UCLA Luskin School of Public Affairs Professor Michael Storper gave a talk on his recently-published book, The Rise and Fall of Urban Economies. It explores reasons why, over the past 40 years, the economic standings of California’s two largest urban regions, Los Angeles and the San Francisco Bay Area, have diverged so considerably. In terms of traditional economic theory, divergence is a surprise that requires explanation, and the story of Los Angeles serves as a natural experiment of history akin to the ones explored in Guns, Germs and Steel by UCLA Professor of Geography Jared Diamond.
In the 1970s, Los Angeles and San Francisco stood on relatively equal footing in terms of per capita income as two top-tier cities in the U.S. — 4th and 1st respectively. Since then, Los Angeles has come to resemble middle-tier metropolitan areas like Detroit and Cleveland, whereas San Francisco continues to be 1st in the nation in per capita income. San Francisco residents enjoy higher wages and greater investment, as well as produce more patents. Storper examines various potential causes such as immigration patterns, economic development policies, and so forth, and persuasively dismisses them all to arrive at one conclusion: the difference was in leadership and institutions. Leaders in the Bay Area recognized the dawn of the New Economy, and responded by working towards a high-skill, high-wage economy. In San Francisco, cross-pollinating networks of academics, entrepreneurs, and investors enabled the exchange of ideas and human capital across industries. Instead of focusing on technology and innovation, Los Angeles maintained its relatively isolated entertainment, aerospace, and pharmaceutical industries, and is now playing a game of catch-up with respect to tech. Networks of leaders in academia, business, and the public sector are much more disconnected in Los Angeles.
See Dr. Storper’s presentation slides for more details on this fascinating story, and read more about the book in California Planning and Development Report, SFGate, and LA Observed.
At the end of the talk, Adjunct Professor and Journalist-in-Residence for the Institute of the Environment and Sustainablility Jon Christensen moderated a Q&A with Storper. The ensuing conversation during the reception was abuzz with the ideas presented. The book, which aligns with the Lewis Center’s mission to improve the quality of life in Los Angeles through insights into the region’s past and future, is currently available on Amazon. Post-doctoral faculty member Taner Osman, who co-authored the book, is doing ongoing related research on congestion’s effects on urban economies.