Advanced economies are struggling to find an economic path past recession. On Sunday, David Cameron, the UK prime minister, promised an assault on the “enemies of enterprise”, while US president Barack Obama used January’s state of the union speech to promote jobs and competitiveness. But this new dash for growth is too often a battle of old ideas. To turn the corner, it must instead embrace the innovation that emerges naturally in our great urban centres.
The figures are stark. Some 18 per cent of America’s output comes from its three largest metropolitan areas while Greater London is more than 50 per cent more productive than the rest of the UK. Technology and globalisation make these cities more important, because both increase the returns to knowledge and innovation.
We are a social species and we learn by being around clever people. Cities have long sped this flow of ideas. Eighteenth-century Birmingham saw textile innovators borrow each other’s insights – and gave us the industrial revolution. Today, older, colder US cities (such as Boston and Chicago) survived deindustrialisation by grabbing on to innovations in finance, computers and biotechnology.