The indispensable asset in a knowledge economy is smart people. Cities are places where people build knowledge through education and experience. Cities attract smart people and create opportunities for them to develop and apply what they know. Talent, which we measure by educational attainment, the number of creative professionals, the migration of well-educated young adults and the number of foreignborn college graduates, reveals the underlying intellectual capital a region can draw on to build its economy and to weather the inevitable shocks of competition and change
The ability to generate new ideas and to turn those ideas into reality is a critical source of competitive advantage not just for businesses but for regions, as well. Economies and regions advance by a process of trial and error. Those places that generate many trials of novel products and services are most likely to move ahead. Invisible and weightless, ideas can’t be measured directly, but the footprints they leave in the economic landscape can be traced by counting numbers of patents, the dollar value of venture capital investments, the extent of personal entrepreneurship and the number of small businesses.
Cities thrive as places where people can easily interact and connect. These connections are of two sorts: the easy interaction of local residents and easy connections to the rest of the world. Both internal and external connections are important. Internal connections help promote the creation of new ideas and make cities work better for their residents. External connections enable people and businesses to tap into the global economy. We measure the local connectedness of cities by looking at a diverse array of factors including voting, community involvement, economic integration and transit use. Our measures of external connections include foreign travel, the presence of foreign students and broadband Internet use.
The unique characteristics of place may be the only truly defensible source of competitive advantage for regions. In a world of global competition, a strategy of “pretty much the same, maybe cheaper” is a recipe for mediocrity and economic stagnation. Our measures of distinctiveness are inherently incomplete. Every city has its own unique characteristics for which there are few, if any, statistics. We offer some initial measures of distinctiveness drawn from market data about consumer behavior and its variance across U.S. metropolitan areas