CC image from urbanfeel on flickr

Ed Glaeser, professor of economics at Harvard, chimes in on cities, density, and their economic value on the Economix blog:

But now humanity is marked more by concentration than by spread. In 2007, one-half of the world’s population became officially urban. One-third of Americans inhabit just 16 large metropolitan areas, which collectively use only a tiny fraction of the country’s land mass…

Understanding the appeal of proximity — the economic advantages of agglomeration — helps make sense of the past and future of cities.   If people still clustered together primarily to reduce the costs of moving manufactured goods, then cities would become increasingly irrelevant as transportation costs continue to decline.

If cities serve, as I believe, primarily, to connect people and enable them to learn from one another, than an increasingly information-intensive economy will only make urban density more valuable.

Glaeser highlights several conclusions – including a key one that density increases productivity. Ryan Avent has harped on this before.  Any way you slice it, the end idea is that cities are the intellectual and economic hubs of our country.

Improvements in transportation and communication costs made it cost-effective to manufacture in low-cost areas, which led to the decline of older industrial cities like Detroit. But those same changes also increased the returns to innovation, and the free flow of ideas in cities make them natural hubs of innovation. Since the death of distance increased the scope for new innovation, idea-intensive innovating cities were helped by the same forces that hurt goods-producing cities.

Humanity is a social species and our greatest gift is our ability to learn from one another. Cities thrive by enabling that learning, and they have become only more important as knowledge has become more valuable. Understanding what makes cities work is more important than ever.

In order to avoid alienating groups on political grounds, it’s worth noting that we’re talking about cities, broadly defined.   Just as the focus on urban, walkable places is an urban design distinction rather than a political one, the benefits of urban agglomerations are regional.  Design matters, of course – I’d be curious to see if an economist could measure if economic benefits of agglomeration can be attributed to any other characteristics other than density.