Abstract
This chapter described the evolution of the Megalopolis, the region of continuous urban development that stretches along the US East Coast from Boston Metropolitan Region in the North to the Washington DC Metropolitan Region in the South and includes New York, Baltimore, and Philadelphia. Economic dynamism in the Megalopolis over recent decades has been propelled in part by new transport and communication systems which have facilitated the emergence of global economy and the arrival of dynamic new knowledge in the form of physical and institutional technologies in the manufacturing and service economies. The chapter reviews the literature on transition to knowledge economy, explores trends in the entire Megalopolis Region, and provides additional detail on the Boston region’s evolutionary shift to the knowledge-intensive service economy. Finally, the chapter implements the Spence and Hlatshwayo (The evolving structure of the American economy and the employment challenge. Working paper, Council on Foreign Relations, Maurice R. Greenberg Center for Geoeconomic Studies, 2011) approach to study the evolution of tradable and non-tradable sectors and the progress of income distribution for one Megalopolis metro area, namely, Boston. In its conclusion, the chapter attributes the rise of knowledge economy in the Megalopolis to three kinds of proximity among economic agents: physical, relational, and institutional.
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Notes
- 1.
Many of the issues addressed in this chapter are considered in more expanded form in Lakshmanan et al. (2016).
- 2.
Other examples of such creative regions or knowledge economies are Bay Area and Silicon Valley, Los Angeles, Seattle, London, Tokyo, Milan, Sydney, etc.
- 3.
Indeed, even the (“autonomous”) market relations emphasized by the neoclassical economists’ world are socially embedded in the sense that they depend upon assumptions, norms, and institutions shared by the actors and do not themselves derive from economic decisions (Polyanyi 1944; Granovetter 1985). The recent interest in social capital as key supporting asset of productivity has been inspired by the spatial clustering and dynamism in places such as Italy’s Emilia-Romagna and California’s Santa Clara Region.
- 4.
Since the nineteenth century, Boston has led globally in its proportion of literate population. Boston created the first school (Latin School in 1635) and the first college (Harvard College in 1636 with a large dose of public funds). Indeed, the states in New England achieved in mid- to late nineteenth century highest levels of education anywhere in the world—followed by Meiji Japan, Scandinavia, Holland, and Prussia.
- 5.
The scores of colleges and eight major universities in Boston function as major economic engine, enrolling in 2000 over 120,000 students, conducting over $1.5 billion of external research, and reporting total revenues of $5.8 billion.
- 6.
In Connecticut, Massachusetts, and New Hampshire, farmers often shared knowledge about farming techniques and household practices in Unitarian and other churches after Sunday Service in the eighteenth and nineteenth centuries.
- 7.
Heurmann (2009) suggests that human capital externalities accrue predominantly to growing firms, which benefit from sharing, matching, and learning externalities arising from a large supply of highly qualified workers in skilled labor markets.
- 8.
The “Suffolk system” was developed in Boston by the Suffolk Bank before the Civil War (by the investors who founded the textile industry). This bank issued its own notes which were redeemable at par (along with those issued by any New England bank, provided those banks maintained deposits at the Suffolk Bank—thus rapidly expanding industrial capital in New England).
- 9.
Spence and Hlatshwayo used a methodology developed by Bradford Jensen and Lori Kletzer. Their approach determined the tradability of an industry based on its geographic concentration—the more concentrated the industry, the higher its tradability (and vice versa). For example, take retail trade: its ubiquitous geographic presence implies that it is highly non-tradable.
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Lakshmanan, T.R., Anderson, W.P. (2020). The Rise of the Knowledge Economy in the Megalopolis. In: Chen, Z., Bowen, W.M., Whittington, D. (eds) Development Studies in Regional Science. New Frontiers in Regional Science: Asian Perspectives, vol 42. Springer, Singapore. https://doi.org/10.1007/978-981-15-1435-7_19
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