Skip directly to content

Location is important in terms of economic recovery

While the economic recovery continues at a slow pace, a recent NPR story shows the important role that geographical location has played. NPR talked with Enrico Moretti of the University of California-Berkeley, the author of "The New Geography Of Jobs." He explains how particular cities, including San Francisco, Seattle and Boston, have experienced positive economic growth despite the sluggish improvement of the economy overall. 

What distinguishes these cities from others? Moretti emphasizes that all of them are innovation hubs, where IT, software, science research, marketing companies and financial firms fuel growth.

Cities that are struggling are manufacturing hubs, including Detroit, Cleveland and Flint, Michigan. Moretti explains that you can sometimes earn double the income as a waiter in Austin than in Flint. Similar salary differences exist among architects, real estate agents and other professionals. 

Education is another important factor. In a special for CNN, Moretti writes: "Over the past three decades, cities with many college-educated workers and innovative employers started attracting more of the same, and cities with a less educated workforce and less innovative employers started losing ground."

The major factor driving the success of innovation hubs has been the high-quality of education in the surrounding area. One takeaway from the success of these cities, Moretti asserts, is the connection between investment in education and economic growth.

While this does not mean that everyone should immediately move to one of these innovation hubs, the findings do showcase the importance, both for businesses and employees, to consider geography and education.