My latest Governing column talks about some of the drivers of economic divergence between regions, including globalization, technological change, and lifestyle preferences.
The challenge for promoting a more equitable growth distribution is that most of these came from the market. So it will really take market change to address them. But others were a result of conscious policy changes we can reconsider. Here’s an excerpt:
We’re seeing other new trends contributing to economic centralization, such as the relocation of corporate headquarters into central cities to take advantage of proximity to professional services, talent and international flights. Companies like ADM, Caterpillar and GE have made or announced such moves. These are typically only small executive headquarters, but the loss of senior staff is significant for many of the less advantaged communities these companies are moving away from.
Then there’s technology, which has revolutionized business and many areas of everyday life. Technology-based businesses like Facebook or Google have network or other scale effects that create winner-take-all situations in some domains. This has centralized significant economic power in tech hubs. Technology also requires specialized skills, and the distribution of people with those skills is not even. They are again concentrated in global cities.
And then there are changes in lifestyle preferences, especially among younger adults. Compared to Generation X and baby boomers, millennials with college degrees have shown a greater preference for urban living with its dense, mixed-use development, walkability and public transit. Those amenities are also unevenly distributed, mostly existing in older cities built in the railroad and streetcar era.
Click through to read the whole thing.