Why Cities Grow

Why do communities or regional areas in the United States grow faster than others, and why are incomes, lower or higher, dictated by location, and why are lifestyle standards and choices similar depending on regional locations? Michael Storper’s (2010) report “Why Does a City Grow? Specialisation, Human Capital or Institutions?” is an examination of the economic disparities between regional locations. Based on the research of others, much of the paper is used to argue and discuss why these research methods and findings are flawed. The report provides a comprehensive analysis of the determinants for economic profit or poverty in cities across America and references are made to Europe as well. The topic is relatable and the overall direction of the discussion is well laid out. It is an interesting discussion and will cause the reader to take a closer look at his or her own community to understand how its economic culture developed based on some of the ideas in Storper’s report.

A discussion ensues on specialization being one of the determinations for economic growth in a region. Storper (2010) starts out with a statement about his title, “why cities grow,” however the answer is inconclusive (p. 2027). The term is not specifically defined though as the report is digested, the meaning of specialization is derived. I believe it is those unexplained circumstances and happenstances which make a significant impact on the economic health and growth of a region or community. For example, in a 1990’s study of three-thousand counties in the United States, four of these counties had a significant rise in income, and it became simple to put two and two together and ascertain that they were in the San Francisco area and the technology explosion resulted in a new affluent community (Storper, 2010). There is no credible data to answer why this occurred in these specific San Francisco counties. Thus begins the dilemma of sorting out why this happened, and can it be transported to other regions?

When a region has a special skill or product that cannot be easily accessed somewhere else it results in a stable economy. Storper (2010) noted that a region’s stability is more likely to stay that way if it is based on knowledge, skill, and innovation (p. 2028). The argument is solid and makes sense. I considered that Detroit is an example of a city that may be more economically distressed than others because it lacks businesses or people that can produce enough wealth to sustain it. When the auto industry was located there, as well as the former music label Motown, this would be considered the specialization aspect Storper is referring to. Since Detroit was not able to sustain the auto industry and Motown moved its headquarters, and these industries were not replaced by something else, it became economically distressed.

The discussion about specialization and its impact was convincing and relatable. The sources and examples used to back up the findings were conclusive. For example, specialization extended beyond the creation of skills or knowledge, but also involved natural causes (Storper, 2010) such as land and water-based opportunities that could result in farming communities, and transportation hubs, boating, fishing, and recreation income goals could result. The suggestion that additional variables could be used to help analyze economic deficiencies was in line with how this could possibly help other communities grow or be more proactive in avoiding a downturn. In the discussion on human capita, Storper (2010) notes the following: “To account for intercity income differences, we would want to know why some expensive cities do better at attracting skilled labor than others and what triggers the divide between more- and less-skilled cities” (p. 2034). An added explanation is that old money follows old money and once the economic structure is determined it is difficult to copy the formula in other geographic locations. However, a remedy for this is that the weaker cities should aggressively appeal to people and businesses located elsewhere that it believes will improve their economy by making an attractive offer to them to relocate.

Reading the section on human capital and why people are attracted to certain areas, reminds me of real estate advertisements which now list a walk score. This refers to the proximity of the nearest restaurants, grocery stores, and general shopping districts, and schools. Areas with the highest walk score are usually the areas for which real estate is the most expensive. I am sure this is not an American phenomenon but is a distinction that can be found almost anywhere in the world. Therefore, ingrained human behaviors can also be explained as a specialization. This is a topic that was not covered in this discussion.

How people respond to different stimuli and circumstances will always be somewhat of a mystery. Understanding that human behavior dictates a component of specialization, Storper notes that researchers cannot figure out if specialization dictates human behavior, or if human behavior dictates specialization (Storper, 2010); however, this observance does not necessarily need to be a discussion point because I find that both of these observations are legitimate. People initially went where the opportunities were, and lifestyle changes and choices dictated who stayed and who left. Some of that is similar today. Storper’s argument about how institutions and specialization complement one another is a great one (Storper, 2010). I agree with this statement, and it does not matter which one comes first.

The United States Post Office is an example of government offices impacting specialization because of the thousands of employees that work at the post offices across the country. This report explains that specialization includes government offices, but also the political involvement of people (Storper, 2010). If the constituents are politically savvy then this can also influence how wealthy a region is. I think the article does a good job of explaining the complexities of how institutions affect economic growth within regions, and that political and personal connections and influences are ingrained in institutional behavior. This is played out in how local government offices at the city level can yield a good deal of influence on communities; such as who is approved for certain business licenses and who is not. This is a good example of interpersonal relations between the government and private citizens. Though he did not mention it, churches should also be included as powerful influences within a community especially the Roman Catholic Church whose imprint is felt all over the world.

The report was well written and it is not redundant as many lengthy reports are. The examples and the diagrams help to visualize the problem and see its impact on different cities around the world. After reading it, the complexity of how to change the economic structures of a region is obvious, especially when the history, culture, and philosophy of a community have been ingrained over long periods of time. Storper (2010) suggested investment in a study that would, “be able to estimate the sources for growth over a wide panel of cities for different time-periods. High-quality, sufficiently disaggregated, data on the nature of specialization, human capital and institutions would be required, as well as those for a wide set of controls” (p. 2046). This is an excellent solution and could achieve a model on how to stimulate economic growth. I believe this is the overall purpose of this report: to uncover ways to equalize economic growth and wealth. I think the missing element of the discussion is how human behavior can also determine a region’s wealth or lack of it. I think it is a factor that is complex but should be part of any additional studies on the topic.

The author’s writing for me is unbiased which helps lend to the credibility of the report. The information also supported the abstract statement regarding what drives the development of the world’s cities. Do cities flourish because oil or gold is discovered? Or is it because a special skill is developed or accidentally stumbled on? Or is it just that the city is logistically located, or if institutions influence economic growth? I believe that all of the above are true. The report strategically points the reader to this conclusion, but it is a viable one. 

Reference

Storper, M. (2010). Why Does a City Grow? Specialisation, Human Capital or Institutions. Urban Studies, 2027-2050.