Guest blog from Economics Editor Peter Coy
I’ve been scrounging around lately for evidence to make a case for optimism. It’s for a double issue in August. Just found a great example today. Hat tip to Greg Mankiw for pointing out this article called “The Reinventive City” in the Manhattan Institute’s City Journal by Mankiw’s Harvard colleague Edward Glaeser.
Glaeser’s lead anecdote concerns New York City’s billionaire mayor, Michael Bloomberg, whose rise to fame and fortune began when he was fired by Salomon Brothers in the recession year of 1981. As we all know by now, Bloomberg parlayed his $10 million severance check and the abundance of computer savvy he picked up on the job into the omnipresent financial-information company known as Bloomberg.
Here’s how Glaeser puts it:
Despite being a continent away from Silicon Valley, Bloomberg created his own computer firm. New York had provided him with the critical requirements for entrepreneurship: skilled workers, financing, access to customers, and knowledge.
The success of Bloomberg’s company reflects the great advantages of being in New York even during a recession. Today, Gotham’s strengths—competition, diversity, access to the world, and, most of all, human capital, made even more potent through proximity—will enable the city to reinvent itself, as it has done several times in the past, and survive the current economic storm.
For a guy who works in Cambridge, Mass., and presumably roots for the Red Sox, Glaeser writes a pretty good love letter to New York. He’s got wonderful stories about the China trade, the garment industry, the invention of the Xerox machine, etc., etc., right up to the present. Says Glaeser:
New York will continue to have a comparative advantage at producing ideas. That advantage occurs because big cities are, at their heart, the absence of distance between people and firms. Talent, whether painterly or financial, gets magnified because of urban concentration. Cities thrive by connecting people.
Michael Bloomberg might never have gotten where he is today if it hadn’t been for the severe recession of the early 1980s. Who knows what world-changing companies will be launched—perhaps right in New York City—because of the current crisis?
P.S.: That cover image is from a cover package that BusinessWeek put together in the aftermath of the Sept. 11, 2001, terror attacks that destroyed the World Trade Center.