This week’s readings focused primarily on the innovative sector of global economy and how cities are able to develop and flourish. Firstly, the definition of a city had to be given and Glaeser put it simply as an absence of physical space between people and companies. This definition was important in learning how a city develops and succeeds because all the human talent that is concentrated in one area and their ideas (or what is called “human capital”) is what leads to innovation and productivity.
Cities used to thrive on harbors and importing/exporting physical goods, but they have now shifted to relying on the innovative sector which provides ideas, innovation, ingenuity, knowledge to “create things the world has never seen before.” According to Moretti, this leads to the multiplier effect, increasing employment and salaries for those who provide local services to the innovative worker. Therefore, for a city to develop economically, it must attract innovative companies that will provide jobs for the less skilled workers by consuming more local services than other workers and creating a need for more local jobs.
Since innovative workers are attracted to other innovative workers, the economy of the location changes and develops but it also increases the divide between cities and communities because talent lays with the talented and the “talentless” are drawn together, separate from the talented. Another point that also exacerbates “The Great Divergence” is that one worker with a college degree gets less salary than another worker with the same degree in a bigger, more productive city, simply due to geographic location.
Although right now this increase in demand for innovative workers seems like it is greatly improving the global economy and especially the economies in large cities, I believe there is the possibility of “creative destruction” where these innovative jobs and new technological advancements will actually destroy jobs. Cities can become more mechanized and dependent on technology. Already technology has taken the jobs of many, producing what a human would in a fraction of the time and fraction of the cost.
Moretti believes that this is unlikely since the innovation sector of the economy is always increasing and looking for new talent. Perhaps this is so but I don’t think there is enough innovators to keep supplying jobs for the less-innovative, the labor workers. And even if the numbers of innovative workers keep increasing, the technological advancements they come up with will also keep increasing until the need for physical laborers will be almost non-existent with machinery taking over the jobs of human workers.
Technological advancements can be amazingly helpful to the world and the economy as we’ve seen with the creation of planes for trading and global communication technology as well as medical advancements that save millions, maybe billions of lives every year, its rapid growth may take a toll on the jobs of the less innovative.
