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Complex economic activities concentrate in large cities.

Pierre-Alexandre Balland1,2, Cristian Jara-Figueroa3, Sergio G Petralia4

  • 1Department of Human Geography and Spatial Planning, Utrecht University, Utrecht, the Netherlands. balland@mit.edu.

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Summary
This summary is machine-generated.

Human activities concentrate in large cities, with complex economic activities like biotechnology showing higher urban concentration. This trend, linked to increasing economic complexity, may drive spatial inequality.

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Area of Science:

  • Economics
  • Urban Studies
  • Innovation Studies

Background:

  • Human activities like research, innovation, and industry disproportionately concentrate in large cities.
  • Top US innovative cities account for a significant portion of national patents and GDP relative to their population.
  • The increasing concentration of human activity in urban centers requires explanation.

Purpose of the Study:

  • To investigate the relationship between the complexity of economic activities and their spatial concentration in urban areas.
  • To determine the extent to which activity complexity explains urban concentration patterns.
  • To explore the historical trends in the spatial concentration of complex technologies and its link to urbanization.

Main Methods:

  • Analysis of data on scientific papers, patents, employment, and gross domestic product for 353 US metropolitan areas.
  • Utilizing multiple proxies to measure the complexity of various economic activities and occupations.
  • Examination of historical patent data from 1850 to track the evolution of technological concentration.

Main Results:

  • The spatial concentration of productive activities increases with their complexity.
  • Complex activities (e.g., biotechnology, semiconductors) show disproportionately higher concentration in large cities compared to less complex ones.
  • Activity complexity explains 40% to 80% of the variance in the urban concentration of occupations, industries, scientific fields, and technologies.

Conclusions:

  • Increasing economic complexity is a key driver of the spatial concentration of human activities in large cities.
  • A reinforcing cycle exists between increasing activity complexity and urbanization.
  • The growth of spatial inequality may be intrinsically linked to the rising complexity of the economy.