On Jane Jacobs

Here's my column from this weekend's Globe and Mail.

When Jane Jacobs died two years ago, she was working on two books. One was to be called A Short Biography of the Human Race and was going to refine the ideas she had begun to develop in her short, fierce book of warning essays, Dark Age Ahead. I was very much looking forward to what she had to say about a possible future that she viewed with more hope and optimism than her last published work would lead people to believe.

Her other project was equally ambitious. Uncovering the New Economics was to be an anthology of her thinking on economic life. She was busy choosing excerpts from a lifetime of writing and thinking on the nature of economies and cities, seeking through hindsight the coherence in insights she described as "accidental" (but that seemed to me anything but).

Rent Crisis

According to this new study by the Harvard's Center for Housing Studies, the US housing crisis and mortgage market meltdown is having serious impact on rental housing as well (pointer via Planetizen).

The current mortgage turmoil reaches deep into rental markets.  New research on rental housing market dynamics from Harvard University’s Joint Center for Housing Studies finds that the current housing debacle not only adds to the number of households competing for low-cost rentals but also threatens renters living in foreclosed properties with sudden eviction. 

Why Do So Few Women Work in New York ... ?

That's the title of an intriguing new study by my former Carnegie Mellon colleague, Lowell Taylor along with Dan Black and Natalia Kolesnikova (h/t: Allison Kemper). (Black and Taylor collaborated with Gary Gates on the "gay index" studies). They find "an extremely large variation in female labor supply across metropolitan areas in the United States." Looking at employment trends of married, white, non-Hispanic women ages 25-55 with a high school level education, they show that more than three-quarters (79 percent) of such women are employed in Minneapolis versus less than half (49 percent) in New York.  And they find a major reason to be the cost of commuting.

Tyler Cowen counters that amenities and density would seem to matter:

"With all due respect to The Walker Art Center, if I wanted to be a kept woman I would not start my quest in Minneapolis.  High density, as you find in Manhattan, means lots of fun things to do in your copious free time as a kept woman and also a higher degree of income inequality and thus the hope of snaring a rich man.  There's a reason why they didn't set Sex in the City in Paramus and most of the women there will be working even when the traffic gets worse." 

The authors clearly know a lot about amenities and density. Amenities were at the center of their story about why gay men live in San Francisco. It was a over discussion of amenities and cities afterall that Gates and I met and decided to collaborate. And Kolesnikova took my PhD seminar on said while a doctoral student at CMU. 

Seems to me that Columbia University's Lena Edlund's work may also bear here. Edlund, puzzling over the consistent pattern where single women outnumber single me in large cities world-wide, suggests a main reason may be that men essentially have to "pay" women more for marriage in these locations - the costs of having and raising kids.  The study does look at the effects of highly educated power couples and concludes that such arguments don't really help explain labor force participation of married women varies so widely by location.

The extent of the divergence is indeed very interesting, and also consistent with the general sorting of the population on economic and demographic as well as psychological dimensions.

Your thoughts?

Lagging Infrastructure

John Gapper in the Financial Times (pointer from Mark Thoma):

 If anyone doubts the problems of US infrastructure, I suggest he or she take a flight to John F. Kennedy airport (braving the landing delay), ride a taxi on the pot-holed and congested Brooklyn-Queens Expressway and try to make a mobile phone call en route.

That should settle it, particularly for those who have experienced smooth flights, train rides and road travel, and speedy communications networks in, say, Beijing, Paris or Abu Dhabi recently. The gulf in public and private infrastructure is, to put it mildly, alarming for US competitiveness.

You might have expected that investing in US infrastructure would be a hot political topic this year. Well, no. Hillary Clinton spent the final week of her Indiana campaign standing on the back of a pick-up truck arguing for a temporary suspension of the “gas tax”, the fuel duty that pays for highways. ... Mrs Clinton suggested cutting its source of funds (which she claimed could be made up by a tax on oil companies). It was more important to give Americans a summer break from $4-per-gallon petrol.

At times I wonder whether the world’s biggest economy has the will to solve its challenges or will end up wandering self-indulgently into the minor economic leagues. I expect it will get serious when the crisis is too blatant to ignore...

I could not agree more: having just taken that JFK drive - two and and half traffic jammed hours and almost missed flight And then what about the inside of Kennedy Airport -the security line wrapped around the entire first floor;  not a seat to be had near our gate - people lined up everywhere like cattle.

The US infrastructure problem is a huge drain on competitiveness. In Washington DC, our electric power would go our every single thunderstorm; we were ready to buy a generator, except our neighborhood had no natural gas running it. I mention this in Toronto, and my colleagues just look at me with astonishment.

Compounding this is the sprawled out spatial structure of US suburbia, and the lack of adequate rail transport in many places.  Rising fuel costs will hit hard at many working families; and rising time costs of commuting is a huge drain on productivity. US infrastructure and suburbia, which provided so many advantages in the age of fordist industry, now look to be looming competitiveness issues.

Location and R&D

Location as it relates to research and development increasingly matters - although you can't ignore talent in other places.  Find out why and how this affects BlackBerry (aka CrackBerry) maker - Research In Motion. 

Health and the 'Hood

Where you live shapes health, as well as economic and social, outcomes according to this new study (via Freakonomics):

people who live near an abundance of fast-food restaurants and convenience stores compared to grocery stores and produce vendors, have a significantly higher prevalence of obesity and diabetes regardless of individual or community income.

Proximity Matters

Google CEO Eric Schmidt tells Business Week (via CEOs for Cities).

A problem that we face now is that we have people in multiple sites. It's a problem that everybody faces, but we're going to face it bad. We have, like, 50 locations ... The best programming team is a "telephone call," which is two people, you and I, programming together. The second-best programming team is, everybody fits into a single room. All other variants are bad.

Lumpy World

Ryan Avent writes:

A while back, Richard Florida took to the Wall Street Journal to explain why he thought that mega-regions (the Washington-Boston corridor, for instance) were relevant units for economic analysis and policy making. Paul Krugman disagreed ...  I pointed out, at the time, that this contradicted Krugman’s own (excellent) work on economic geography ...

Well, today I have additional support for my argument, courtesy of … Paul Krugman:

Our conversation concerned an empirical problem with the Eaton-Kortum model of international trade, which was the basis of the big lecture.

E-K attempts to explain an empirical relationship known as the gravity equation, which says that the volume of trade between any two countries is proportional to the product of their GDPs, and inversely related to the distance between them. It’s an elegant model — I wish I’d come up with it, which is the highest form of praise — but has one implication that just isn’t true: it says that a country like China should export a wider range of products to a small country, like Ecuador, than it does to a big country, like the US. Why? Because Ecuador, being small, probably has fewer industries that are cost-competitive with Chinese exports. In fact, however, China seems to export a wider range of stuff to bigger economies.

A possible explanation is the lumpiness of transport costs: there are more container ships heading from China to US ports than to Ecuadorian ports, so that it’s worth sending over a bigger range of stuff. It’s like the reason there are fewer food choices in supermarkets on St. Croix (where we spent our last vacation) than in New Jersey — there’s just one boat with groceries coming over every once in a while, so you can’t keep, um, arugula in stock.

In other words, distance absolutely matters. What’s more, infrastructural connections really matter. If the Northeastern corridor is tightly linked by road and rail, then trade volumes between places within that corridor are likely to exceed those predicted by a simple gravity model (which itself should predict that distance is a good indicator of trade volumes).

The Hour/ The Agenda

Here's a clip from my appearance on CBC's The Hour.

Click here for a clip of me on The Agenda (h/t: Matt).

The Creative Corporation

In every single speech I make, I say Toyota, not Google or Apple, is the single best example of the creative company.  Nearly 15 years ago, I wrote a book on this with Martin Kenney. James Surowiecki makes the case ever more succinctly in his latest New Yorker column:

But if Toyota doesn’t look like an innovative company it’s only because our definition of innovation—cool new products and technological breakthroughs, by Steve Jobs-like visionaries—is far too narrow. Toyota’s innovations, by contrast, have focussed on process rather than on product, on the factory floor rather than on the showroom. That has made those innovations hard to see. But it hasn’t made them any less powerful.

At the core of the company’s success is the Toyota Production System, which took shape in the years after the Second World War, when Japan was literally rebuilding itself, and capital and equipment were hard to come by. A Toyota engineer named Taiichi Ohno turned necessity into virtue, coming up with a system to get as much as possible out of every part, every machine, and every worker. The principles were simple, even obvious—do away with waste, have parts arrive precisely when workers need them, fix problems as soon as they arise. And they weren’t even entirely new—Ohno himself cited Henry Ford and American supermarkets as inspirations. But what Toyota has done, better than any other manufacturing company, is turn principle into practice. In some cases, it has done so with inventions, like the andon cord, which any worker can pull to stop the assembly line if he notices a problem, or kanban, a card system that allows workers to signal when new parts are needed. In other cases, it has done so by reorganizing factory floors and workspaces in order to allow for a freer and easier flow of parts and products. Most innovation focusses on what gets made. Toyota reinvented how things got made, which enabled it to build cars faster and with less labor than American companies.

But there’s an enigma to the Toyota Production System: although the system has been widely copied, Toyota has kept its edge over its competitors. Toyota opens its facilities to tours, and even embarked on a joint venture with G.M. designed, in part, to help G.M. improve its own production system. Over the years, more than three thousand books and articles have analyzed how the company works, and things like andon systems are now common sights on factory floors. The diffusion of Toyota’s concepts has had a real effect; the auto industry as a whole is far more productive than it used to be. So how has Toyota stayed ahead of the pack?

The answer has a lot to do with another distinctive element of Toyota’s approach: defining innovation as an incremental process, in which the goal is not to make huge, sudden leaps but, rather, to make things better on a daily basis. (The principle is often known by its Japanese name, kaizen—continuous improvement.) Instead of trying to throw long touchdown passes, as it were, Toyota moves down the field by means of short and steady gains. And so it rejects the idea that innovation is the province of an elect few; instead, it’s taken to be an everyday task for which everyone is responsible. According to Matthew E. May, the author of a book about the company called “The Elegant Solution,” Toyota implements a million new ideas a year, and most of them come from ordinary workers. (Japanese companies get a hundred times as many suggestions from their workers as U.S. companies do.) Most of these ideas are small—making parts on a shelf easier to reach, say—and not all of them work. But cumulatively, every day, Toyota knows a little more, and does things a little

They’re also phenomenally difficult to duplicate. In part, this is because most companies are still organized in a very top-down manner, and have a hard time handing responsibility to front-line workers. But it’s also because the fundamental ethos of kaizen—slow and steady improvement—runs counter to the way that most companies think about change. Corporations hope that the right concept will turn things around overnight. This is what you might call the crash-diet approach: starve yourself for a few days and you’ll be thin for life. The Toyota approach is more like a regular, sustained diet—less immediately dramatic but, as everyone knows, much harder to sustain. In the nineteen-nineties, a McKinsey study of companies that had put quality-improvement programs in place found that two-thirds abandoned them as failures. Toyota’s innovative methods may seem mundane, but their sheer relentlessness defeats many companies. That’s why Toyota can afford to hide in plain sight: it knows the system is easy to understand but hard to follow.

OK, Mission Control ...

David Sirota does a very nice job summarizing what launching a book feels like (via Matt Yglesias).

I received a copy of my new book ...in the mail today from my publisher ... Opening the package was half anti-climactic, and half frightening ... in three weeks, it is going to be out there for the world to read. That's a little scary, because to date, almost nobody has read it, so I really have no idea what to expect as a reaction ... And this says nothing of the fear of how the book will perform. That is the great unknown that haunts every writer who wants to continue to try to eke out a living as a writer - every project is based on your last performance. How well your current work does in the marketplace often dictates whether you will be given another opportunity to write in the future (this is why it is so important to buy books from writers you like, and buy magazines that you support - your purchase is a way to make sure that those writers and publications continue to produce in the future).

From my first book ... I've learned to get used to some of these feelings - but I'm told by more seasoned writers that you never really get used to it...ever. Writing - and media in general (especially progressive media) - is a very tough business. It requires regular 16 hour days to scratch and claw into the debate. This book represents 2 years of those 16 hour days - so I guess it's natural to feel a little nervous ...

Personally, I find the instantaneous, uber-connected Internet world compounds this massively; plus the fact that growing numbers of us are simultaneously launching books and doing media and touring in multiple markets worldwide. I figure since writing is takes so much time and effort, it makes a great deal of sense to go out there and promote books. I actually find it somewhat enjoyable and relatively easy to talk to the media about my ideas - compared to writing, and aside from Colbert , that is. The two biggest issues I grapple with are:  when and how to respond to critics (do I respond to all of them, some of them, sequentially, as a group?) and how best to use this blog to promote conversation around my books without seeming - well -self-absorbed and heavy-handed.

Your thoughts?