Sunday, June 09, 2013

Three links on cities as enormously productive, and predictable, social organizations

Cities, as forms of human settlement that are becoming increasingly dominant across the world, have been on my mind recently. I wanted to share with our readers three papers of interest regarding the structure and importance of cities, economically and demographically.

The first paper I came across via via blogger James Nicoll. The 2007 article in the Proceedings of the National Academy of the Sciences, "Growth, innovation, scaling, and the pace of life in cities", by Luís M. A. Bettencourt, José Lobo, Dirk Helbing, Christian Kühnert, and Geoffrey B. West, argues for the existence of structured urban hierarchies.

Humanity has just crossed a major landmark in its history with the majority of people now living in cities . The present worldwide trend toward urbanization is intimately related to economic development and to profound changes in social organization, land use, and patterns of human behavior. The demographic scale of these changes is unprecedented and will lead to important but as of yet poorly understood impacts on the global environment. In 2000, >70% of the population in developed countries lived in cities compared with ≈40% in developing countries. Cities occupied a mere 0.3% of the total land area but ≈3% of arable land. By 2030, the urban population of developing countries is expected to more than double to ≈4 billion, with an estimated 3-fold increase in occupancy of land area, whereas in developed countries it may still increase by as much as 20%. Paralleling this global urban expansion, there is the necessity for a sustainability transition toward a stable total human population, together with a rise in living standards and the establishment of long-term balances between human development needs and the planet's environmental limits. Thus, a major challenge worldwide is to understand and predict how changes in social organization and dynamics resulting from urbanization will impact the interactions between nature and society.

The increasing concentration of people in cities presents both opportunities and challenges toward future scenarios of sustainable development. On the one hand, cities make possible economies of scale in infrastructure and facilitate the optimized delivery of social services, such as education, health care, and efficient governance. Other impacts, however, arise because of human adaptation to urban living. They can be direct, resulting from obvious changes in land use [e.g., urban heat island effects and increased green house gas emissions ] or indirect, following from changes in consumption and human behavior, already emphasized in classical work by Simmel and Wirth in urban sociology and by Milgram in psychology. An important result of urbanization is also an increased division of labor and the growth of occupations geared toward innovation and wealth creation. The features common to this set of impacts are that they are open-ended and involve permanent adaptation, whereas their environmental implications are ambivalent, aggravating stresses on natural environments in some cases and creating the conditions for sustainable solutions in others.

These unfolding complex demographic and social trends make it clear that the quantitative understanding of human social organization and dynamics in cities is a major piece of the puzzle toward navigating successfully a transition to sustainability. However, despite much historical evidence that cities are the principal engines of innovation and economic growth, a quantitative, predictive theory for understanding their dynamics and organization and estimating their future trajectory and stability remains elusive. Significant obstacles toward this goal are the immense diversity of human activity and organization and an enormous range of geographic factors. Nevertheless, there is strong evidence of quantitative regularities in the increases in economic opportunities, rates of innovation, and pace of life observed between smaller towns and larger cities.

In this work, we show that the social organization and dynamics relating urbanization to economic development and knowledge creation, among other social activities, are very general and appear as nontrivial quantitative regularities common to all cities, across urban systems. We present an extensive body of empirical evidence showing that important demographic, socioeconomic, and behavioral urban indicators are, on average, scaling functions of city size that are quantitatively consistent across different nations and times [note that the much studied “Zipf's law” for the rank–size distribution of urban populations is just one example of the many scaling relationships presented in this work]. The most thorough evidence at present is for the U.S., where extensive reliable data across a wide variety of indicators span many decades. In addition, we show that other nations, including China and European countries, display particular scaling relationships consistent with those in the U.S.

Via The Atlantic Cities' Emily Badger, meanwhile, I came across "Urban characteristics attributable to density-driven tie formation". Authored by Wei Pan, Gourab Ghoshal, Coco Krumme, Manuel Cebrian, and Alex Pentland, and originally presented in June 2012, the paper makes some interesting claims.

In this paper we propose social tie density (the density of active social ties between city residents) as a key determinant behind the global social structure and flow of information between individuals. Based on this we have described an empirically grounded generative model of social tie density to account for the observed scaling behavior of city indicators as a function of population density.

The model predicts that social tie density scales super-linearly with population density, while naturally accounting for the narrow band of scaling exponents empirically observed across multiple features and different geographies. We note that this is achieved without the need to recourse to parameter tuning or assumptions about modularity, social hierarchies, specialization, or similar social constructs. We therefore suggest that population density, rather than population size per se, is at the root of the extraordinary nature of urban centers. As a single example, metropolitan Tokyo has roughly the same population as Siberia while showing remarkable variance in criminal profile, energy usage, and economic productivity.

We provide empirical evidence based on studies of indicators in European and American cities (both categories representing comparable economic development), demonstrating that density is a superior metric than population size in explaining various urban indicators.

Our argument suggests that the reasons for creating cities are not that different from creating work environments like research institutions. While current technology makes remote communication and collaboration extremely easy and convenient, the importance of packing people physically close within each other is still widely emphasized. We argue that cities are operating under the same principle|as a consequence of proximity and easy face-to-face access between individuals, communication and ultimately productivity is greatly enhanced.

We of course note certain caveats and limitations of our study. The density of social ties is intrinsically a function of the ease of access between residents living in the same city. Consider the example of Beijing in China, which has a very high population density. Due to its traffic jams, Beijing currently is de-facto divided into many smaller cities with limited transportation capacities between them and consequently may not demonstrate a higher social tie density than other cities with a much lower population density. Thus a direct comparison of the model predictions with a similarly dense area such as Manhattan is not feasible.

[. . . ]

A number of theories of urban growth suggest the importance of specialist service industries, or high-value-add workers, as generative models of city development. While our model does not disprove these theories, it provides a plausible and empirically-grounded model that does not require the presence of these special social structures. The other theories must therefore appeal to different sorts of data in order to support their claims. Cities are one of most exceptional and enduring of human inventions. Most great cities are exceptions in their own right: a New Yorker feels out of place in Los Angeles, Paris, or Shanghai. However, this exceptionalism may be more due to our attention to human-scale details than tothe underlying structures. In this paper we have presented a generative theory that accounts for observed scaling in urban growth as a function of social tie density and the diffusion of information across those ties. It is our hope that this provides both a foundation for the commonalities across all cities and a beginning point for which divergence between specifc cities can be explored.

In Badger's interview, Pan suggests that the enormous benefits of urban life start to flatten out once urban areas pass the 40 million mark.

What might this mean? Well, via io9, I came across the April 2012 McKinsey Global Institute report"Urban America: US cities in the global economy", by authors James Manyika, Jaana Remes, Richard Dobbs, Javier Orellana and Fabian Schaer. It makes the claim that the United States is uniquely highly urbanized, and hence uniquely prosperous.

Today, large US cities have more weight in the US economy than do large cities in any other major region. In 2010, 259 large US cities generated almost 85 percent of US GDP. During the same period, large cities in Western Europe accounted for less than 65 percent of the region’s GDP. Among emerging regions, metropolitan China accounted for 78 percent of China’s GDP and the large cities of Latin America contributed 76 percent to regional GDP.

Large US cities have such relative economic weight for two reasons. First, they are home to 80 percent of the population compared with less than 60 percent in Western Europe. Second, they have a relatively high per capita GDP premium. The average per capita GDP of large US cities is almost 35 percent higher than in smaller cities and rural areas; in Western Europe, this premium is about 30 percent.

The relative weight of different regions in the world economy changes when we home in on the economic clout of their large cities. Even though Western Europe’s GDP exceeded that of the United States by nearly 10 percent in 2010, the combined GDP of large US cities exceeds that of large Western European cities by more than 20 percent.

It is America’s cities that explain why the United States continues to enjoy higher per capita GDP than Europe. The higher share of US urbanites—and the fact that they command a larger per capita GDP premium over US smaller towns and rural areas than do their European counterparts—explains three-quarters of the per capita GDP gap between the two economies.

The nation’s largest and well-known megacities of New York, New York, and Los Angeles, California, will continue to prosper. New York is on course to remain the second-largest city by GDP in the world in 2025, and Los Angeles to rise from sixth place today to become the fourth-largest city. But the weight of these megacities in the US economy is not decisive to the overall importance of cities in the United States. London and Paris have a smaller share of the overall Western European population—6 percent, compared with the combined population of the US megacities of 10 percent of the total US population—but they enjoy a significantly higher per capita GDP premium than their US counterparts. Paris and London contribute 9 percent to Western Europe’s overall GDP, compared with the 13 percent contributed by New York and Los Angeles.

Instead, the true vigor of America’s urban economy comes from a broad base of dynamic middleweights and the relatively high per capita GDP they achieve. There are just over 255 middleweight cities in the United States, compared with just over 180 in Europe. And they generate more than 70 percent of US GDP today, compared with just over 50 percent in Western Europe. In fact, the top 28 US middleweights alone contribute more than 35 percent of US GDP. The dynamism of middleweights in the United States is a characteristic of today’s global urban expansion, making them an interesting group to understand for both US and global growth prospects.


I do wonder whether comparing the United States to western Europe was the best thing to do, not least since despite western Europe's integration within the European Union the region's nation-states and their frontiers are still quite relevant. The argument doesn't seem immediately implausible, though, and has obvious implications on regional population balances within the European Union and its various member-states (and between the member-states). Should Europeans, for instance, try to promote increased urbanization and the growth of large cities to compensate for shrinking workforces? What of other world regions?

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