Where the Smart People Are Going

Smart people of the highly educated sort that economists refer to as "human capital" are key engines of economic growth and development. More and more, they have been clustering in a relative handful of big cities. A recent post by Aaron M. Renn, who blogs as The Urbanophile, charts the changing density of college educated people across U.S. metro areas. His analysis builds on an earlier analysis by Rob Pitingolo (I blogged about it here), which introduced a measure of human capital density.

The chart above, from Renn's analysis, shows the metros which registered the biggest change in human capital (measured as the share of adults with a bachelor's degree or higher) over the decade spanning 2000 and 2009.  New York County, which is Manhattan, registered far and away the largest increase. Renn notes that at first glance this might not seem so surprising, since New York is a big place. But a closer look at the numbers reveals that it is a very big deal indeed: "Frankly, it's staggering. Manhattan increased its density of people with college degrees by 7,500 people per square mile," which is more than the total population density of most of the cities in the United States. Kings County (Brooklyn), Queens, and the Bronx have also showed a marked increase in human capital density, clear evidence of greater New York's resurgence as a talent hub.  Talent is increasingly drawn to big, dense cities; Renn's top ten counties are all in the greater New York, San Francisco, Boston or D.C. areas.

But is this seeming explosion of human capital just an artifact of population growth? In the chart above, Renn plotted each county's increase in human capital (again adults with a bachelor's degree and above) as a percentage of its total increase in population. The list of counties is more or less the same, with Manhattan in first place, followed by D.C. The rest of the top ten counties were all in the greater New York, D.C., Boston, or San Francisco areas. All of them added human capital at a rate of 100 to 200 percent of their overall population gain.

America's economic landscape is increasingly spiky. Talented, highly-skilled and highly educated people are clustering in and around America's major cities to an extent few would have thought possible a couple decades ago, when suburbs and sprawl were the locations of choice and cities were for the musicians, artistic creatives, and the poor. This kind of clustering, the advantages of which Jane Jacobs described decades ago, is fueling the revival of the core cities of the Bos-Wash mega-region and San Francisco, and spurring the revival of older urban districts like Brooklyn, which according to an analysis earlier this year by pollster Nate Silver, includes New York City's most desirable neighborhood, Park Slope.

Despite its many upsides, this urban revival both reflects and reinforces the great economic and social divide which is splitting America by geography as well as by class. Beside the small number of resurgent central cities stand many other once-great cities, including the Rustbelt cities that literally drove American economic might during the early to mid 20th century, that continue to languish and even decline, while the Sunbelt cities of sand have been hit heavily by the housing crash.

Left to its own devices, America's economic landscape will only get spikier and more uneven, and its political landscape, already being reshaped by the rise of right wing populism and of the Tea Party movement, ever more polarized. Restoring sustainable economic growth and a more socially and politically cohesive society will require nothing less than new policies and institutions which can channel growth in ways that enable the many benefits of economic clustering while ensuring improving wages and living standards for the broader populace.