A colleague of mine was reading up on development theory for a client project and came across a very interesting set of contrarian views about its animating spirit. The piece he passed me was called How Do We Grow? by David Ellerman, written back in 2005. He summarized the life’s work of a scholar named Jane Jacobs, a woman who managed to spend her entire career studying economies without ever being schooled in the conventional theories of economics. I’m no expert on the topic, so forgive me if I’m making any elementary mistakes, but I found myself nodding as I read his description of her ideas, which touch on a wide range of important policy issues.
Five points stood out to me:
- The unit of analysis in discussing economic growth is not the nation but the city and its surrounding area.
- Cities should maximize diversity in their economies in order to enable lateral innovation.
- Specialization is good for efficiency but locks in the existing set of niches and damages the potential for innovation.
- Competition between cities at roughly the same level of development provides healthy stimulation for innovation, but can be damaging when the cities are at radically different stages, since the products of the more-developed city can be too advanced for the less-advanced city to improve.
- The best corporate structure for innovation is one that encourages spin-outs. This can be accomplished through corporate culture, democratic accountability to the workers, or government policy. …more
I'm Noah Flower, an analyst at
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