic transactions in a way an index like the S&P 500 tries to track the overall economy.

    This one, though, will track economic transactions by a metropolitan region’s nonprofit and not-for-profit sector.

    This sector has also grown in tandem with overall profit growth. Despite not organized around generating profits, these organizations still have an economic impact in that they hire workers, purchase supplies and either provide money or services.

    Admittedly, this is going to be the trickiest to calculate and may need the most refinement. Feel free to add any input into how this could be cleaned up.

    1. Find the 500 largest non-profit/not-for-profit institutions either headquartered or providing a physical presence in your metro region.
    1A. Don’t commit to the list just yet. Thin it out by eliminating government agencies or any semi-public agency more than 51% controlled by a government body. Also eliminate the presence of any political organizations classified as a 501(c)(4) under the U.S. tax code and any labor unions. Furthermore, eliminate any instances where a nonprofits’ presence is only a mail collection center (a PO box or a donation processing facility either directly operated or outsourced).
    1B. For religious organizations, exclude ministerial and houses of worship transactions but include any services provided beyond the celebration of congregants.
    1C. So what does it leave? Generally, anything recognized under the law as a nonprofit/not-for-profit entity. That would be: Charities, educational institutions, health and well-being services (including medical centers, many of which are classified as nonprofits), arts institutions, historic organizations, service clubs and grant-making trusts and foundations.
    2. Rank these institutions by total assets and classify them by their stated mission.
    2A. When calculating medical center figures, only count foundation and physical assets. Exclude payments received and receivable for services performed.
    2B. When calculating educational facility figures, exclude revenue from tuition and other expenses borne by students.
    3. Ask these institutions to provide a list of their largest transactions received or monies awarded. Rank these by absolute value, in other words not subtracting a grant made from monies earned (a grant award that leaves the metropolitan area will sustain a nonprofit activity somewhere else, so it shouldn’t be counted as a liability against your area).
    3A. Exclude individual donations or monies earned through individual donation campaigns. Just leave in large, identified gifts, grants, endowments or the value of donated in-kind items from single sources.
    4. Plot out the sources and destinations of these funds. Make a note of the velocity of funds and the purposes they were given.
    5. For institutions with a national and international presence, plot out the home city of the top-level headquarters for that organization.

    This would be as noncontiguous as the B-2-B example I wrote about in comment No. 31, only this chart is far more fluid. For one thing, the connections are less concrete than the B-2-B index, since these aren’t necessarily bound by transportation access. Second, this chart will change its shape like an amoeba frequently.

    There could be an epic disaster, like Hurricane Katrina, where there will be a sudden flow of aid to an area. Second, the sources and destinations of grants will shape even in other times as grant recipients and donors add or subtract services.

  43. Wad says:

    I’ve promised a second entry, and I’m finally getting around to it. Hope everyone had, and is having, a good holiday season.

    The next Metro 500 index entry is not for those too afraid of controversy.

    This is the Metro 500 Immigration Economy index.

    Part of what makes large cities dynamic is their ability to attract inflows of populations, not just from other parts of the country, but also the world.

    This is also the most difficult to broach, since it can provoke so much enmity. It’s not just an American issue. Immigration in Europe from Slavic states, the Middle East and Africa has also spawned reactionary political movements.

    This can be also the hardest index to measure, because it depends on how the immigrant society integrates with the established sociopolitical climate. Some areas can offer a relatively tame interaction, while others have become so toxic that immigrant populations are “hidden in plain sight” and might be supporting a large underground or perhaps a lumpen society.

    This, however, would attempt to trace legitimate economic transactions through employment and business creation through international migration.

    The Metro 500 Immigration Economy index attempts to trace a metropolitan area’s source of people, see what social and economic links develop, and examine whether a remittance economy exists. That is important to consider since there could be large flows of money to the nation, or remittances may make up a large share of the country’s GDP (see this IMF posting for sources and recipients: http://www.imf.org/external/pubs/ft/fandd/2005/12/picture.htm ).

    1. Find a source, such as Census or university data, that can detail what percentage of a metropolitan area’s population are foreign-born or first-generation. Note their countries of origin.
    2. In one large source category, track the 500 largest sources of income.
    2A. First find the largest established employers of immigrants by Payroll Capitalization (see post 29).
    2B. Next tabulate a list of the largest businesses established or owned by foreign-born or first-generation entrepreneurs by gross recepits./
    3. Combine the categories of step 2 into a chart, but detailing if they are employers or enterprises.
    4. Find your metropolitan area’s remittances sent through banks or wire services and their destination states.
    5. Optional: Find the value of goods and services that are imported from the immigrants’ home countries.

    This chart attempts to find the economic ties between home and destination countries. It also shows how dynamic a city region is by how much economic activity can carry a much larger, remote population in a relatively small area.

    Think about the sprawl of Northern or Southern California.

    Neither are shining examples of great urban planning. Yet consider that the economic transactions of these two mega-regions. There’s a population of about 25 million, in the land area of what would be the size of a medium-sized state. Yet the economies of these two mega-regions are supporting the populations of almost every country on Earth! The same is true of the Bos-Wash corridor, though in arguably a more concentrated space. South Florida supports the economies of two continents.

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