Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
We know that urban living has been seeing a renaissance over the last decade or so, but as recently as 2002 - 2007 (pre-Great Recession), the suburbs and peripheral areas were still seeing significantly higher job growth: 1.2% per year in the periphery versus 0.1% in the city center. The “city center” is defined as a 3 mile radius around the center of the city in this study.
However since 2007 things have flipped:
Chart Source: City Observatory
Why is this happening? Here’s a snippet from City Observatory:
The strength of city centers appears to be driven by a combination of the growing attractiveness of urban living, and the relatively stronger performance of urban-centered industries (business and professional services, software) relative to decentralized industries (construction, manufacturing) in this economic cycle. While it remains to be seen whether these same patterns continue to hold as the recovery progresses, (the latest LEHD data on city center job growth are for calendar year 2011), there are structural forces that suggest the trend of center-led growth will continue.
In some ways, it just makes intuitive sense. People started returning to cities and so the jobs followed (although there were also structural changes to the economy).
The big question, however, is whether this trend will continue? My bet is on yes. What do you think?
The following chart is from City Observatory. It compares per capita income against the college attainment rate for the largest US metropolitan areas. If you hover over a circle it’ll tell you the metro area and what the precise numbers are. If you can’t see the chart below, click here.
https://public.tableausoftware.com/javascripts/api/viz_v1.js
What they found from this data set is that educational attainment – the percentage of the population with a 4-year college degree – is the single most important factor when it comes to urban economic success. In fact, according to City Observatory, it accounts for 60% of the variation in per capita income across the metro areas listed above. That’s huge.
So even though people like Peter Thiel might be encouraging kids to drop out of College and start a company, having a well-educated population is a really important thing for cities. Actually, it’s the most important thing.
We know that urban living has been seeing a renaissance over the last decade or so, but as recently as 2002 - 2007 (pre-Great Recession), the suburbs and peripheral areas were still seeing significantly higher job growth: 1.2% per year in the periphery versus 0.1% in the city center. The “city center” is defined as a 3 mile radius around the center of the city in this study.
However since 2007 things have flipped:
Chart Source: City Observatory
Why is this happening? Here’s a snippet from City Observatory:
The strength of city centers appears to be driven by a combination of the growing attractiveness of urban living, and the relatively stronger performance of urban-centered industries (business and professional services, software) relative to decentralized industries (construction, manufacturing) in this economic cycle. While it remains to be seen whether these same patterns continue to hold as the recovery progresses, (the latest LEHD data on city center job growth are for calendar year 2011), there are structural forces that suggest the trend of center-led growth will continue.
In some ways, it just makes intuitive sense. People started returning to cities and so the jobs followed (although there were also structural changes to the economy).
The big question, however, is whether this trend will continue? My bet is on yes. What do you think?
The following chart is from City Observatory. It compares per capita income against the college attainment rate for the largest US metropolitan areas. If you hover over a circle it’ll tell you the metro area and what the precise numbers are. If you can’t see the chart below, click here.
https://public.tableausoftware.com/javascripts/api/viz_v1.js
What they found from this data set is that educational attainment – the percentage of the population with a 4-year college degree – is the single most important factor when it comes to urban economic success. In fact, according to City Observatory, it accounts for 60% of the variation in per capita income across the metro areas listed above. That’s huge.
So even though people like Peter Thiel might be encouraging kids to drop out of College and start a company, having a well-educated population is a really important thing for cities. Actually, it’s the most important thing.
In it he talks about a “weirdness index” that he developed for CEOs for Cities that measured and ranked 50 American cities across 60 different behavioural indicators. San Francisco and Salt Lake City come out as the weirdest, and Portland ranked 11th out of 50. The most “normal” part of the US was the Midwest. Normal meaning behaviours that are most similar to the national average.
He then goes on to talk about weird as a competitive advantage. Here are a few snippets:
When it comes to economic success in today’s economy, the key is to differentiate yourself from your competitors. Harvard Business School’s Michael Porter counsels businesses that “competitive strategy is about being different.” And the late, great urbanist Jane Jacobs told us, “The greatest asset that a city can have is something that’s different from every other place.”
True entrepreneurship is about deviant behavior: starting a business that makes a product that no one else has thought of or thinks there’s a market for. Entrepreneurs and open-minded, experimental customers go hand-in-hand.
We shouldn’t do things just to be different, but we should never be dissuaded from trying something simply because it is different or would make us different from other places.
What this all comes down to is the simple fact that what is weird today, might very well become the norm tomorrow. But you need to be open enough to allow that to happen if you want to be the place that generates those news ideas.
Could you have imagined that selfies would become as ubiquitous as they have? That would have been pretty hard to predict. It used to be the case that people were afraid to use their real name on the internet. Now we share our entire life online, including our faces.
Image: Flickr
In it he talks about a “weirdness index” that he developed for CEOs for Cities that measured and ranked 50 American cities across 60 different behavioural indicators. San Francisco and Salt Lake City come out as the weirdest, and Portland ranked 11th out of 50. The most “normal” part of the US was the Midwest. Normal meaning behaviours that are most similar to the national average.
He then goes on to talk about weird as a competitive advantage. Here are a few snippets:
When it comes to economic success in today’s economy, the key is to differentiate yourself from your competitors. Harvard Business School’s Michael Porter counsels businesses that “competitive strategy is about being different.” And the late, great urbanist Jane Jacobs told us, “The greatest asset that a city can have is something that’s different from every other place.”
True entrepreneurship is about deviant behavior: starting a business that makes a product that no one else has thought of or thinks there’s a market for. Entrepreneurs and open-minded, experimental customers go hand-in-hand.
We shouldn’t do things just to be different, but we should never be dissuaded from trying something simply because it is different or would make us different from other places.
What this all comes down to is the simple fact that what is weird today, might very well become the norm tomorrow. But you need to be open enough to allow that to happen if you want to be the place that generates those news ideas.
Could you have imagined that selfies would become as ubiquitous as they have? That would have been pretty hard to predict. It used to be the case that people were afraid to use their real name on the internet. Now we share our entire life online, including our faces.
Image: Flickr
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