Book review: The New Geography of Jobs

The New Geography of Jobs

By Enrico Moretti

Houghton Mifflin Harcourt


So what company will our city keep? 

Will Hamilton join the ranks of the fortunate few? Will our city be blessed with a thriving innovation sector and a highly skilled and well-paid workforce?  Will great employers set up shop and will the best and brightest employees take up residence in Hamilton?

Or will our city join the ranks of struggling communities, cursed with the wrong industries for a knowledge economy, a limited human capital base and too many dead-end jobs paying less than living wages?

Cities are rapidly moving in one of these two directions in what author  and University of California economics professor Enrico Moretti calls The Great Divergence.  Even through the economic downturn, a select few cities are experiencing an ever increasing concentration of good jobs, talent and investment. Other cities are in free fall.

“At one extreme are the brain hubs – cities with a well-educated labour force and a strong innovation sector,” says Moretti. “At the other extreme are cities once dominated by traditional manufacturing, which are declining rapidly, losing jobs and residents. In the middle are a number of cities that could go either way.”

In today’s knowledge economy, the strength of a city rests on the health of its innovation sector. It’s a sector that includes advanced manufacturing, information technology, clean tech, life sciences, medical devices, robotics and nanotechnology. 

The innovation sector is where the jobs are. Take life science research as just one example. Employment has grown 300 per cent over the last 20 years. And biomedical engineers rank at the top of the list of occupations expected to grow the most over the next decade.

The innovation sector goes beyond health and technology to include jobs that generate new ideas, products and services. “There are entertainment innovators, environmental innovators, even financial innovators,” says Moretti. “What they all have in common is that they create things the world has never seen before.”

 The only way to generate good-paying jobs in the face of global competition is to produce goods and services that are innovative, unique and not easily reproduced. Moretti says innovation has become America’s new engine of prosperity. “Cities with a large percentage of interconnected, highly educated workers will become the new factories where ideas and knowledge are formed.”

A thriving innovation sector benefits everyone in the community. Moretti has crunched the numbers and found that for each new high-tech job added to a city, five additional jobs in both skilled and unskilled occupations are created outside of the high-tech sector. What’s more, skilled and unskilled workers earn significantly more than their counterparts doing identical work in cities caught on the wrong side of The Great Divergence.

“Innovative industries bring good jobs and high salaries to the communities where they cluster, and their impact on the local economy is much deeper than their direct effect. Attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services. The best way for a city to generate jobs for less skilled workers is to attract high-tech companies that hire highly skilled ones.”

Unfortunately, there’s no blueprint or proven formula for transforming a city into a brain hub. That said, Moretti shows that we can put the odds in Hamilton’s favour by getting two things right. First, build the ecosystem that fosters, supports and connects our city’s innovators. And second, build a highly skilled workforce. Helping young people in our Code Red neighbours earn diplomas, degrees and skilled trade certificates may well be the best investment our city can make.

Published by

Jay Robb

I've reviewed more than 500 business books for the Hamilton Spectator since 1999 and worked in public relations since 1993.

2 thoughts on “Book review: The New Geography of Jobs”

  1. People immigrate, sometimes just for a short while, looking for prosperous countries, cities in order to be able to make a decent living. Generally what’s called the “North” has more to offer than the “South”.

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