Schmidt on the Role of Cities

By Ryan McGreal
Published December 08, 2011

As a speaker at LeWeb'11, Google executive chairperson Eric Schmidt spoke candidly and expansively about a large swath of issues related to technology, politics, civic engagement, and business.

At one point, Schmidt spoke about the role of cities in fostering innovation and economic development (you can jump straight to that section of the video):

One of the most important things, I think, is that Silicon Valley needs a competitor. Competition is good, and Silicon Valley has shown a model of innovation around technology and the kinds of things that we're talking about. And there's a number of cities ... that have the possibility of being a significant competitor.

Now why do I say, 'cities'? After all, the Bay area is largely a suburb. Well, today, entrepreneurship tends to break out young, because people have less to lose, if you will. They tend to be current and perhaps more risk-seeking. They have less of a family commitment or what have you because of the stage of life that they're in. And those people tend to prefer cities.

There's also a lot of evidence in the United States - and I think it's always been true in Europe - that the cultural vibrancy, the diversity of opinion, the diversity of people, the tolerance of different religions - all of those things tend to produce stronger human organizations, and that you're more likely to get a diverse point of view, both in terms of creativity and engineering, in cities.

Cities that recognize and cultivate this will reap the benefits in job creation and economic development.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan wrote a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. His articles have also been published in The Walrus, HuffPost and Behind the Numbers. He maintains a personal website, has been known to share passing thoughts on Twitter and Facebook, and posts the occasional cat photo on Instagram.


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By RB (registered) | Posted December 08, 2011 at 14:47:20

So places that have "cultural vibrancy, the diversity of opinion, the diversity of people, the tolerance of different religions" will "will reap the benefits in job creation and economic development"... like China?

They have job creation & economic development... how they're doing with "cultural vibrancy, the diversity of opinion, the diversity of people, the tolerance of different religions"? I realize that there is some diversity in that country, but let's not kid ourselves into thinking that they have a fraction of the diversity that we have...

Now I'm no economist, and I know there are smarter people here than me, so maybe they can elaborate, but I've never understood how "diversity, vibrancy & religious tolerance" automatically equals "economic development". Can someone explain?

It just seems to me people state that diversity & tolerance are name dropped as the keys to economic development... I do know that there was a lot of economic development in Britain during the Industrial Revolution.. was there also a lot of "diversity & religious tolerance" there at that time?

Same with Japan.. they've been a pretty homogeneous society for some time, and I'm pretty sure they're not a Third World country... so how does this criteria apply to them?

Am I completely missing something here? I've been reading financial statements for 6+ hours and forgot breakfast this morning, so I might not be thinking straight, either!

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By d.knox (registered) | Posted December 08, 2011 at 17:58:45 in reply to Comment 72024

I was curious, so I looked this up. Obviously a somewhat out of date study, and only one, but still, interesting.

Cultural Diversity and Economic Development: A Cross‐National Study of 98 Countries, 1960–1985 Brad Lian and John R. Oneal Economic Development and Cultural Change Vol. 46, No. 1 (October 1997), pp. 61-77

I'll summarize: assessed CD on variety of measures, (ethnic, linguistic, religious) controlled for significant influences. Conclusion: "Ethnic, linguistic, and religious differences are not significantly related to the growth rate in GDP per capita."

Is there an indirect influence considering stability in particular? (tested by regressing several measures of instability on indicators of cultural diversity) Conclusion: no relationship. "Economic and political factors provide a much better explanation than does the diversity of the polity."

"Finally, we considered whether political fragmentation is related to economic development." Conclusion: Nope.

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By RB (registered) | Posted December 12, 2011 at 13:01:53 in reply to Comment 72033

Hey! Thanks for the eye-opener, d.knox!

I always found that "correlation" kind of odd.

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By Undustrial (registered) - website | Posted December 08, 2011 at 22:06:38 in reply to Comment 72033

Speaking from a slightly broader perspective, this kind of cross-cultural interaction has always been one of the primary drivers of societal change and evolution. I don't know if it would show up in year-to-year correlations based on location and demographics, but where would modern technology, business, music, art or warfare be without it?

In any case, because of the broad disparities in wealth encountered along these lines - whether it's immigrants, indigenous societies or people of colour - this will always be hard to detect on balance sheets. Rap music may have come out of neighbourhoods like Harlem or Compton - but if you looked only at the balance sheets, you'd think it was mostly a suburban phenomena.

As for the two examples given so far, they're probably a better description of prominent national stereotypes than history or economics. China's been trading with other continents for at least a millenium, especially at times of foreign control (Mongol, British etc). Since the Nixon Era, they've been one of America's most important allies and trading partners, having an enormous cultural impact on both nations. Beyond this, within China, there's a lot of ethnic, linguistic and cultural differences. Japan's been even more integrated with the western world since the end of the Second World War and beginning of the American occupation.

Cities are where this happens. Look at Spain before the Inquisition, or the Parisian suburb of Montmartre a century ago. Look at New Orleans or New York or Hong Kong. Look at the rise of modern math, banking or music. None of modern civilization could have risen in a vacuum - and that's been true for thousands of years.

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