[MUSIC] So I can watch it at the back here? >> Yeah. >> Rolling. >> We're rolling. >> B rolling. >> C rolling. >> Call it for us. >> Yeah, sounds good. >> All right, action. >> Hi, I'm Richard Florida, welcome to The City And You. [MUSIC] Cities are, I guess, part of who I am, I didn't, well, I thought I came to study cities because they were intellectually interesting, and I guess I thought I discovered this in college, but really looking back, I realize that I got interested in this as a very young boy, it took me a while to figure that out, but that's what happened. I was born in the late 1950s in Newark, New Jersey, and for those of you who are not from the United States, or don’t know Newark, it’s arguably the most troubled city today in the United States, but when I was born in Newark, it was actually a very vibrant, dynamic city. My parents at the time both worked in New York, my mom had an office job, my dad worked in a factory and there was a vibrant downtown, filled with department stores, and shops, and restaurants, and it was quite multi ethnic. And about the time I was ten years old, we were down at the beach, we would go for an extended weekend because my dad's brother lived down near the beach, and I remember people coming up and saying, Newark's on fire, why was Newark on fire? There were racial riots, the African-American community in Newark, which had been the subject of terrible discrimination, lived in poverty, so the city, like many cities in the United States in 1967, in what's called the long, hot summer, exploded. And I remember when I was in college, my dad came to visit me one day and he said, Richard, I just want you to know the factory where I work is closing, it's shuttering. This factory, which employed hundreds of men like my dad, Italian, German, Irish, Puerto Rican, African American, was closing its doors, why did my city go up in flames? Why was the factory my dad worked in that employed all of these other people, that created, why was it closing? [MUSIC] But really I found I was just pulled into this area of cities or urbanism, so I really began to study urbanism in college, at Rutgers College, where I went. And I moved to Pittsburg, Pennsylvania in the mid 1980s, and in Pittsburg, as you may know, experienced dramatic deindustrialization. If my father's factory closed in Newark, Pittsburg saw its steel factories, and electrical factories, and chemical factories shut down, hundreds of thousands of people thrown out of work. So I began to try to grapple with, how would Pittsburg come back? And at the time, Pittsburg was investing a lot in high technology industries but what was happening is the companies we were creating were moving to the San Francisco Bay area, the so called Silicon Valley. [MUSIC] So I began to piece together what was going on, and what I came to conclude is it's not simply where business is located, and where jobs are created that drives our economy, it's why people, like all of us, like all of you, why do we choose to live in cities? So, I wrote a book about this, I called it The Rise of the Creative Class, trying to piece together what this change was in our society. What I tried to do is take this notion that we're moving form an industrial economy, and I tried to fuse this with the notion that Jane Jacobs wrote about, that it was not just firms and industries that drove our economy, it was cities. Why do cities matter? People said with the rise of this technologically advanced world, geography was no longer important, the Economist Magazine wrote about the death of distance, but in a global, technologically advanced world, the fact of the matter is that cities are more important now than ever before. If we look at economic output, 90% of economic output, in an advanced country comes from cities and metropolitan areas. Across the world, just the 40 largest mega regions are greater Tokyo, the area from Shanghai to Beijing, Mumbai to Bangalore, the New York coast and Washington port produce two thirds of all economic output, so cities are important because they are the place that people live and economic output is produced. [MUSIC] There's a very famous economist, who won a Nobel Prize, probably one of the most brilliant economic minds ever, his name is Robert Lucas, and when he accepted that Nobel Prize for his work on the financial markets, and rational expectations, how we make decisions, he wrote an essay, and that essay was called On the Mechanics of Economic Development. So basically, what are the mechanics, the underlying driving forces that build our economy and society, and in that essay, which he published on receiving the Nobel Prize, he said, I'm going to look at this through the lens of not other Nobel prize wining economists, I'm going to look at this through the lens of a great woman named Jane Jacobs. And I asked Jane, I asked her when I got to know her, what do you think was the most important discovery you've made in your life? And she was such a humble person, she was in her 80s, and she said, Richard, I think I've figured out something that has puzzled many economists, economists believe that what powers the economy are companies, companies that make products more cheaply. It's a remarkable insight, she said that's not a theory of economic growth, if you want to understand where economic growth in a middle class and rising living standards come from, you have to understand where innovation comes from. Now, a company may make an innovation, Apple invented the modern computer, and then the iPhone, we could go on, but where innovation really comes from is from talented people and companies, a diverse mix of people and companies, clustered in a dense city. When Jane Jacobs thought of this idea that the clustering of people in dense areas, diverse groups of people, she actually discovered it by studying her one little neighborhood in New York's Greenwich Village around Hudson Street. I think for a while people thought, who is this woman? She's not a professor, she doesn't have a PhD, she's not in a university, but a number of us, a number of social scientists, economists, began to look back at her work, and what Lucas says, he formalized her insight about clustering, and what he said is so interesting. He said, what really drives economic growth isn't simply the clustering of companies in a location, it isn't just the fact that startups are concentrated, it's not the fact that there's natural resources. He said, what Jane Jacobs, this woman, had identified, was when people, when you and I, our families and friends, locate in a city, in a neighborhood, we make each other more productive, we actually cause each other to innovate, we push each other, you know, like artists challenging each other, who's the best? Musicians challenging each other, who's the best? Technologists, and he called this, a fancy term, a human capital eternality, what that means, unpacked, is that when people come together, human capital, people, we create an external economy, we create an effect which is bigger than the sum of our parts. And he said, this is a Jane Jacobs externality and this effect that people clustering was the single most important driver of economic growth. So really when we think about our economic growth today, regardless of where we live, if we live in an advanced country, or a big city, or a small city, or a suburb, the real motor force of where our growth and rising living standards, bigger middle class, better life, is going to come from is from us living together in our communities and cities and making each other more productive. [MUSIC]
