Cities Will Be More Fragile, More Competitive, Than Ever Before

Manhattan's Midtown Offices Remain Largely Empty As Businesses Begin To Consider Returning

NEW YORK, NEW YORK - MARCH 04: (Photo by Spencer Platt/Getty Images) GETTY IMAGES

Downtowns across America have emptied during the COVID-19 pandemic, raising questions about their ability to survive the permanent shifts in work locations. At the same time, some cities are struggling with riots, homelessness, and high housing costs, described in my recent article Death Of A City: The Portland Story?

Although the end of the COVID-19 pandemic will help all cities, greater competition among cities means that poor governance will have worse impacts. The increased sensitivity of cities to competition was hinted at in that article. The full story is presented here: cities have grown more fragile to downside risks but will benefit more than ever before by good leadership and governance. The increased competition among cities results from the lesser importance of location in the modern economy as a result of long-standing trends as well as the new lessons of the pandemic.

The original economic reason for many cities’ existence was transportation. Locations on the sea were good; estuaries of major rivers were even better. The confluence of rivers was good, and some portage locations also became cities.

Natural resources prompted many cities to develop to serve the mining, fishing, and agricultural communities.

Even when no specific locations seems better than others, some cities developed to serve surrounding small communities with specialized goods and services. The region needed some city, and on the plains, it might not matter specifically where.

Today, however, those motivations are much reduced. Although international trade has risen over the years, the labor needs associated with ports and related commercial activity have dwindled. Similarly, we still use natural resources, but far fewer people work in logging, fishing or mining.

For much work today, the job can be done most anywhere. Designing products, engineering machinery, writing software, answering customer calls, processing financial transactions can be done in any place with good communications links—which is pretty much any city in the United States or in most of the world.

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