Originally posted on The Horizons Tracker.
The concentration of talent in cities is a topic I’ve touched upon numerous times over the past year or so, with there being evident challenges presented by the benefits of gathering talent into cities set against the harm that causes to smaller communities who find themselves relegated to second place.
This regional inequality has been a major talking point in the various political ructions seen in recent years, and there has been an understandable desire to spread talent and opportunity more equitably around the country. A new study1 from Princeton University suggests that such efforts may be fundamentally misguided, and countries would fare better if they attempted to support the emergence of ‘cognitive hubs’.
The study argues that workers operating in highly complex and cognitive roles work best when they’re clustered together in the same place. By spreading them around, it would waste the talent they have, with significant consequences for the productivity of the nation.
So, rather than encouraging people to live and work in places that diminish their capabilities, they argue that the inequality this concentration of talent brings is better addressed by taxes that subsidise the lower-paid workers in the smaller towns and rural areas. They suggest that a Universal Basic Income may be just the right approach, and believe a transfer of around $17,000 per high-skilled worker would be ideal.
The issue came to the fore during the 2016 presidential election, with the 472 counties won by Hillary Clinton accounting for around 64% of GDP, thus easily outpacing the 2,584 counties won by Donald Trump.
It’s a problem replicated across the developed world, with a polarization between urban and rural areas evident in numerous countries. It’s especially prominent in economies that are largely skills based, but policies aimed at spreading talent around the country is not the way ahead.
While the paper makes the argument for concentrating talent where it can achieve as much as possible, it doesn’t address the challenges for those communities left behind, whether that’s greater economic inequality or increased racial segregation.
Given the intense political repercussions however, it’s likely to be a topic that attracts a great deal more attention in the coming years. This attention is most definitely welcome, although I suspect an easy answer is not likely to be forthcoming.
Article source: Should The Brightest Talent Coalesce In ‘Cognitive Hubs’?
- Rossi-Hansberg, E., Sarte, P. D., & Schwartzman, F. (2019). Cognitive hubs and spatial redistribution (No. w26267). National Bureau of Economic Research. ↩