Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 598

Earlier this year, Enrico Moretti, who is a professor at UC Berkeley, published this research paper looking at the effect of high-tech clusters on productivity and innovation. (I am unclear if there is any relationship to the Italian brewing company Birra Moretti.)

One of the things he looks at in the paper is the decline of Kodak. Headquartered in Rochester, New York, Kodak famously missed the transition to digital photography. And so by the late 1990s, they were forced to start letting people go. The result was an almost 50% decline in the size of the entire "high-tech cluster" in Rochester.

But what Moretti goes on to test in his paper is the impact that this employment decline had on productivity and innovation outside of Kodak and outside of the photography sector (but within Rochester). And what he found was that between 1996 and 2007, the productivity of non-Kodak inventors dropped by about 20%!

This, of course, is one of the great features of cities. Even if you're not working at some big company with lots of smart people, just being in the same city, on the same block, or within the same office building, can make you more productive. It turns out that business ecosystems are pretty interconnected. Spillovers are important.

For more on this topic, check out this recent Wired article by Viviane Callier. In it she makes the case that remote work is going to negatively impact productivity and innovation over the long run.

Photo by Yassine Khalfalli on Unsplash

Years ago I wrote about a book that venture capitalist Albert Wenger was writing -- in public I would add -- called The World After Capital . The public bit is interesting. As he was writing the book over the last ten years or so, he did it in public and published drafts along the way. This allowed him to get feedback, learn things, and revise accordingly. He calls this a "knowledge loop" and it ties in nicely with some of the topics that he covers in the book.

The first focus of the book is on explaining that capital (which was a constraint of industrialization) is no longer scarce. This isn't necessarily true everywhere, but he argues that it is true in the developed world. What is instead scarce today is attention. That is our defining constraint as we continue to move into the Knowledge Age. The second focus of his book is on how he thinks we should best respond to these changes, as well as to the limitations of capitalism.

I haven't read the book yet (only scanned it), but it's now in my queue. Normally my queue consists of a stack of partially read books next to my bed. But this one is digital only for the time being. If you'd like to read a digital copy (there's a downloadable PDF), go here . Apparently there will also be a hard copy available sometime later this year or early next year.

https://twitter.com/graykimbrough/status/1198703644721524744?s=20

This is a chart by economist Gray Kimbrough from 2019. I recently saw it resurface and so I thought I would reshare it here on the blog.

The y-axis is the percentage of US household wealth (by demographic cohort). And the x-axis is median cohort age. So one way to look at this chart is as follows.

When the median age of a Baby Boomer was 35 (which happened in 1990), they owned about 21% of US household wealth.

When the median age of a Gen Xer was 35 (which happened in 2008), they owned about 9% of US household wealth.

Millennials haven't yet hit a median age of 35, but in 2019 they owned about 3.2% of US household wealth.

Of course, one thing to keep in mind is that these demographic cohorts are not the same size . In 1990, Boomers represented 31% of the US population. And in 2008, Gen Xers were only 22% of the population.

But even if you normalize, there are some intergenerational wealth gaps here.