The geography of digital

December 29, 2014

Here’s more proof that despite the digital world appearing to be sitting solely in cyberspace, geography matters for digital businesses – perhaps even more than ever.

In his article “When G,M. Was Google” in The New Yorker of 1 December 2014, Nicholas Lemann writes:

One of the ironies of the tech economy, duly noted by Schmidt and Rosenberg, is that while the products and the users are geographically untethered, the businesses that supply them are increasingly clustered in one physical location, Silicon Valley. That’s because of the unusual, and apparently non-replicable, infrastructure of support there: the Stanford engineering school, the Sand Hill Road venture-capital firms, the angel investors, the talent pool of coders and engineers, the technical-infrastructure providers.

Did you get that phrase – “increasingly clustered”?

So much for the work from anywhere, do all work from home concept. People still need – and indeed want – to be physically proximate to each other.

The reference to “Schmidt and Rosenberg” above comes from the book How Google Works, by Eric Schmidt (former Google CEO) and Jonathan Rosenberg (former Head of Product Development).

Australian spatial economics

August 19, 2014

Even in this digital, online world, it’s no secret that all economic activity has an important element of physical space.

Economists and geographers know this. In fact, a whole field of study is devoted to it, and it’s called economic geography.

Unfortunately, the spatial dimension to our work and our consumer lives is something that government policy makers, economic planners and regulators often seem to forget or never even consider. Too many government policies and programs assume that we are all sitting in the same space – presumably (when here in Australia) within a five to ten kilometre radius of the central business district of one of our capital cities: Sydney, Melbourne, Brisbane, Perth, Adelaide – or perhaps Canberra (but certainly not Darwin or Hobart).

Here in Australia, about two-thirds of us live in the capital cities, making Australia (despite our “outback” and rural myths) one of the most urbanised countries on earth. Singapore, city-state that it is (with a 100 percent urbanisation), we are not. But more than 89 percent of us live in urban areas, not far behind Japan and South Korea (both at 91 percent).

So the high rate of Australian urbanisation means we can assume geography is not significant, right? Wrong. With our massive continent and our sprawling cities, we have a number of regions that experience profound and intense geographic disadvantage. Think western Sydney, western Melbourne and most regional, rural and remote areas.

The fact is that employment and economic activity is NOT evenly spread along with the population, despite our high urbanisation rate. Economic activity is particularly concentrated in and around the major central business districts, a point made comprehensively and convincingly in a report from the Grattan Institute entitled “Mapping Australia’s economy: Cities as engines of prosperity”, by Jane-Frances Kelly and Paul Donegan.

The Institute summarises the situation:

More than three-quarters of all economic activity in Australia happens on less than one per cent of the nation’s land mass. In today’s services-driven economy, Australia’s cities are the engines of material prosperity.

For a long time agriculture was the backbone of our economy, as we rode on the sheep’s back. After World War Two prosperity shifted to suburbia, with manufacturing employing one in four Australians. This report shows that Australia’s economy is increasingly driven by knowledge-intensive services located in Australia’s large cities. Within these cities the most intense and productive economic activity is concentrated around central business districts and a small number of other business hubs. The way these areas draw large numbers of businesses and workers together makes them all more productive.

Key facts from the report include:
– “Eighty percent of the value of all goods and services produced in Australia is generated on just 0.2 percent of hte nation’s land mass.”
– The CBDs of Sydney and Melbourne – just 7.1 square kilometres – generated $118 billion during the 2011/12 financial year, almost 10 percent of Australia’s economic activity.

And the major reason for the intense economic activity? The concentrations are of “highly knowledge-intensive and specialised services such as funds management, insurance, design, engineering and international education”, with highly skilled workers. And it is the physical “proximity to suppliers, customers and partners” that promotes efficiency, generating “opportunities to come up with new ideas and ways of working” (report, p. 1).

So there you go. We communicate via digital means and at great distances quicker and easier than ever. But yet, we still prefer – in fact, many of us need – to be physically close in order to work efficiently. Economic planners take note.

Mapping Australia's economy

April 6, 2014

Western Sydney is still one of Australia’s great challenges

Yesterday’s edition (5-6 April 2014) of The Sydney Morning Herald has brought a new series of articles about the challenges and difficulties facing residents of Western Sydney. Every few years, the Herald rediscovers Western Sydney (note: the majority of its readers live in the Eastern Suburbs or on the North Shore). Once upon a time, when I worked for the Western Sydney Regional Organisation of Councils (WSROC), the Herald had a Blacktown-based journalist (Richard Macy), although I am not certain if they do now.

In a detailed article by Matt Wade entitled “The daily exodus”, the following facts about “the West” stand out:

– Sydney is the seventh most congested city internationally.
– Long commutes are so bad that Charles Montgomery, in his book Happy City, estimates that “for a single person, exchanging a long commute for a short walk to work ‘has the same effect on happiness as finding a new love’”. He also quotes “a Swedish study found that people who endure more than a 45-minute commute were 40% more likely to divorce.” (My comment: commuting from many outer Sydney suburbs to the CBD can easily take 90 minutes one direction, and are especially bad if you have to change “modes” – from bus to train.)
– Rich people live in Western Sydney too. “The Ponds, near Kellyville, was rated the city’s most advantaged suburb” on an Australian Bureau of Statistics index.
– Parramatta ranked the 11th top performing economic area of Australia in 2012-13, with a growth rate of 1.6% that outstripped Sydney’s CBD.
– Olympic Park (Homebush Bay) is also in the top 20 economic districts of Australia.
– Western Sydney has very limited success in attracting key finance, service and IT jobs: only 17 percent of them are in the region.

The economic health of Western Sydney is one of Australia’s greatest challenges. Despite decades of discussion and investigation about a second airport for Sydney, it still has not been announced. I understand that this may happen “soon” for Badgerys Creek. Despite some local opposition to that, I think it is the single most important thing that can happen for the region.

More New Jersey uniqueness

February 10, 2014

I still wonder what it is about those of us who grew up in New Jersey:  some odd combination of “New Jersey pride” and defensiveness.  We love it, are affectionate to its foibles (even to the “armpit of the nation” references) and can’t stop seeking reassurance.  I don’t sense that from any other state in the east coast of the USA – or anywhere else, for that matter.   Perhaps New York and California (and now Texas and wherever else) are way too confident to stoop to what we former New Jerseyans do to prove to ourselves and the world (but mostly, I suspect to ourselves) that our childhoods were valid, were actually exciting and were somehow romantic.

The latest – and genuinely very interesting “isn’t New Jersey cool” websites are located on “Movoto”, a real estate sales and blog site (to figure).  There are four sets of photos that are worth checking out:

– The 29 greatest moments in New Jersey history

– The 22 maps of New Jersey they never showed you in school (From map number 5:  Did you know that New Jersey apparently is the only place in the USA where they/we call the night before Hallowe’en “mischief night”?  I didn’t.)

– The 13 maps the conclusively prove that North Jersey is better than South Jersey (and I did not know anyone cared – but they do)

– The 33 photos that will make you remember why you love New Jersey (well, they didn’t do it for me, but they very pretty nevertheless)

New Jersey postcard

The Democratic-Republican divide – the closer you live together, the more Democratic you are

December 15, 2013

This week’s lot of informational emails brought in two conflicting stories.  On the one hand, Linked In’s “The Big Idea has a post from Glenn Kelman entitled “The Texasization of America”, in which he promotes the idea, with some enthusiasm, that America should be more like Texas – with its low tax rates, low-density suburban car-oriented living and business-friendly environment.  He believes that Texas will become even more Republican, despite substantial evidence to the contrary – such as Micah Cohen’s March 2013 New York Times blog post.

Curiously, Kelman appears to misquote research that shows that denser areas are becoming more and more Democratic in their voting.  As Richard Florida points out, the increasing Democratic voting trend has been apparent for more than nine years now:  a 2004 book entitled The Emerging Democratic Majority by John Judis and Ruy Teixeira predicted this some time ago.  The authors consciously copied the name of the book The Emerging Republican Majority by Kevin Phillips; I read it while in college in the early 1970s.  Here is a copy of the original New York Times review of that older book, published on September 21, 1969 – and written by Warren Weaver, Jr.  Wait long enough and some things change dramatically, even inverting our original theories and conclusions.  But who knew then?

But the real insights on this phenomenon come from entrepreneur Dave Troy, who has carefully analysed the density versus voting patterns in the November 2012 Presidential election.  He definitively concludes:

98% of the 50 most dense counties voted Obama; 98% of the 50 least dense counties voted for Romney.

At about 800 people per square mile, people switch from voting primarily Republican to voting primarily Democratic. Put another way, below 800 people per square mile, there is a 66% chance that you voted Republican. Above 800 people per square mile, there is a 66% chance that you voted Democrat. A 66% preference is a clear, dominant majority.  (See the graph below.)

There are very few cities in red states….  The few dense cities that do exist in red states voted overwhelmingly Democratic.

Red state voters generally prefer low-density housing, prefer to drive cars, and are sensitive to gas prices. Once population density gets to a certain level, behaviors switch: high-density housing is the norm, public transit becomes more common, and gas use (and price sensitivity) drops.   Red state values are simply incompatible with density.

densityvotingchart 2012For those of us living in Australia, the question is:  how much does this phenomenon translate here?  Does it?  Partially yes, but partially … no.  (Anyone checked the voting intentions of some of Sydney’s dense eastern suburbs recently?)  But the patterns – and their cultural preferences – are distinctive.  Food for thought.




Cultural map of New Jersey

December 11, 2013

This “cultural map of New Jersey” by Rutgers employee and New Jersey native Joe Steinfeld went viral two years, but as I missed it then, you may have also.   (So much for the reach of social media in our instantaneous age!)  Some great truths lie here.


Remoteness Index of Australia

October 31, 2013

I am one of a small number that gets excited by a good map (the former town planner/geographer in me), but there is a great one of geographic remoteness in Australia as part of this document about families in rural and remote Australia, published by the Australian Institute of Family Studies:

Remoteness map of Australia

As I discussed in my recent post on rural and remote poverty, the key thing to remember is that almost every single indicator of well-being – educational attainment, health outcomes, families in crisis, etc (even telecommunications access) – declines as you move “outwards” in Australia from major cities to inner regional to outer regional to remote to very remote. This map shows it very well (although it does not include state boundaries on it, which would be helpful), and can be very helpful in determining which regions have compounded problems.

Fun American Geography Facts #1

March 5, 2013

Here are some fun American geographic facts – the first of occasional postings on the weird and wonderful things you can find in the United States of America.  Both of these are from the February 11/18, 2013 edition of The New Yorker.

What is the highest coastal point in the USA sound of Maine?  Give up?  In “The Toll”, Ian Frazier writes that it is the “top of Todt Hill” in the centre of Staten Island, at 409 feet about sea level.

Here’s another one:  Susan Orlean writes in “Walart” that taken as a whole (i.e. adding all of the stores together), Walmarts “are among the most visited interior spaces on earth”.




Richard Florida and the future of America in the economic downturn

April 4, 2009

I love Richard Florida, and I don’t mean that in a physical or romantic sense.  I love his surname “Florida” (although he was born in Newark, New Jersey) – so very American (“Florida”, almost as good as Colorado, Arizona, Nevada or Montana), so reminiscent of an America full of romance, promise and mystery.  I also love his work, filled with those easily understood insights into America’s economic geography. A lmost without peer, Florida has been instrumental in charting the recent economic, professional and workforce trends in American cities.  His 2002 book The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life  turned around much thinking about American cities, and helped to crystalise thinking about the importance of creative and knowledge workers.  While Florida was by no means the first to introduce these ideas, his concepts of the creative, high-tech and “gay” indexes certainly have grabbed the public imagination in a way that Jane Jacobs’s The Death and Life of Great American Cities did more than a generation ago.  His 2006 follow-up book The Flight of the Creative Class: The New Global Competition for Talent put the ideas into an international perspective.  People have argued – strenuously at times – with Florida’s data and conclusions, but no doubt he has laid the groundwork for a new way of thinking about American economic geography.

In Florida’s March 2009 Atlantic article entitled “How the Crash Will Reshape America“, he analyses the implications of the current global economic crisis for the economic and social geography of the USA – following up his own work and putting an overlay of the economic hard times.  Which American cities will be the greatest losers?  (And who within them?)  And who, indeed, will be the winners, if you can call them that?

Here is a summary list of Florida’s conclusions:

– “The current economic crisis is unlikely to result in the same kind of shared economic experience” like the Great Depression of the 1930s. – While no place in America is likely to avoid a long and deep recession, some places will do much better than others, some places “may never come back at all” and the recession will “permanently and profoundly alter the country’s economic landscape”.

– While New York City was in some ways the epicentre (my word, not Florida’s) of the current crash, it is likely to survive handily because (a) world economic centres don’t change very quickly (witness Amsterdam in 17th century to London in 19th century to New York); (b) New York remains a very open and accessible place to live and work by comparison with most alternatives; (c) “Financial positions account for only about 8 percent of the New York area’s jobs, not too far off the national average of 5.5 percent (and 28 percent in Bloomington-Normal, Illinois, 18 percent in Des Moines, 13 percent in Hartford, etc.); and (d) “New York is much, much more than a financial center”, in an enormous mega-metro area with a “broad range of creative industries” (sound familiar?);

– Mega-regions and hubs in them (Chicago, Los Angeles) will be better buffered than most places, and even Miami – hit hard by the real estate collapse – will remain an important financial centre for south Florida and Latin America.

– The attractiveness of cities has changed – “Thirty years ago, educational attainment was spread relatively uniformly throughout the country (is this true? DP), but that’s no longer the case. Cities like Seattle, San Francisco, Austin, Raleigh and Boston now have two to three times the concentration of college graduates of Akron or Buffalo”, with wider disparities for postgraduate degrees.

– The places most likely to suffer (“sadly and unjustly”) “are the ones least associated with high finance – “older manufacturing regions … shallow-rooted Sun Belt communities … (and) “the Rust Belt in particular”.

– The worst outlook? Detroit, “where the average home price (in October 2008) was $18,513”.

– “When work disappears, city populations don’t always decline as fast as you expect”, due to family ties and few prospects elsewhere.

– Small southern cities (with Asian car manufacturing plants) will benefit as American auto makers decline.

– The increase in home ownership has not necessarily been a good thing, and a decrease may not necessarily be a bad thing (DP: This is likely to be controversial, or at least seen as insensitive.)  As a result, the suburbs are likely to thin

– There will be a clustering of output, jobs and innovation in a small number of elite locations.