A Recipe for The New American City

A Recipe for The New American City

What city is home to the best-paid lawyers in the United States?

No, not New York or Washington, D.C. It’s San Jose, California.

Where’s the best place to be a waiter? Again, not in LA or NYC. Las Vegas leads, followed closely by San Francisco, Seattle, Boston, and Washington. Raleigh-Durham, San Diego and Austin are also in the top ten. These same cities lead salary rankings among hairstylists, barbers, and cooks.

What’s the common thread? These cities are the capitals of American innovation. They’re also now the engines of the US economy.

Enrico Moretti provides these, and many more, proof points in The New Geography of Jobs, in which the Stanford University builds a case for why the United States’ economic future lies in building  an innovation economy.

According to Moretti, one job in the high technology sector creates five other jobs in the local economy. That’s a much higher impact than in manufacturing, which only creates 1.6 jobs beyond its direct employment.

Where you live may  now  be even more important to your salary than what you learn. High school graduates in Stamford, Connecticut make $50,000 more a year than college graduates do in Yuma, Arizona.

What’s behind the trend?

Companies in the innovation sector pay well (Microsoft’s average wage is $170,000), which means employees have a lot more money to spend on services around town. These companies also draw on a wide variety of services, from graphic design to lawyers to yoga instructors.

Innovation is also local. Despite predictions of the death of cities at the dawn of the internet, it turns out that innovation and technology is urban. Cities (and neighborhoods) are more important in the innovation economy, not less.

So, what to do to build the innovation city? Focus on great education, encourage partnerships between colleges and universities and the private sector, make sure digital infrastructure is widely accessible, and invest in transit and  urban design that attracts young, creative people who will build companies. Do all that, and you’ll  benefit the entire economy of lawyers, waiters and yoga instructors. And you’ll be home to some pretty good barbers, too.