Geography Is Destiny

14 February 2007 at 10:55 am 1 comment

| Peter Klein |

When it comes to innovation, that is, writes Greg Zachary in Sunday’s New York Times. “[T]he inescapable lesson of the iPod, Google, eBay, Netflix and Silicon Valley in general is that where you live often trumps who you are.” Increasing returns and first-mover advantages — “debated in head-scratching terms by professional economists” — explain the geographic concentration of technology firms. (HT: Richard Florida)

No time for head scratching today, but I’ll throw this out for your consideration: I think the literature tends to overemphasize localization economies as a source of increasing returns, downplaying the gains from urbanization stressed by Jane Jacobs. Could this be because economists generally underappreciate the importance of uncertainty, experimentation, and serendipitous discovery, preferring to stick with equilibrium models of endogenous growth?

Here’s more on Jacobs from Richard Florida and from Lynne Kiesling.

Update: The Rockefeller Foundation has created a Jane Jacobs Medal.

Entry filed under: - Klein -, Entrepreneurship.

Which Economies do Economists Study? Religion and the Market

1 Comment Add your own

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Nicolai J. Foss | home | posts
Peter G. Klein | home | posts
Richard Langlois | home | posts
Lasse B. Lien | home | posts


Former Guests | posts


Recent Posts



Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

%d bloggers like this: