Thursday, June 17th, 2010
Constantin Gurdgiev is an economist based in Ireland who writes at True Economics. He recently posted a story exploring Dublin’s weight in the Irish economy. It contained the following very interesting graph, which is a mashup of metro % of national population vs. metro % of national GDP:
This graph is a bit difficult to parse. The % population vs. % GDP are the axes, and the size of the circle for each city supposedly represents the ratio of the two values, though they look off to me. The larger the circle, the bigger the city’s economic share relative to its population share. (Full data below)
A few things stand out. One is obviously that Dublin is overwhelmingly dominant in Ireland’s economy. It has almost 40% of Ireland’s population and almost half its GDP. It’s really hard to separate the Dublin economy from the Irish economy, which I believe is the point Gurdgiev was making. A national economy strategy will to some extent be a Dublin economic strategy. That’s an important lens to bring to the discussion.
You also see the same high influence in other primate cities like Seoul, Brussels, Budapest, Lisbon, and to a bit lesser extent Paris and Mexico City.
This chart also shows the incredible overall power of the United States. New York, arguably the ultimate global city, only accounts for 8.5% of the US economy, and 7.8% of its population. That 1.1 ratio means that not only is New York a comparatively small part of the US population, it does not have economic impact that is particularly out-sized relative to that. Only Sydney has a lower ratio in this group of cities.
The general pattern from this data is that in most developed countries you see fairly low multiples of % GDP to % population. That makes some sense as development is more evenly spread in these places. In fact, the ratio is below 1.5 for all developed nation cities except Brussels (4.4), and is below 2.0 in nearly-developed places like South Korea and Hungary. Even mighty Paris is only a 1.3. (I wish London were on this chart). Meanwhile, Shanghai is 7.1, Mumbai 3.3, etc. Clearly in developing nations major cities is where the action is. In this light, 1.1 for New York probably says more about the advanced state of the US economy than it does about New York itself.
I’d love to see a more complete version of this analysis to see if the trends hold up more broadly. In the meantime, here’s the data for the above chart: