The world is spiky

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The World Is Spiky
Globalization has changed the economic playing field, but hasn’t leveled it



Economic activity—roughly estimated here — —roughly using light-emissions data data—is remarkably concentrated. Many cities, despite their large populations, barely register.



Urban areas house half of all the world’s people, andcontinue to grow in both rich and poor countries. broad, flat world accounted for just five percent of all innovations patented in the United States. In 2003 India generated 341 U.S. patents and China 297. The University of California alone generated more than either country. IBM accounted for five times as many as the two combined. This is not to say that Indians and Chinese are not innovative. On thecontrary, AnnaLee Saxenian, of the University of California at Berkeley, has shown that Indian and Chinese entrepreneurs founded or co-founded roughly 30 percent of all Silicon Valley startups in the late 1990s. But these fundamentally creative people had to travel to Silicon Valley and be absorbed into its innovative ecosystem before their ideas became economically viable. Such ecosystemsmatter, and there aren’t many of them. Map C—which makes use of data from both the World Intellectual Property Organization and the U.S. Patent and Trademark Office—shows a world composed of innovation peaks and valleys. Tokyo, Seoul, New York, and San Francisco remain the front-runners in the patenting competition. Boston, Seattle, Austin, Toronto, Vancouver, Berlin, Stockholm, Helsinki, London, Osaka,Taipei, and Sydney also stand out. Map D shows the residence of the 1,200 most heavily cited scientists in leading fields. Scientific advance is even more concentrated than patent


he world, according to the title of the New York Times columnist Thomas Friedman’s book, is flat. Thanks to advances in technology, the global playing field has been leveled, the prizes arethere for the taking, and everyone’s a player—no matter where on the surface of the earth he or she may reside. “In a flat world,” Friedman writes, “you can innovate without having to emigrate.” Friedman is not alone in this belief: for the better part of the past century economists have been writing about the leveling effects of technology. From the invention of the telephone, the automobile, and theairplane to the rise of the personal computer and the Internet, technological progress has steadily eroded the economic importance of geographic place—or so the argument goes. But in partnership with colleagues at George Mason University and the geographer Tim Gulden, of the Center for International and Security Studies, at the University of Maryland, I’ve begun to chart a very different economictopography. By almost any measure the international economic landscape is not at all flat. On the contrary, our world is amazingly “spiky.” In terms of both sheer economic horsepower and cutting-edge innovation,

When looked at through the lens of economic production, many cities with large populations are diminished and some nearly vanish.Three sorts of places make up the modern economic landscape. First are the cities that generate innovations. These are the tallest peaks; they have the capacity to attract global talent and create new products and industries. They are few in number, and difficult to topple. Second are the economic “hills”—places that manufacture the world’s established goods, take its calls, and support itsinnovation engines. These hills can rise and fall quickly; they are prosperous but insecure. Some, like Dublin and Seoul, are growing into innovative, wealthy peaks; others are declining, eroded by high labor costs and a lack of enduring competitive advantage. Finally there are the vast valleys—places with little connection to the global economy and few immediate prospects.

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