# 23.15 Unpacking and Measuring Urban Complexity Evidence from amenities in Paris

Calum Robertson, Raphaël Suire & Sylvain Dejean

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In this paper, we argue that a complexity-driven systemic perspective of urban life can be characterized through the consumption practices of people that interact within urban spaces, and that such a characterization can uncover relevant information for planners. We propose a granular analysis of commercial amenity networks within cities and adapt a measure of economic complexity to aptly reduce these networks. This yields the Amenity Complexity Index (ACI), which is the focus of this work. The ACI is interpretable in terms of consumption practices and of place characteristics, both from a macro city perspective and from a place-based granular perspective. The dynamic illustration of our complexity measure in Paris helps demonstrate ways in which the ACI can enrich our understanding of cities and of the transformative systemic challenges they face. Ultimately, this work proposes a measure and an accompanying interpretation of urban complexity based on commercial amenities that paves the way for novel analyses of the causes and effects of urban transformations, of urban policies, and of the wellbeing of dwellers.

# 20.41 Cities in a Post-COVID World

Richard Florida, Andrés Rodríguez-Pose & Michael Storper

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This paper examines the effect of the COVID-19 pandemic and its related economic, fiscal, social and political fallout on cities and metropolitan regions. We assess the effect of the pandemic on urban economic geography at the intra- and inter-regional geographic scales in the context of four main forces: the social scarring instilled by the pandemic; the lockdown as a forced experiment; the need to secure the urban built environment against future risks; and changes in the urban form and system. At the macro-geographic scale, we argue the pandemic is unlikely to significantly alter the winner-take-all economic geography and spatial inequality of the global city system. At the micro-geographic scale, however, we suggest that it may bring about a series of short-term and some longer-running social changes in the structure and morphology of cities, suburbs, and metropolitan regions. The durability and extent of these changes will depend on the timeline and length of the pandemic.

# 20.29 IMPACTS FROM AUTOMATION DIFFUSE LOCALLY – A NOVEL APPROACH TO ESTIMATE JOBS RISK IN US CITIES

Teresa Farinha

 

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Workers that become automated may transfer productivity gains to their co-workers or make it easier to automate their jobs too. In this paper, I empirically investigate how automatable jobs have diffused impacts to neighbouring jobs in North American cities between 2007 and 2016. Results indicate that jobs that share similarities with neighbouring high-risk jobs grew less, even when controlling for their own technical risk of automation. Conversely, jobs that share complementarities with neighbouring high-risk jobs grew faster, possibly indicating productivity gains from working with recently automated jobs. In addition to the analysis in this paper, I provide an adjusted index of job automation risk that accounts for local diffusion of impacts (negative and positive) in US cities.

# 20.24 Entrepreneurship and the fight against poverty in US Cities

Neil Lee & Andrés Rodríguez-Pose

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Entrepreneurship is sometimes portrayed as a cure-all solution for poverty reduction. Proponents argue it leads to job creation, higher incomes, and lower poverty rates in the cities in which it occurs. Others, by contrast, posit that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesise that the impact of entrepreneurship depends on whether it occurs in tradeable sectors – and, therefore, is more likely to have positive local multiplier effects – or non-tradable sectors, which may saturate local markets. We find that entrepreneurship in tradeables reduces poverty and increases incomes for non-entrepreneurs. The result is confirmed using an instrumental variable approach, employing the inheritance of entrepreneurial traits as an instrument. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty.

# 20.21 Hipsters vs. Geeks? Creative workers, STEM and innovation in US cities

Andrés Rodríguez-Pose and Neil Lee

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Innovation in cities is increasingly regarded as an outcome of two potential inputs: scientific activity and creativity. Recent research using firm level data has suggested that actually it might be the combination of these two inputs, rather than the mere presence of workers representing each group, which matters. Yet there is little evidence on whether this relationship holds using city level data in the case of the United States (US). This paper investigates this gap in our knowledge by examining how the combination of STEM (geeks) and creative workers (hipsters) in a panel of 290 US Metropolitan Statistical Areas during the period between 2005 and 2015 relates to city level innovation. The results indicate that, although the presence of STEM workers is a more important driver of innovation than that of creative ones, the most innovative cities are characterised by a combination of the two. Hence, current policies which tend to focus mainly on either STEM or creativity may be better targeted at ensuring interactions between the two.

# 20.18 Institutions and the fortunes of territories

Andrés Rodríguez-Pose

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Regions and cities face unceasing pressures to adapt in response to processes of globalisation, changes in industrial production, and new patterns of migration and trade. At the same time, the dominant development policies are proving less than capable of providing answers to these challenges. Strategies based on a mix of physical and human capital and technology have not succeeded in dealing with growing territorial inequality and its treacherous economic, social and political consequences. There is thus an urgent need to understand why territorial divergence occurs and why there is what seems to be a growing decline in the returns of public intervention targeting economic development. In search for answers, scholars have turned to the examination of institutions. But despite progress in our grasp of how institutions affect development, crucial knowledge gaps remain. This paper reviews recent progress in our understanding of the role of institutions for development, unveils the most important gaps, and proposes a series of avenues to improve how a better understanding of how institutions shape regional and urban development can lead to more efficient development policies.

# 20.10 Is innovation (increasingly) concentrated in large cities? An international comparison

Michael Fritsch and Michael Wyrwich

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We investigate the geographic concentration of patenting in large cities using a sample of 14 developed countries. There is wide dispersion of the share of patented inventions in large metropolitan areas. South Korea and the US are two extreme outliers where patenting is highly concentrated in large cities. We do not find any general trend that there is a geographic concentration of patents for the period 2000-2014. There is also no general trend that inventors in large cities have more patents than in rural areas (scaling). Hence, while agglomeration economies of large cities may offer advantages for innovation activities, the extent of these advantages is not very large. We conclude that popular theories over-emphasize the importance of large cities for innovation activities.

# 20.09 Does Successful Innovation Require Large Urban Areas? Germany as a Counterexample

Michael Fritsch and Michael Wyrwich

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Popular theories claim that innovation activities should be located in large cities because of more favorable environmental conditions that are absent in smaller cities or remote and rural areas. Germany provides a clear counterexample to such theories. We argue that a main force behind the geography of innovation in Germany is the country’s federal tradition that has shaped the settlement structure, the geographic distribution of universities and public research institutions, as well as local access to finance. Additional factors that may play a role in this respect are the system of education and the tax treatment of inheriting a business. We demonstrate the long-lasting effect of the historical political structure and distribution of knowledge sources on innovation activities today. We conclude that historical factors that shape the settlement structure and location of knowledge sources are of key importance for the geographic location of innovation activities.

# 20.05 The cost of weak institutions for innovation in China

Andrés Rodríguez-Pose and Min Zhang

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Does the variation in the quality of local government institutions affect the capacity of firms to innovate? This paper uses a unique dataset that combines the specific features of 2,700 firms with the institutional and socioeconomic characteristics of the 25 cities in China where they operate, in order to assess the extent to which institutional quality – measured across four dimensions: rule of law, government effectiveness, corruption, and regulatory quality – affects both the innovation probability and intensity of firms. The results of the econometric analysis show that poor institutional quality in urban China is an important barrier for firm-level innovation. In particular, a deficient rule of law, high corruption, and a weak regulatory quality strongly undermine firm-level innovation. The role of these factors is far more limited in the case of innovation intensity. Better institutions also reduce the amount of time firms spend dealing with government regulations in order to facilitate innovation. The results also indicate that the cost of weak institutions for innovation is higher for private than for state-owned firms, at least in the early stages of innovation. In general, differences in institutional quality generate local urban ecosystems that impinge on the propensity of firms to innovate.

# 19.14 Housing, urban growth and inequalities: The limits to deregulation and upzoning in reducing economic and spatial inequality

Andrés Rodríguez-Pose & Michael Storper

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Abstract: Urban economics and branches of mainstream economics – what we call the “housing as opportunity” school of thought – have been arguing that shortages of affordable housing in dense agglomerations represent a fundamental barrier for economic development. Housing shortages are considered to limit migration into thriving cities, curtailing their expansion potential, generating rising social and spatial inequalities, and inhibiting national growth. According to this dominant view within economics, relaxing zoning and other planning regulations in the most prosperous cities is crucial to unleash the economic potential of cities and nations and to facilitate within-country migration. In this article, we contend that the bulk of the claims of the housing as opportunity approach are fundamentally flawed and lead to simplistic and misguided policy recommendations. We posit that there is no clear and uncontroversial evidence that housing regulation is a principal source of differences in home availability or prices across cities. Blanket changes in zoning are unlikely to increase domestic migration or to increase affordability for lower- income households in prosperous regions. They would, however, increase gentrification within prosperous regions and would not appreciably decrease income inequality. In contrast to the housing models, we argue the basic motors of all these features of the economy are the current geography of employment, wages and skills.