Macro

These Cities are Becoming Echo Chambers

Large industrial cities, like Detroit and Pittsburgh, have mostly been in decline over the last few decades, ushering in a new era of cities with a diverse set of industries and jobs. But in recent years that trend has reversed among technology hubs, like San Jose and Seattle. Their workforces have shifted so heavily toward engineering that they are now at risk of losing the diversity of thought that’s necessary for innovation.

Revelio Labs

8/26/20

Large industrial cities, like Detroit and Pittsburgh, have mostly been in decline over the last few decades, ushering in a new era of cities with a diverse set of industries and jobs. But in recent years that trend has reversed among technology hubs, like San Jose and Seattle. Their workforces have shifted so heavily toward engineering that they are now at risk of losing the diversity of thought that’s necessary for innovation.

By constructing an occupational diversity index for each job, which is scored between 0 (perfect uniformity) and 1 (all jobs in one occupation), we can see how workforce concentration is changing. Check out the results below:

Over the last 10 years, the share of engineers in Seattle’s workforce has grown from 28% to 39%:

Takeaways:

  • San Jose and Seattle have increased their concentration in software engineering the most, which puts them at the greatest risk of sectoral shocks.
  • A high degree of occupational concentration can lead to group-think and echo chambers, which limit innovation by inhibiting contrarian views.
  • The homogeneous cities of yesterday are not the homogeneous cities of today. Cities like Detroit and Houston, which have invested in diversifying their workforce, have made significant strides toward attracting new types of businesses and workers.

If you have any ideas of other metrics to track or would like to hear more, please feel free to reach out to us.

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