Complex economic activities concentrate in large cities

Why do some economic activities agglomerate more than others? And, why does the agglomeration of some economic activities continue to increase despite recent developments in communication and transportation technologies? In this paper, we present evidence that complex economic activities concentrate more in large cities. We find this to be true for technologies, scientific publications, industries, and occupations. Using historical patent data, we show that the urban concentration of complex economic activities has been continuously increasing since 1850. These findings suggest that the increasing urban concentration of jobs and innovation might be a consequence of the growing complexity of the economy.

[1]  H. M. Collins,et al.  Tacit and Explicit Knowledge , 2010 .

[2]  Andrew Harris,et al.  The New Urban Crisis: how our cities are increasing inequality, deepening segregation, and failing the middle-class – and what we can do about it , 2018, Planning Perspectives.

[3]  Joon-Oh Park,et al.  The Increasing Dominance of Teams in Production of Knowledge , 2011 .

[4]  M. Polanyi.  Chapter 7 – The Tacit Dimension , 1997 .

[5]  J. Henderson,et al.  Handbook of Regional and Urban Economics , 2015 .

[6]  Canfei He,et al.  How to jump further and catch up? Path-breaking in an uneven industry space , 2017 .

[7]  Keun Lee,et al.  Technological Regimes, Catching-Up and Leapfrogging: Findings from the Korean Industries , 2001 .

[8]  Daniel M. Romero,et al.  The nearly universal link between the age of past knowledge and tomorrow’s breakthroughs in science and technology: The hotspot , 2017, Science Advances.

[9]  César A. Hidalgo,et al.  The building blocks of economic complexity , 2009, Proceedings of the National Academy of Sciences.

[10]  D. Rigby,et al.  The Geography of Complex Knowledge , 2017 .

[11]  L. Bettencourt,et al.  Supplementary Materials for The Origins of Scaling in Cities , 2013 .

[12]  O. Sorenson,et al.  Technology as a complex adaptive system: evidence from patent data , 2001 .

[13]  M. Feldman,et al.  R&D spillovers and the ge-ography of innovation and production , 1996 .

[14]  Vetle I. Torvik,et al.  Disambiguation and co-authorship networks of the U.S. patent inventor database (1975–2010) , 2014 .

[15]  Jonathan Rothwell,et al.  The Hidden STEM Economy. , 2013 .

[16]  A. Scott,et al.  The Nature of Cities: The Scope and Limits of Urban Theory , 2015 .

[17]  D. Helbing,et al.  Growth, innovation, scaling, and the pace of life in cities , 2007, Proceedings of the National Academy of Sciences.

[18]  J. Gans,et al.  The Product Market and the Market for 'Ideas': Commercialization Strategies for Technology Entrepreneurs , 2002 .

[19]  P. Romer.  Endogenous Technological Change , 1989, Journal of Political Economy.

[20]  A. Sunmade.  The World is Flat: A Brief History of the Twenty-First Century , 2008 .

[21]  Matthew E. Kahn,et al.  The birth of edge cities in China: Measuring the effects of industrial parks policy , 2017 .

[22]  Edward L. Glaeser,et al.  The Divergence of Human Capital Levels Across Cities , 2005 .

[23]  Horacio Samaniego,et al.  Scaling and universality in urban economic diversification , 2016, Journal of The Royal Society Interface.

[24]  Chris Arney,et al.  The Atlas of Economic Complexity: Mapping Paths to Prosperity , 2012 .

[25]  D. Rigby,et al.  Unveiling the geography of historical patents in the United States from 1836 to 1975 , 2016, Scientific Data.

[26]  César A. Hidalgo,et al.  The Product Space Conditions the Development of Nations , 2007, Science.

[27]  Gaston Heimeriks,et al.  On Scaling of Scientific Knowledge Production in U.S. Metropolitan Areas , 2014, PloS one.

[28]  Souvik Ghosh,et al.  Global labor flow network reveals the hierarchical organization and dynamics of geo-industrial clusters , 2019, Nature Communications.

[29]  David Warsh,et al.  Knowledge and the Wealth of Nations: A Story of Economic Discovery , 2006 .

[30]  M. Feldman,et al.  Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition , 1999 .

[31]  L. Bettencourt,et al.  A unified theory of urban living , 2010, Nature.

[32]  Enrico Moretti,et al.  The New Geography of Jobs , 2012 .

[33]  César A. Hidalgo.  Why Information Grows: The Evolution of Order, from Atoms to Economies , 2015 .

[34]  Frank Neffke,et al.  Skill-relatedness and firm diversification , 2013 .

[35]  Rebecca Diamond.  The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000 , 2016 .

[36]  Franco Malerba,et al.  Catch-up cycles and changes in industrial leadership:Windows of opportunity and responses of firms and countries in the evolution of sectoral systems ☆ , 2017 .

[37]  E. Glaeser,et al.  Growth in Cities , 1991, Journal of Political Economy.

[38]  Bruno Blais,et al.  Citation analysis of scientific categories , 2017, Heliyon.

[39]  S. Klepper.  Employee Startups in High‐Tech Industries , 2001 .

[40]  Edward L. Glaeser,et al.  The role of industry-specific, occupation-specific, and location-specific knowledge in the growth and survival of new firms , 2018, Proceedings of the National Academy of Sciences.

[41]  Benjamin F. Jones.  The Burden of Knowledge and the &Apos;Death of the Renaissance Man&Apos;: Is Innovation Getting Harder? , 2005 .

[42]  James A. Evans,et al.  Large teams develop and small teams disrupt science and technology , 2019, Nature.

[43]  Flávio L Pinheiro,et al.  Optimal diversification strategies in the networks of related products and of related research areas , 2017, Nature Communications.

[44]  Maryann P. Feldman,et al.  The Geographic Sources of Innovation: Technological Infrastructure and Product Innovation in the United States , 1994 .