September 12, 2003
Joel Kotkin On The Shift Away From The Old Big Cities

Joel Kotkin, author of The New Geography: How the Digital Revolution Is Reshaping the American Landscape, has an article in the Washington Post on how the digital communications revolution is undermining the position of the old large cities and leading to a shift of skilled workers to smaller, lower cost, more comfortable, and safer cities.

But the most recent demographic trends show a massive exodus from these same centers. Between 2000 and 2002, for example, more than 300,000 more Americans left New York City than moved in, among the highest rates of outflow in the nation. (Though the city's population saw a small uptick in 2002, this was due chiefly to immigration and births.) Even worse was the outflow from San Francisco, which was nearly 50 percent higher, adjusting for the city's smaller population, than New York's. This is part of a broader trend; in 2002 migration out of large metropolitan areas reached the highest level since the mid-1990s, driven largely by the escalating cost of housing.

The greatest beneficiaries of the demographic shift have been the cities of the South and West, such as Phoenix and San Antonio. But a surprising development has been the gradual slowing, and even reversal, of flight from the Midwest, which was a virtual torrent several decades ago. Today more Americans are moving into cities in the heartland -- such as Fargo, Des Moines, Columbus and Indianapolis -- than are moving out. Even cities like St. Louis, which people have been leaving in massive numbers since the 1960s, are now approaching an equilibrium among domestic migrants.

Individuals who can work wherever they can get a fast internet connection are going to choose their residences increasingly based on lifestyle choices. Companies that have more connections to companies all over the world than they do to other companies in any one city are going to choose their headquarters locations more based on costs and the appeal of the locations to prospective workers and less based on the size or types of industry in any city.

The major remaining advantage of a large metropolitan area for an employer is the labor force. But if a company can find an appropriate labor force in a smaller city or if it can recruit people who are willing to move to the smaller city then the need for the large metropolitan area declines even further. Plus, if the company is outsourcing functions to India or to other businesses then it has less of a need for such a large assortment of workers with different speciality skills found in the biggest metropolitan areas. Even if a particular function is kept in-house the need to co-locate all functions that used to be assocated with a head office has declined with the declining cost of communication and transportation. The marketing department doesn't need to be in the same city as the information technology department. Even the IT department can make use of specialists located in other cities and towns who log on remotely when their specialty skills are needed.

You can find out more about Kotkin's book at his website.

Share |      Randall Parker, 2003 September 12 12:41 PM  Trends Demographic

Zack Lynch said at September 16, 2003 12:49 PM:

Well Joel must have read my Master's thesis I wrote in 1997 at UCLA in Economic Geography. Still trying to get it on-line (stuck on an old, old mac).

When I do get it on-line I'll prove it :)

Name: Lynch, Zachary Joseph
Title: Telematics and the Internet : transforming communication and commerce at the end of the twentieth century / by Zachary Joseph Lynch.
Published/distributed: 1997.
Physical description: viii, 92 leaves : ill. ; 28 cm.

Notes: Thesis (M.A.)--UCLA, 1997.
Includes bibliographical references.
Contents: Telematics and the global economy -- Internet and World Wide Web -- Electronic commerce -- Geographic implications of the Internet.

Subject(s): Telematics--Economic aspects.
Internet--Economic aspects.
Dissertations, Academic--UCLA--Geography.

Database control #: 07-AHH-4145

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