The Atlantic Monthly recently published a fantastic article by author and thought-leader Richard Florida on “How the Crash Will Re-Shape America.”
Certain cities are bound to weather the storm better than others. Some will rise, changed but stronger from the ordeal. Others may decline and become mere footnotes in our history. As a business owner, the downturn can be terrifying but if you can read the urban geographic signs that Florida outlines, you might just be fine.
According to Florida, if you live in a city that is part of a mega-region such as Char-Lanta, SoCal, or Nor-Cal, chances are your city will make it through this recession. Forty of the largest mega-regions in the world are home to 18% of the population. These mega-regions tend to attract the best and brightest, the most educated and the most creative. As it happens, when lots of bright people live and work together, they tend to innovate and create which is ultimately good for business and good for the economy. The Santa Fe Institute calls this urban metabolism, and as mega-regions grow, the rate of metabolism increases. More things that are good for business and good for the economy will be produced.
Another interesting point that Florida makes is that economic recessions tend to underline and accelerate existing trends in the economy. For a long time now, our economy has been moving away from manufacturing and more towards creative idea-driven industries. As the number of jobs in the tangible sector continues to decline, jobs in the intangible (or creative) sector continue to rise. This will only become more pronounced now.
Florida makes several fascinating economic arguments in this 6-page article (including the fact that the benefits of homeownership are a fabricated American economic myth and that the rising rate of homeownership has actually been detrimental to our overall economy) and it is definitely worth the read. But what I took away was this: there is silver lining in the grim economic cloud. The future lies in knowledge-based, idea-based industries. If towns on the decline can somehow find a way to harness their creative chi and attract new, young, innovative businesses to their zip codes, all is not lost. Likewise, if businesses are nimble and creative, they will also probably weather the storm. We’re in the middle of a great shift and creativity will be the driving force behind who ends up on top.
