Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1136

It’s fine to talk about the importance of big cities in today’s world, but there’s another side of this coin to consider. What happens to the towns and smaller cities who aren’t guiding the global economy?

Here is an interesting snippet from the NY Times that recently caught my attention:

As one of my college professors recently told me about higher education, “The sociological role we play is to suck talent out of small towns and redistribute it to big cities.” There have always been regional and class inequalities in our society, but the data tells us that we’re living through a unique period of segregation.

If you combine the above with the fact that a significant number of jobs are likely to be automated in the near term, one has to wonder what the world is going to look like assuming the status quo continues.

I’ve always been fascinated by questions around the origin and location of cities. How did they get their start and why did they get founded where they did? Access to water and resources are obvious factors. But it could have also been for defensive reasons. 

In some cases, the location makes intuitive sense. Quebec City, for instance, is founded on high ground at the point “where the river narrows.” Both of these elements come in handy when you’re trying to fend off intruders. But in other cases, the exact location of a city or town may not be as obvious.

Thankfully, Wendover Productions – which is a YouTube channel entirely focused on explaining how the world works – recently published a video called: Why Cities Are Where They Are . (Video embedded below.) It’s about 16 minutes long and it has gotten over 1 million views at the time of writing this post.

[youtube https://www.youtube.com/watch?v=3PWWtqfwacQ?rel=0&w=560&h=315]

They also have a video that I watched today called: The Economics of Airline Class . It covers why airlines don’t care about coach and don’t make money off coach travellers. The real estate developer in me enjoyed the part about revenue per square foot for each “class” section of the plane.

Below is a mapping (by Taylor Blake of the Martin Prosperity Institute ) of the top 10 metro economies in the world by GDP at purchasing power parity. In brackets, is a country with a comparable GDP.

Tokyo is the world’s largest metro economy with ~$1.6 trillion in GDP. This is greater than the GDP of all of Canada. New York City is number 2 with ~$1.5 trillion in GDP, which is only slightly less than Canada.

The point of all of this – which Richard Florida argues here – is that the global economy is, today, powered by metropolitan areas. And yet our governance structures do not reflect this new reality.

Here’s an excerpt from Florida’s article:

“Cities really are the new power centers of the global economy—the platforms for innovation, entrepreneurship, and economic growth. But when it comes to fiscal and political power, they remain beholden to increasingly anachronistic and backward-looking nation-states, which has become distressingly obvious with the rise of Trumpism in the United States and populism around the world.”

Florida has been arguing this for years and I’ve really gotten behind it. The above chart is a good reminder just how big and wealthy some cities have become in today’s economy.