Earlier this week Richard Florida published on article on CityLab talking about the relationship between tech innovation (in cities) and inequality. Specifically, the article deals with the correlation between venture capital investment and a variety of factors, such as monthly housing costs, wage and income inequality, and so on.

The intent of the piece was to address the growing backlash against tech workers – in places like San Francisco – who have become the symbol for the growing gap between the rich and poor.

The strongest correlation appears to exist between venture capital investment and housing costs. As the amount of venture capital goes up, so do housing costs – which probably shouldn’t surprise you. The rich start outbidding the poor for housing. Note: The two outlying dots at the top right, in the graph below, are Silicon Valley and San Francisco.

But when it comes to inequality, the relationship isn’t so clear. For wage inequality, there seems to be a relationship. But for the broader income inequality measure, the relationship is fairly weak. Here’s the graph:

So this is not as black and white as it might seem. Regardless, Florida ends the piece with the following statement (that I think is spot on):

It’s time to stop pointing fingers and get on with the far more important task of harnessing the urban tech revolution to create a new urban middle class and a more inclusive urbanism—one in which many more workers and residents can participate, and one from which many more can benefit.

The answer is not to stop innovating. That would be counterproductive. We should be be encouraging innovation, but at the same time figuring out how best to harness it for society as a whole.

Tomorrow, I’ll touch a bit more on how we might go about doing that. I have a post planned that I think will tie in really nicely to this discussion. So stay tuned.

In the spirit of Startup Weekend, I thought it would be interesting to go back in time and pretend to pitch one of the most disruptive innovations of the 19th century: the automobile.

Typically pitches start by first outlining the problem. The idea is to make your audience aware of the pain point, so that they feel excited when you ultimately pitch your solution.

In the case of cars, the incumbent technology would have been horses. So I can imagine somebody standing up and talking about how horses are slow and how they drop stinky poo all over our city streets. And that the time has come for a revolution in personal mobility! Enough of this crap! :)

But while many of us probably can’t imagine a world without cars, try and put yourself in the shoes of somebody at the end of the 19th century who can’t imagine a world without horses. And then think about all the things we have subsequently done to make cars thrive:

• We paved roads and created networks of freeways.

• We invented rules of the road to ensure that people were operating these new devices properly.

• We created a licensing system to ensure that anybody who was operating a car was doing so relatively safely and following the rules that had been created.

• We created schools that taught people how to be better drivers.

• We started insuring cars for when accidents inevitably happened.

• We started having to accept fatal car accident and pedestrian deaths.

• We built networks of gas stations. As of 2004, there were 168,000 retail locations selling gas in the United States.

• We had to give over large land masses to parking. In fact, we reorganized entire cities so that the car could be better accommodated.

• And we setup government transportation divisions to make sure the needs of the car were always being met.

This is a long list of things we had to do to make cars possible and I’m sure there are many others that I have missed. Today, we all know how disruptive cars have been and we’re certainly questioning many of the things we have done. But we also accept this list as being largely normative.

However, before they were the norm, they were insurmountable challenges. How will we teach everyone how to drive these new cars? How will we minimize accidents? How will we make it easy for people to refuel their cars? Where will people store them when they’re not using them?

There were a lot of moving parts to figure out. 

Which is why people like Paul Graham have argued that the best ideas almost have to live in your unconscious mind. Because your conscious mind would simply reject them as viable options as soon as you started thinking about all the required moving parts. I guess that’s why they say there’s a very fine line between crazy and brilliant.

Image: Benz Velo

Earlier this week Richard Florida published on article on CityLab talking about the relationship between tech innovation (in cities) and inequality. Specifically, the article deals with the correlation between venture capital investment and a variety of factors, such as monthly housing costs, wage and income inequality, and so on.

The intent of the piece was to address the growing backlash against tech workers – in places like San Francisco – who have become the symbol for the growing gap between the rich and poor.

The strongest correlation appears to exist between venture capital investment and housing costs. As the amount of venture capital goes up, so do housing costs – which probably shouldn’t surprise you. The rich start outbidding the poor for housing. Note: The two outlying dots at the top right, in the graph below, are Silicon Valley and San Francisco.

But when it comes to inequality, the relationship isn’t so clear. For wage inequality, there seems to be a relationship. But for the broader income inequality measure, the relationship is fairly weak. Here’s the graph:

So this is not as black and white as it might seem. Regardless, Florida ends the piece with the following statement (that I think is spot on):

It’s time to stop pointing fingers and get on with the far more important task of harnessing the urban tech revolution to create a new urban middle class and a more inclusive urbanism—one in which many more workers and residents can participate, and one from which many more can benefit.

The answer is not to stop innovating. That would be counterproductive. We should be be encouraging innovation, but at the same time figuring out how best to harness it for society as a whole.

Tomorrow, I’ll touch a bit more on how we might go about doing that. I have a post planned that I think will tie in really nicely to this discussion. So stay tuned.

In the spirit of Startup Weekend, I thought it would be interesting to go back in time and pretend to pitch one of the most disruptive innovations of the 19th century: the automobile.

Typically pitches start by first outlining the problem. The idea is to make your audience aware of the pain point, so that they feel excited when you ultimately pitch your solution.

In the case of cars, the incumbent technology would have been horses. So I can imagine somebody standing up and talking about how horses are slow and how they drop stinky poo all over our city streets. And that the time has come for a revolution in personal mobility! Enough of this crap! :)

But while many of us probably can’t imagine a world without cars, try and put yourself in the shoes of somebody at the end of the 19th century who can’t imagine a world without horses. And then think about all the things we have subsequently done to make cars thrive:

• We paved roads and created networks of freeways.

• We invented rules of the road to ensure that people were operating these new devices properly.

• We created a licensing system to ensure that anybody who was operating a car was doing so relatively safely and following the rules that had been created.

• We created schools that taught people how to be better drivers.

• We started insuring cars for when accidents inevitably happened.

• We started having to accept fatal car accident and pedestrian deaths.

• We built networks of gas stations. As of 2004, there were 168,000 retail locations selling gas in the United States.

• We had to give over large land masses to parking. In fact, we reorganized entire cities so that the car could be better accommodated.

• And we setup government transportation divisions to make sure the needs of the car were always being met.

This is a long list of things we had to do to make cars possible and I’m sure there are many others that I have missed. Today, we all know how disruptive cars have been and we’re certainly questioning many of the things we have done. But we also accept this list as being largely normative.

However, before they were the norm, they were insurmountable challenges. How will we teach everyone how to drive these new cars? How will we minimize accidents? How will we make it easy for people to refuel their cars? Where will people store them when they’re not using them?

There were a lot of moving parts to figure out. 

Which is why people like Paul Graham have argued that the best ideas almost have to live in your unconscious mind. Because your conscious mind would simply reject them as viable options as soon as you started thinking about all the required moving parts. I guess that’s why they say there’s a very fine line between crazy and brilliant.

Image: Benz Velo