The other day I got this through my friend Jan, who just recently finished his PhD. This is a video animation of a presentation of Steven Johnson, based on his new book Where Good Ideas Come From: The Natural History of Innovation.

He explains the idea of how meeting places where such a great place for innovation, back in the day (and today), and all the time it took to develop ideas. For sure, there were people who talk more, and people who would listen more. But all good benefited. You could go to the table that shares your interests, once in a while. I think that is the same principle in twitter.

I have to admit that my twitter log, (which once in a while I copy in a doc for easier findings), help me a lot to get ideas to include in papers. Therefore I’m very grateful to this tool. It comes a lot of inspiration, and try to keep the people I follow to a minimum, to restrict it for my work. (I don’t know how people can follow more than 150 people, no offense, but there is an optimization point.) Anyways, the thing is that twitter can help to exchange ideas, unfortunately it does not leave too much room for discussion.

I love these animations. Another good one is David Harvey’s (if you don’t know him, is the most quoted geographer), “The Crisis of Capitalism”.

Before I start some qualitative research in the area I have to study the background. I always like to pay special attention to history. In the outstanding libraries here I have found some very interesting material, some of them quite old. I have a pearl to share.

This is from “The prospects of Vallejo; or, Evidences that Vallejo will become a great city. A re-publication of a series of articles first printed in the Vallejo evening chronicle, from March to July 1871.”  It came with a nice map, and when they gave it to me, the librarian told me: “careful, the map is falling apart”.

To put in context, the leaders of Vallejo at the time, were explaining the reasons why Vallejo was going to become a big metropolis, probably among the top 3 cities in California (being at that time the city of San Francisco their main competitor, which even though it had the 25% of the State population and the 50% of its wealth, it seemed to show some weaknesses related to economic geography issues). The articles are actually really good. In such a fashion that I think anyone could be convinced. The main reason they argue was that the train arrived to the city (direct connection from East Coast to West Coast), and that their harbour was starting to take off. During the various articles they mix the best skills of real estate, politicians, academics and marketing fellows.  Their main point was to attract capital for their harbour. Probably these guys had all the investments in their life there.

The interesting thing is the different language. Something that now would not look politically correct. Their thesis all across the articles is: 1) “the intelligent men” look for the most profitable places for their enterprises, 2) They go where they are, and 3) That’s what creates economic development (me paraphrasing).

In the following snippet, (that I think I’m the first to transcribe on the internet) they quote the magnate Horace Greeley, and then they present a rebuttal:

Horace Greeley on San Francisco

At a dinner given in New York on the 13th of October, 1869, to an excursion party of the California Pioneers, Horace Greeley having been called on to respond to the toast of “New York and California,” in the course of his remarks said:

When we speak of the present or the expected greatness of these two remarkable cities, New York and San Francisco, I bet that it will ever be remembered that great cities are the expression of great ideas that they grow out of genius men. Alexander gave his name to the city he formed, and that city bears his name and is memorable to this day. Rome is mighty because of the Senate and people that made her high and proud position – made her the Eternal City; eternal because the genius that created her still lingers over her hills, still is reflected in the sunshine that gleams on her palaces; and thus the shadows of ancient greatness recall to our minds memories and associations that make us nobler that we otherwise would be [Applause.]   If these two cities are to be great, they will be great because of the men who have still the genius to preserve and extend the advantages they have won. Had there been no De Witt Clinton, and had there been no Erie Canal, in vain would have been the central position and commercial advantages of this city. She was not the first city of America until her great men gave artificial extension and development to those advantages, and thereby fixed on her, I think, for centuries, certainly for the present age, the honored advantages of being the emporium of the Western World. If she is to maintain this position, she will do it because she will do it because she will have great men continually able to keep her in advance. As she has seized the canal, telegraph and railroad, and pressed them into her service, so she must be ready, as new inventions are presented, to seize them and turn them to her advantage. As it is with New York so will it be with San Francisco. Les us not believe that because this city has quadrupled in population in the last half century that it is in the order of things and must continue. She will maintain her position, for her great men have the power to plan new enterprises, and her great financiers shall second those efforts, and continue to keep her at the head of the commercial world. So with San Francisco. The great railroad recently achieved would never have been if there had not been men in that city who saw capacities and perceived opportunities and possibilities which the multitude did not see.

Mr. Greeley is wrong in supposing that the construction of the railroad is due to San Francisco; he is wrong in supposing that the danger to which that city is exposed (he refers to it, evidently, though he does not mention it,) could be averted by the genius of the business men; and he is wrong again in assuming that genius makes cities. It is the good site that attracts and rewards genius, and stimulates enterprise.

A couple of weeks ago I found at the Copenhagen airport the magazine Focus in Denmark, I’ve seen it before but this time I read it while waiting. The article ATTRACTING FOREIGN STUDENTS seemed quite interesting to me. The basic idea you can learn is that if you’re a student around the world you should consider Denmark, if you’re already in Denmark, you should consider stay. If you’re a Dane, this is quite hard to listen (It would be hard for me to read this if a Spanish official would say it)

“We want to be a top-class international university and it is not the passport number that decides, but what our students have between their ears. We must attract the best, and if it is others than Danes, then it is they we want to have. But internationalisation is not a separate point in our strategy – it is incorporated into everything we do,” says Lykke Friis, prorector of the University of Copenhagen.

So, if you’re a Dane, you know that you’re not competing against the other Dane down the street or the other Dane across the bridge, but against all the world.

Of course things are not that clear cut neither the life for newcomers (especially in the beginning) is so rosy, but anyways I’m glad that I’m here among the Danes.

p.s. Yesterday I went and vote in the local and regional elections. As an EU citizen we’re allowed to do that, no matter where you’re in the EU. However, for the national elections we can only vote in our respective countries.

In my last post I said I was going to the Festival of Tordenskjold. Here is a little more about who was this guy Tordenskiold. I have to say I had a great weekend. I found it very interesting because I have been following the preparation for several days. I have talked to over 40 people and learn many things about their networks and how they work. I aim at publishing the results if you’re interested.
I calculated myself in the three days and I think there were 35.000 visitors, but I don’t have the official data. But I know there were around 1000 volunteers, the majority of them dressed for the occasion in 18th century clothes.
Here is me and great Tordenskjold, I (and my wife, taken the picture) were dressed as peasants.

Tordenskjold and me at the end of Friday's play

Tordenskjold and me at the end of Friday's play

Here are more pictures of the festival. In photo doesn’t look that big, but the big boat a replica of the time, was really impressive. At least for a non-ocean guy like me.

Today, my native country Spain, officially reaches for the first time in its history the 4 Million figure of unemployed.  This is a devastating number of people, no matter if this is just a psychological number or if is correctly measured.

I remember in the early 90’s when it reached the 3 million mark. It was a shock for the nation, it was a pretty scary moment. I was in high-school so it did not affect me directly but I knew that the family business was going through a hard time.

Now we reach 4 million. There has been a lot of immigration increasing the total population, so maybe it’s around the same percentage we had, although it’s hard to measure as methodologies have changed.

Spain until recently has been admired in Europe. It was seen as one of the fastest growing and most dynamic economies. Now it’s becoming the ugly duck of western Europe. For some analysts might even be the canary in the coalmine of deflation (perhaps a little exaggerated article for my taste). Reading the commentaries in the Spanish newspapers, now it’s all critics for the Government, which I positioned in the political right (with a little flavor of the left). Everyone is mad at Zapatero now. Some are saying go left, other go right.

For my part, instead of criticizing I would give to suggest two concrete policy suggestions for Spain. I might be wrong, many times I am, but this is what I feel today:
1. Try to adapt some type of flexicurity model. The concept was originated here in Denmark, and after living here almost 2 years I have been convinced of the wonders of it. Of course you can’t “cut & paste” it, you have to adapt it to the Spanish socioeconomic background, but I think it should be worth to explore the possibility of trying it. In fact I wish some researchers or policy makers could come here to my University where they have the Centre for Labour Market Research at Aalborg University (CARMA). I’m convinced that Spain needs some flexibility for the labour market. As I said, I come from a family who has been involved in the creation of several businesses. I’m not saying we’re the perfect firms, but we have created overtime good services for the people and employment. We have also suffered tremendously when the businesses were not doing good. Some times it came for the difficult to hire someone or fire someone. In Spain, compared to other countries it’s quite hard to layout someone, even with more than accepted reasons in other countries. Another leg of the flexicurity tripod, it’s the embarrassing the Spanish official “Oficina de Empleo”, which it’s just a bureaucrat machine, that in many cases has very nice civil servants, but it provides the worst service for everyone. They should be able to find employment in an effective way. I wonder what kind of incentives should be given to the ones running the show. Also it’s important that the unemployed (especially the recently) received economic support until they find another job. I also find useful that the employed buy some type of subsidised insurance in case they loose their job (in Denmark this was used to do through the unions).

2. Incentive the renting in the housing market. In Spain we have the highest rate of home owners in the world. In order to do it, for some this could be very unpopular measures such as taxing empty housing in bigger cities (specially among banks, ha!), besides other measures. The other possibility of course (very reasonable too) it’s to let the banks and housing developers to bankrupt so the market stabilizes. That means not a single cent for any type of corporate bailouts. Anyways, helping to boost the housing market with rent could cover several possibilities: a) People would be more flexible to move to find a job, b) Speculation would decrease which highly has affected the economy-employment c) many people could save their homes upon renting a place they can’t afford (for that it would be more than helpful to have some agreements with the bank (giving the mortgage) and government as some type of collateral), d) many young people could start their own families and this would revert in the economy. I talked a little bit more about this in a past post also talking about housing in Spain and America.

It’s always nice to stop by Creative Class by the Richard Florida squad. Following links I hit the “How the Crash Will Reshape America” published in the Atlantic in the March 2009 issue.

As I have said sometimes, I like Florida. It seems to be kind of funny that all academics related to the discipline of economic geography say “Florida’s ideas are good, BUT…” It seems that they have to say that in order to show their academic credentials.
So, I of course have to say the same. However, for this last document I admit I have very little objection or none.
He clearly explains the change of economic paradigms and how the American cities have to evolve. He quotes Schumpeter, Jacobs, Romer, Glaeser, Lucas, Krugman among some of the key fellows. His final proposals to change the housing market towards a more renting instead of owning are bold. Which is exactly what the U.S., and great part of the world needs now. Not so much Denmark, but this will be especially fit for my home country Spain.

The solution begins with the removal of homeownership from its long-privileged place at the center of the U.S. economy. Substantial incentives for homeownership (from tax breaks to artificially low mortgage-interest rates) distort demand, encouraging people to buy bigger houses than they otherwise would. That means less spending on medical technology, or software, or alternative energy—the sectors and products that could drive U.S. growth and exports in the coming years. Artificial demand for bigger houses also skews residential patterns, leading to excessive low-density suburban growth. The measures that prop up this demand should be eliminated.

If anything, our government policies should encourage renting, not buying. Homeownership occupies a central place in the American Dream primarily because decades of policy have put it there. A recent study by Grace Wong, an economist at the Wharton School of Business, shows that, controlling for income and demographics, homeowners are no happier than renters, nor do they report lower levels of stress or higher levels of self-esteem.

Once again I have to say, thank you Richard!

I just read the book “Who’s Your City” by Richard Florida (2008). He basically builds upon the theories he explained in his last books (2002 and 2005) and recent articles. For the record, I have to say that since I read “The Rise of the Creative Class”, as a mandatory reading for an Economic Development Class at Georgia Tech, I did not like his “theories”. However, the more that I read from him I think he has some very good points.

I already watched a video of a recent presentation, so many things he said were familiar to me. I put a link to the website of the book. Here I’m writing some of the things that I considered while I was reading the book. I will later share other ideas about the book.

 

This is NOT a book review.

Because the book was published in 2008, it was nice to read updated information. The idea of the mega-region or megacity is very compelling. I’m sure that anyone reading his book has to believe that, if interested in innovation, there is not a chance to avoid living in a big metropolis. Besides, “the share of the world’s population living in urban areas increased from just 3% in 1800 to 14% in 1900. By 1950, it had reached 30%. Today, this number stands at more than 50%. In the advanced countries, three-quarters of people live in urban areas.” (p. 18-19, quoting UN reports)

Although I do not fully agree with his explanation about the economic growth theory (p. 61-67), I found it very useful. He explains how the economy is tied to geography since prehistorical times. He quotes A. Smith, D. Ricardo, A. Marshall, Schumpeter, R. Solow, P. Romer and finalizing with Jane Jacobs. I have read some of each one, but I have never read anything from Jacobs, so I think her book “The economy of cities” is going to be in my list, although for now, the insights of Florida will do.

 

People: Rooted or Mobile?

Another thing of the book I found interesting was his concept of the people who are rooted or mobile (although I think income per capita has a big influence). Something that really shocked me was that 40 million people in the U.S. who move every year; 15 million make significant moves of more than 50 or 100 miles (p. 6) Of the people who move, 52% of them do it to find new housing (up/down grade, etc.). Another 26% say the move for family reasons and a 15% of the Americans move on account of work (p.83-84). Florida says “Still the notion that we move for job persists, despite evidence of the contrary. Ever since I became interested in the question of how people choose where they live and work, I’ve routinely asked my students where they plan to go after graduation”.

After reading this I wonder how big the difference in Europe is. How many million Europeans travel more than 100 kilometers a year? My first thinking is that only a tiny fraction of the American 15 million. I also wonder how many of them don’t do it for job purposes. However, I keep finding more and more younger people who might break this European historical trend. For example, my younger brother and wife just graduated from the university, I asked them where they would like to move, and they had consistent answers with what Florida describes. My brother would like to move in Paris, but not to hypothetical well paid job in Teruel, Spain. In fact not only my brother, many other students here in Denmark that I asked, want to move to cool places, referring to Copenhagen, Berlin, London. For the record my sister in law would like to move back to her native city, which explains the value given to live close to family and friends. This relates to the 2007 study by Powdthavee, which says that you should make 85,000 GBP a year, just to make up for the lack of unhappiness you feel from being far from family and friends (p.87)

 

Do you really want your city to grow?

Florida also addresses one of my doubts, that is, when cool places keep attracting people, there is a moment when certain population of the creative class — the ones that are not well paid, that is musicians, bohemians, etc, against engineers, architects, etc. —  can not afford to live in a more demanded area. Then what happens; can still this city be creative? He answers “escalating real state prices can inhibit innovation” (p. 140).

 

Here lays a conundrum of urban development. Many small cities dream to grow, in fact they are loosing population and they’re afraid they will disappear. All of them dream of glorious past times when the city was in the map. They want their young people to stay, their population to grow and the employment to thrive. However, no matter what they do they keep getting small. Then in the other hand we have other small cities, that for x or y reasons they keep getting bigger and bigger, growing and growing. For example, the project that I’m involved in is Frederikshavn, a provincial city in north Denmark, that has been decreasing in importance during the last decades. I compare this city with my hometown, Alcalá de Henares. A city that has been growing to a tremendous rate. People are happy that there is more money in the city, and unemployment is low. In the case of Frederikshavn, the housing is extremely cheap, while in Alcala is extremely expensive, this gets accentuated comparing by their income averages. That is, I guess that in Frederikshavn people use 25% of their income in housing while in Alcala the expense more than a 50%. But is there a limit? Perhaps we have already reached it. Policy makers in each city have a tremendous role to keep the city alive (Florida explains this in the section “leaders of squelchers” p. 180-181).

It’s a question to analyze if a city really wants to grow or not. I think this should be the first question for a running mayor. Do you want the city to grow? At what cost?

 

In a city like Frederikshavn, they would love to see their houses prices rise. But what happen when people keep moving in, and moving in and housing prices became prohibitively expensive? In certain way that’s what happened to me. I had a nice consulting job in Alcala, close to my family, but my wife and I were not willing to pay  300.000 Euros for a small two bedroom apartment. Many people like me, either leave the city or live there struggling. Therefore a city should be careful with what they ask for. Population pyramids, immigration and industrial trends need to be considered.

 

Something between own and rent

Florida considers that the idea of homeownership might belong to an expired industrial era (p. 142-143). Everyone says that renting is throwing the money out of the window, while buying a home is probably the hardest decision to take in someone’s life –“where”- (although it impact you more, choosing what to study right after high school –“what”-  or falling in love with someone –“who”- , does not seem very analyzed decisions). Buying a house limits yours mobility.

 

He follows “The creative age may well require alternative forms of housing – something between ownership and renting”. It’s quite interesting that this type of housing already exists in Denmark, this is cooperatives or Andelsbolig (Andel means “a part of something” and Bolig means apartment or house). I found this type of housing an excellent option and we have been seriously looking at several andelsbolig. To the best of my knowledge this form of housing does not exist neither in Spain, Germany, USA nor Latin America. I wish they had this type of housing more widespread everywhere. I think Florida got it right on this one.

 

Another main subject of the book that I can mention is the “Geography of Happiness”, an exciting subject, although obviously somewhat shaky. I also enjoyed reading about the different rankings for places where to live.

I will later use some of its argument, quotations and bibliography for my work. I’m grateful for his work.