The Martin Prosperity Institute here in Toronto recently published an interesting report called The Geography of the Global Super-Rich.
What they did was use the Forbes 2015 Billionaire List to chart billionaires and billionaire wealth by location and by industry. They also looked at the wealth gap in each location and whether the wealth was self-made or inherited.
A correlation analysis was also done to see what key variables – such as population, density, economic output, global city standing, VC investment, and so on – were positively correlated with a greater concentration of super rich people.
There are 1,826 billionaires across the world according to Forbes. The researchers were able to match 99% of them to a specific metro area / primary residence.
Here are the top 20 metro areas in terms of the number of billionaires:
Look at Miami at #9.
I suspect that this may surprise some of you. But Miami has grown into a significant global city. As one of my friends from Miami likes to tell me: “The best thing about Miami is that it’s a Latin American city that’s so close to the United States.”
Here are the top 20 metro areas in terms of total billionaire wealth:
A bunch of changes on this list because of extremely wealthly people and families in places like Bentonville (Arkansas) and Omaha.
One of the conclusions of the report is that the size of the city generally matters:
“The geography of the super-rich is a function of larger cities. Both the number of billionaires and their net worth are positively associated with the population of global cities, with correlations of 0.56 for the number of billionaires and 0.44 to their net worth.”
Here is a chart comparing population to the number of billionaires:
Cities such as New York, Moscow, and Hong kong, which sit far above the blue line, have more billionaires than their population size would predict.
Here is a similar chart comparing venture capital investment to the number of billionaires:
Once again, there is a positive association.
Finally, here are a two charts that show which industries have produced the most billionaires:
If you’re interested in this study, you can download the full report here. All of the charts were sourced from the report.
Canada is a resource rich country. And one of the things that commonly happens to countries with a lot of resources is that they begin to myopically focus on the immediate gains from resources at the expense of long term innovation and economic development.
This is known as the “resource curse.”
The Martin Prosperity Institute here in Toronto recently published a report that looks at this exact topic: Canada’s urban competitiveness through the lenses of its resource economy and its knowledge economy. In the end, Richard Florida and Greg Spencer conclude that two can and should work together, but that we need to stop neglecting our cities:
“The oil and gas industry is not necessarily a constraint on the creative economy, but in the past decade or so it has come to dominate thinking around economic development policy-making. It is time to use the resources from the energy economy to build a more secure future as an urban knowledge economy. We can also use talent and technology to deepen and expand the resource economy.”
And one of their key recommendation is something I have argued for many times here on Architect This City:
“A New Federalism for Cities: It is time to give cities the taxing and spending powers they require. Cities must be given more control over their own destinies if they are to prosper in the 21st century.”
Now, here are a few interesting charts from the report.
This first one looks at the relationship between a city’s population and its creativity levels. The two are positively correlated, which means that, in this context, bigger is better.
This second one splits Canada in half – east and west – and then looks at how average income levels are affected by creativity levels (the knowledge economy). Here we see that in eastern cities, income levels are positively correlated with creativity levels. But in western cities, changing creativity levels have almost no impact on income levels.
Finally, this third chart compares the relationship between oil and gas employment (LQ = location quotient) and average income levels. What it finds is that income levels and oil and gas employment are positively correlated in the west, but there’s almost no relationship in eastern cities.
The way to read this chart is to think of the LQ as the employment multiple relative to the national average. So for example, a LQ = 10 means that the oil and gas employment levels are 10 times the national average. As you probably guessed, the pink dot way out on the right is Fort McMurray.
If you’d like to read the entire report, you can do that here. I hope that our new Prime Minister, Justin Trudeau, will read reports like this and spend more of his efforts investing in our knowledge economy – which means investing in our cities.
The Martin Prosperity Institute here in Toronto just released a new research study called Segregated City: The Geography of Economic Segregation in America’s Metros.
The report looks at the physical sorting and separation of advantaged and disadvantaged groups within cities. And it did so across 70,000+ Census tracts in the US and in terms of 3 different dimensions: income, education, and occupation.
Here are the most segregated “large metros” in the US:
Table Source: MPI
And here are some of their broader findings – taken verbatim from page 9 of the study (click here for the full report):
Economic segregation is positively associated with population size and density. It is also positively correlated to two other sets of factors that follow from metro size and density: how people commute to work and the breakdown of liberal versus conservative voters.
Economic segregation tends to be more intensive in high-tech, knowledge-based metros. It is positively correlated with high-tech industry, the creative class share of the workforce, and the share of college grads. In addition, it is associated with two key indicators of diversity, the share of the population that is gay or foreign-born, which tend to coincide with larger, denser and more knowledge-based metros.
Economic segregation is connected to the overall affluence of metros, with positive correlations to average metro wages, income, and economic output per capita.
Race factors in as well. Economic segregation is positively associated with the share of population that is black, Latino, or Asian, and negatively associated with the share that is white.
Economic segregation is associated with income inequality and even more so than with wage inequality. Its effects appear to compound those of economic inequality and may well be more socially and economically deleterious than inequality alone.
The research team also looked at how Canada’s 3 largest metros – Toronto, Montreal, and Vancouver – compare to those in the US in terms of segregation.
The finding was that Canadian cities are overall less segregated than US cities, but that it should still be considered an area of concern. The most segregated of Canada’s 3 largest metros was found to be Montreal.
Image Source: MPI
My view is that our economy is going through a profound shift right now. We’re transitioning from the industrial age to the information age. And in its wake, we’re seeing a number of disruptions, one of which appears to be rising inequality and segregation.
That’s not to say that I think this transition is a bad thing (I don’t think it is), but I do think we should be carefully considering and designing our future.