Cities, jobs and talent

Distribute development Spreading jobs wide can help equitable growth (Above) Cyber Towers in Hyderabad’s Cyberabad

Can a new landscape where jobs follow people rather than the other way round become a reality?

Why is Bangalore the software capital of India? Why is Amsterdam such a creative hub? Is it because top talent is concentrated in these places? Did companies set up base in these cities because the talent was there? Or because people followed jobs?

This has been an eternal question confronting urban studies researchers and economists. The traditional construct has been that people follow jobs. Indeed, in many cities, such as Gurugram, it’s certainly the case. People moved to this otherwise nondescript town only because it gave huge incentives to companies to set up shop here, and lucrative jobs got created.

But a growing school of thought is that the reverse needs to happen – jobs need to follow people. For this, cities have to provide education and facilities. Urban planners argue that if a city can boast a young, educated workforce, corporates would love to relocate, and it would remove much of the geographic inequality in terms of jobs being clustered in one city.

Harvard professor Edward Glaesner who has analysed why some cities succeed while others fail in his marvellous book Triumph of the City is one such. Urban studies theorist Richard Florida, who authored the books The Rise of The Creative Class and Cities and the Creative Class is a proponent of this paradigm as well. He says the creative class – and he clubs knowledge workers, professional workers and media along with artists, musicians, designers and performers – can pick where they want to live and create and attract companies.

Today many tech startups do launch in places where they know the requisite talent exists. But in manufacturing, people have to move to where the factories are.

Now a new study published in the journal Regional Studies, a global forum for city and regional research development, sets out to cast fresh light on this subject. The study conducted by a team of economists led by Stein Ostbye of Arctic University, Norway surveyed growth of jobs as well as growth of population in 250 regions across Sweden, Norway and Finland and whether job density (availability of jobs) attracts people or vice versa.

The takeaway is as expected – both happen! If you map the entire economy, people seem to follow jobs. But when it comes to high-paying knowledge jobs that drive innovation, jobs follow people.

Why are economists engaged in such research at all? Well, workforce development researchers and urban planners would like to see more jobs distributed across regions. And find a way to revive the fortunes of cities such as Detroit or Kolkata. As connected cars arrive, can Detroit get technologists to flock there and revive its fortunes? Also, the way China has virtually manufactured cities has proven that new temples of job creation can come about.

By reviewing city development with an eye on job creation, can the inequality really be removed? All things being equal, both people and jobs are attracted to places with good weather and an active cultural scene. Then, again, as a recent article in the BBC points out, the arrival of air-conditioning changed that, as the growth of Dubai and Singapore shows. As we transition from the industrial era to the digital, the world could well move to a jobs-follow-people paradigm.

Published on June 07, 2017


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