I am a strong believer in Globalization. The importance of free trade was observed already by David Ricardo and the mechanisms of optimal wealth allocation was discovered by Vilfredo Pareto. According to Pareto efficiency, globalization brings wealth, as the global economy becomes even more efficient and traversing the spectrum toward Pareto-optimal resource and wealth allocation.
Sure, there will be painful changes as the economies adapt, as is experienced in Greece, Spain and Italy among other European countries in the recent year and gradually in the entire western world in the recent decade, but this is all the pain of transition, not necessarily the pain of long term decline.
I like economic theory. As we all know, theory is a simplified image of reality that allows us to deduct conclusions which would otherwise be far more complex to understand without the simplification of economics. Thus said, it is important to mention that much of economic theory, especially financial economics, is built on not-so-solid observations and then strong conclusions may be fundamentally wrong to make. See my earlier blog post about the recent economic crises and “Margin Call” for an example. Yet, even if we cannot be certain, economic theory can show us the forces and direction of development.
It is a mantra of the age of globalization and economic theory that it does not matter where we live. We can innovate just as easily from a ski chalet in Aspen or a villa in Provence as in the office of a Silicon Valley start-up. Already in 1997 I was online using my mobile for calls and data and I could participate in meetings in New Jersey and Brussels while taking a pleasant casual stroll on Plaza Major in Madrid. At least pleasant until a dog started chasing me and Sam Valanju, the CIO of the multinational American corporation chairing the call asked me why we had a dog in the office…
However according to Richard Florida, this is wrong. Globalization is not flattening the world; in fact, place is increasingly relevant to the global economy and to our individual lives.
Recently I have started to think Richard Florida might be right.
Where we live determines the jobs we find and the careers we have access to, the people we meet and the spouse we mate. Everything we think we know about location, cities and their economic roles is suddenly up for grabs.
In the book Who’s Your City? Richard Florida offers the first available city rankings by life-stage, rating the best places for singles, families, and empty-nesters to reside. Florida’s insights and data provide an essential guide for the more than 40 million Americans who move each year, illuminating everything from what those choices mean for our everyday lives to how we should go about making them.
As the author writes: “The choice of where to live is not an arbitrary one. It is arguably the most important decision we make, as important as choosing a spouse or a career. In fact, place exerts powerful influence over the jobs and careers we have access to, the people we meet and our ‘mating markets’ and our ability to lead happy and fulfilled lives.”
To follow on Florida’s thesis, Monocle Magazine put out the Quality of Life survey, and the result is the 25 most livable cities in the world. Most of the ‘livable’ cities are unsurprisingly located in Europe, where Helsinki, Finland, rank #1. The only South Asia’s city included in the list is Singapore, which dropped from 18th last year to 21. Monocle also advise Singapore to devote more money into culture and creativity instead of casinos and shopping malls.
It is exiting to think new thoughts, yet it will bring me personal comfort to return home tonight to my little village in Provence-Alpes-Maritimes. The big cities were exiting to live in, they are exiting to work in and next week I will go to the biggest metropol of them all; New York. My strongest memory of New York was a visit in 1999 to the cinema that was then located below MOMA (Museum of Modern Art) where we watched David Leans directors cut of Lawrence of Arabia, including the initial music overture. On a seat next to me sat Woody Allen. Such moments are rare in smaller places.