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I finally read Enrico Moretti's "The New Geography of Jobs" this week. It was better than I expected - both a good introduction to the topic and interesting details and research results that kept me engaged.
Stylistically, he does an impressive job hewing close to the research results while avoiding jargon and identification strategies. It's a clear, coherent narrative about city growth and decline, with lots of evidence at each step in the argument.
TL;DR: Industry clusters go through a life-cycle. A newborn technology is scattered. It coheres in 3 or 4 clusters, with stars, VCs, or other key factors as coordination points. Rapid employment, productivity, and wage growth follow.
As the cluster matures, the well-known production processes can be imitated elsewhere (especially lower-wage countries) and the rents competed away. Eventually, an industry can decline, which is painful and can lead to a large drop in local real wages. (#Rochester shoutout)
The healthiest cities are constantly growing new clusters and have a lot of human capital to make innovation work.
He clearly disagrees with Richard Florida (and Florida, to his credit, has really modified his views). Moretti uses Berlin as an example of a cultural capital nonpareil that has not had economic growth follow.
He maintains (quite logically, in my view) that culture follows economic strength, not vice versa. Moretti has a dim-but-not-damning view of place-based policies. It's hard to pick winners!
Moretti's "policy chapter" at the end is boring in the sense that it's the same policies for economic growth that everyone else has: better K-12 education (he focuses on high school) and more high-skill immigration.
It's a sign of how rapidly #YIMBY has happened that Moretti didn't include local land use deregulation as a major plank in his policy agenda (in 2012). He has since embraced it, and land use crops up in the book several times.
