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October 10, 2005

Comments

Edward Cotton

The world is probably flat and spiky. Indiviudal success stories can create clusters of creativity, but it can now happen anywhere. The map shown in The Atlantic doesn't seem very detailed and is missing Tallin, but according to this..

http://www.aqris.com/?id=1321

There is alot going on there.

Also, think of the musical cluster that Saddle Creek records has created in Omaha, Nebraska. Certainly a flat phenom, but also a clustered community of musical artists.

More info here...

http://www.pitch.com/Issues/2005-09-29/music/interview.html

Mike

First of all, I have to say that I love what you are doing! The book you are writing sure looks like it will be excellent. I just like the way that you are disecting information and drawing to the key insights.

I think that this example of focusing on the centers / peaks / etc. exists because it is a historical accident. Ok, accident is not the right word but during industrilization the concentration of resources made a lot of sense. You needed to have capital, know how, skills, etc. all relatively closely to each other. All of this is now dramatically changing.

1) Information is becoming accessible from anywhere
2) The costs of developing products are becoming far lower. Outsourcing enables people to design / invent a product without requiring the manufacturing capabilities (Cafe Press, Fabs, etc.)
3) Due to the global economy, people can be anywhere.

We are trying to follow this example at MindValley. We left the Silicon Valley to head to Kuala Lumpur and are now developing our products and services from here. 100% of our ecommerce sales are outside of Malaysia. In addition, we are developing a web appliation focused on aggregating information in the long tail (blinklist).

Look forward to the next post in your blog. Mike

David

I don't know that hits are the same as clusters. I haven't had time to check out Florida's article yet (actually, I used to live in Florida, and it WAS pretty flat), but from the sections cited above it sounds like he's talking about concentrations of activity as opposed to whether those activities are individually significant. While people can certainly communicate electronically, there is something else that occurs when you can get together with your collaborators for a beer.

Frank Chiachiere

I think the key question that Florida fails to address is what is happening to spikiness OVER TIME. IF you're correct, then we should see the tallest spikes (i.e. the heads) slowly eroding as the morass of non-spikes or mini-spikes (tails) grows.

The question to ask Mr Florida is not whether the world is spiky. We know that. The question is, is it MORE OR LESS SPIKY than it was, say, 10 years ago?

Niti Bhan

I'd add Jagdish Bhagwati's "kaleodoscopic comparative advantage" to the mix, this is his article rebutting "The world is flat" by Friedman.

http://yaleglobal.yale.edu/display.article?id=6109

J-Lon

I think you're both probably kind of right. Florida is right in that I think place does matter. For some people, it is the physical aspects of a place that matters. For others it's the people in a place.

Most hits were just blips at some point. Most blips didn't start out in the concentrated cities. They migrate there, because that's where the action is. Even though this is eroding, I think Florida is right about this, and like blue jeans and other time honored things, the city as center of this sort of activity will survive far longer than most techno revolutionaries expect.

Sure, you can kind of do it from anywhere. But it's much easier to do it from anywhere after you've already proved you can do it in a city. Did those programmers in Thailand just go out there and put up their shingle? Or were they people who had already established reputations in a place like Silicon Valley and then moved elsewhere.

I'm just finally reading "Good to Great" by Jim Collins. He talks about how in their study they found that technology is an accelerator not an end in itself. I think the same can be said for certain physical places. They may not in and of themselves be responsible for innovation. But they have historically served as accelerators of innovation. And I don't think this trend will abate any time soon.

I have many great friends that I've met over the internet, people I've had almost decade long relationships with. But the thing that solidified most of these relationships was the physical connection of meeting these people face to face. And my closest internet friends are the ones I met on-line who also live here in Seattle.

That's why I think it's wrong to dismiss Florida too summarily on this point. He's gotten way too many things right to be completely wrong here. The city has existed for a really long time. It's been a very versatile thing, and has found a way to evolve. Indeed, much of Florida's work seems aimed at finding ways that cities can evolve and remain relevant in the present day conditions.

The city may not work for everyone. And it may be that technology is making it possible for people to opt out of the city if they want to do their work elsewhere.

But I don't think that's going to mean a significant flattening of the spikes. It just may mean more paths to spikedom. There's definitely something to this long tail. There's money to be made in it, that seems pretty clear (at least for distributors like Amazon, I"m not sure if the producers of long tail content will be any better off beyond the warm fuzzy feeling of knowing that 400 people read their book instead of 14).

But whether that in an of itself will rework the structure of everything. Well, I'm less sure of that.

I was thinking a little bit about the future recently as I watched people talking on their cell phones and surfing the internet on their Treos while I sat at the bar of Neumo's, a rock club here in Seattle.

"The gadgets are about right," I thought. When I was imagining the future in the early '70s as a kid, those are the sorts of gadgets I thought we'd have. But what's with all the natural fibers? Levis in the 21st century? And why do the cars still pretty much look like more or less the same too? Where are the flying cars? And this bottle of Bud looks pretty much like the Bud my dad used to drink. And aside from the cell phones and the wireless internet, it seems like people are more or less doing the same thing in this club that they were doing the first time I set foot in a rock club in 1981: Drinking, Talking, and listening music.

Face to face human interaction. Probably some business is getting done there also. Two people are drinking, talking, shooting the shit, getting comfortable with each other. They don't even know they're going to work together yet. But there's a bond being formed. It isn't really about work product or resume credentials. It's about comfort level, trust, and other intangibles, intangibles that end up being pretty important.

I don't work at Amazon or Microsoft. But I know a lot of people who do. I see them out at in bars and clubs, hanging out, purusing outside interests in music and stuff like that, building friendships. That stuff carries over to work, and it's hard to replicate that in a virtual distributed network.

Maybe that will change as people get used to the new technology and adjust. But somehow I doubt it. Perhaps some introverts need less of that sort of human connection. But so much business gets done out in informal settings. And this is much harder to accomplish if people are not physically proximate to each other (at least that's my experience). And as long as this is true, long tail or not, the city will have a significant role to play in all this.

John

I think you're missing the point. Florida is looking at economic activity, and that is VERY relevant. The fact that people in Talinn made something as cool as Skype doesn't change the overall picture, which is that most things are happening in a limited number of places.

Pointing out some anecdotal examples is a pretty poor rebuttal.

Location matters. One of the reasons you have the ferment of innovation of Silicon Valley is because people can move around between organizations. That happens because of a variety of informal interpersonal ties that are very hard to duplicate electronically.

That doesn't mean the people who hook up to start a new venture in the valley won't have someone in India doing all the programming, but it is relevant.

Joe Cortright

Small spikes are still spikes--Your point that some of the spikes are small "a microcluster of game programmers in Thailand" doesn't refute the key point that the world is, in fact, spiky.

If Friedman were right, the critical mass would occur with one individual.

It's really, really clear that innovation is a social process, accelerated and mediated by the interaction of individuals. Face to face still matters, and the particular characteristics of place, especially cities, is what drives the creation of spikes, large and small. See espeically, John Seeley Brown's "Social Life of Information" or anything by Jane Jacobs, or the work of Michael Storper.

Technology--email, voice, fedex--is a weak complement and not a perfect substitute for F2F interaction.

niblettes

Florida's overarching thesis is that consistent and sustainable economic advantage flows from the integration of technology, talent and tolerance.

While technology is only coincidentally related physical location, and talent can grow anywhere, tolerance is something that seems to be more readily cultivated in areas of large dense populations.

The kinds of social and cultural diversities found in large dense urban centres (like NYC) force people living there to tolerate each other in ways that are unnecessary in more homogenous and lightly populated centres (like Mobile Alabama). As a result large urban centres are more open to try more ideas generating more innovation and giving it a logarithmically greater economic advantage over smaller tiered cities.

This is not to say that innovation cannot come from smaller urban centres. Rather it is to say that larger urban centers will more consistently and sustainably outperform smaller centres in terms of economics and innovation, and that population density (the "head" as opposed to your "tail") is absolutely crucial to this dynamic.

Also, I think claiming that Skype and Kazaa have "changed the world" is more that little melodramatic.

Will Page

This is an excellent thread, and I’m very grateful for the opportunity to be part of it.

I was introduced to Richard Florida’s work when I attended South by South West 2005 in Austin, Texas. Whilst at the event, I met a truly inspirational economist, Jon Hockenyos from Texas Perspectives, who showed me the role of Florida’s ‘Creative Class’ in developing the Austin’s ‘spike’ like economy. In short, the fact that Dell is based there attracts a heck of a lot of economic activity. Add to that a phenomenal music scene and, at the margin, people might be inclined to locate their activity in Austin as opposed to California (no disrespect to California’s music scene, but when you see those huge murals of Stevie Ray Vaughn behind every high class hotel, you get the point). Going back to the point Mike made above, about enjoying a beer with your collaborators, you can at least feel – if not put a number on it for appraisal purposes – the economic benefit in having a beer with your IT collaborators on Sixth Street where the supply of live music literally exceeds demand.

Sure, all this is very anecdotal, but where Mr. Hockenyos work really kicked in, for me, was when he presented the case for turning the old municipal airport into a film studio. So, the logic goes, you’ve got a creative class in IT (Dell and all its spillovers) and in music (SXSW and of its spillovers) …why not take advantage of a disused Airport and give the film industry a chance too? …what could be more complimentary? Since doing this, the film studios have really taken off, with a handful of key directors who consider the city ‘home’ now able to apply their art there too: Sin City being a case in point!

Going back to the debate, ‘flat world’ peoples would argue that IT can be based wherever, but Dell (all be it with a hard ware focus) must put a ‘spike’ into that argument. Then again, even if it doesn’t, (the next Michael Dell might well come from Estonia), a clever combination of complimentary creative class economies in music and film might well attract him from the ‘flat’ to the ‘spike’. Perhaps I’m guilty of basing the fascinatingly technical topic of spatial economics around the principles of enjoying a good beer and some great blues after work, but (let me dust off that old Stevie Ray Vaughn record) …you know that might not be such a bad idea!

Where could this thread go from here? Well, in terms of the tug of war between spikes and flats, a key development to follow is state intervention in keeping spikes …err, spikes. That is, look for the Government, or more likely local enterprise agencies, subsidizing the operating cost of creative class economies to ensure that they are not at a disadvantage by opting to (continue to) locate their activity in the city. If you accept this is already happening (in my view, it is) then the debate is already heavily distorted by subsidies. That is to say that ...the world is (now) naturally flat, but not if you’re 'spikes' local development agencies can prevent it.

Hope my views are of interest and value, and thanks again for letting me contribute to this fascinating debate.

Will

Marlin May

I believe that David Palmer is exactly right. If physical proximity is becoming less important, then the spikiness of the map should decrease over time. That is, if and only if connectivity becomes more evenly distributed. If not, spikiness will persist, but it will become more a map of well connected physical spaces, but more spread out because of broadband wireless connectivity.

Shawn

ONe thing I'd like to say, is that I'm a big music fan... have been forever and will always be... I can't remember the last CD I've purchased from the store, because I've switched to online music and have a huge database of mp3's to sustain me. Incidentally, most of what I buy is single songs from albums made years and years ago, nothing new really. I also have satellite radio in my truck, which I use by basically switching channels until I find something I like... it's a great service. This, again, is old stuff I'm listening to. Why? Because, in my view, we're in a total lull in the music scene... and there are various reasons for that. But my point is, I want there to be hits and I want them to be (at least partially) good songs and I want to know others are enjoying them with me... Good new music is out there right now, but the big hit making outlet, MTV, is sort of dead... We used to have so-called "hits" , meaning songs that were liked by large group and reflected and were a part of the culture. If connectivity is going to be just another way for people to go further off into their own worlds, then I think we don't need it like that. I think we need to bring it back together... we've grown apart at the same time we've closed some of the gaps. I think I've echoed some of the other sentiments (even though I was just rambling...)

John "Z-Bo" Zabroski

I think neither of these two men have the right idea, and I'll explain why.

Is the world flat? No. Friedman probably came up with the book title, "The World is Flat", because people prefer easily repeatable soundbytes. History repeats itself; Before Columbus discovered America everyone preferred the same exact easily repeatable soundbyte.

Friedman is a quasi-genius or genius, not for writing the book, but for coming up with a title that plays on the sensibilities of his readers: "Oh, irony, look at that!"

"Flat" is a really poor way to describe the world. Here is a good exercise to demonstrate how the world is right now, that I believe is borrowed from a movie directed by Darren Aronofsky:

1) Take a piece of 8.5x11 paper and a marker.
2) Put one dot spot (Point A) on the paper, and put another dot spot (Point B) somewhere else on the paper. Make sure both dots are fairly far away.
3) Ask yourself, what is the quickest way to get from Point A to Point B and vice versa?
4) The answer is fold the paper in half so that Point A and Point B touch each other.

The point I am trying to make here is that, if anything, the world is increasingly "Folded." A lot of what Thomas Friedman says is true; I just firmly dislike his poor book title which is now becoming a "meme" in discussions about globalization.

Dimitar Vesselinov

Steve Jurvetson reports:
"Huawei is the 'Cisco of China' and a whole lot more. The breadth of their product line across datacom, telecom and consumer electronics is breathtaking. Annual sales are about $10 billion and growing about 40%/year. It is a microcosm of the Chinese economic juggernaut.

At this R&D center in ShenZhen, they employ 30,000 R&D Engineers ( of which 6,000 are working on 3G wireless).

Engineering graduates are paid $6K per year. After ten years of service, they are raised to $15K/year."
http://www.flickr.com/photos/jurvetson/52594122/

See also:
http://divedi.blogspot.com/2005/10/huawei-is-cisco-of-china.html

Chris Gilbey

Love John Z-Bo's comment above. Friedman's book was great, but people seem to ignore the last chapter, with the caveats. And anyone who reads the Friedman book should immediately go out and get "The Collapse of Globalism" by John Ralston Saul.

Before everyone gets caught up in how cool flatism is, we need to understand the implications of a world that is run by economists, and as Saul notes, this is causing the re-rise of nationalism and a bunch of other isms that are not so cool.

The law of unintended consequences remains in place still.... Look at the result of flatism on the workers at Delphi.... and where will that lead....

charlie Leadbeater

The long tail hypothesis makes a lot of sense but would be even more plausible if you acknowledged that it does not apply to all markets, industries and kinds of knowledge.

I write this having just spent the day on the tiny island of Hareidlandet in Western Norway where 75% of the world's offshore supply vessels are designed and many made. This cluster is built on tight relationships between designers, engineers and users, in a community with deep know-how which is very difficult to codifiy and commodify. It cannot be shipped off, just in time to India, China or Korea. When knowledge is codifiable and easy to copy then the world of innovation may become flatter but much knowledge in specialised fields in tacit and difficult to replicate.

With the London think-tank Demos I have just launched a year-long project on science in China, India and Korea. It's clear that just the scale of investment in innovation in China and India means that they should not be understimated as future hubs of innovation. But quantity does not equal quality and inputs do not gurantee outputs. Chinese ivnestment in R & D has risen 15% a year for the last decade. It employs more researchers than Japan. Yet China's share of US and European patents - an imperfect measure of innovation output - is still only 0.3% and 65% of those come from multinational companies based in China. Something quite different is happening in Korea and in stem cells/biotech in particular. In 1970 -74 Korean based inventors were awarded just 28 patents in the US. In 1995-1999 the figure was over 11,000.
Ideas are coming from many, many more places - more spikes - but not from all over: some African countries have only a handful of post graduate students in university.

Larry Irons

Concentrating innovative, creative people in urban centers, or leveling out the playing field so that innovators don’t have to emigrate within a country or between countries to work on innovation projects, does not speak to the key issues in designing processes that increase the effectiveness of collaboration. Rather than focus on whether the world is flat or spiky, serious attention is better paid to how global enterprises organize collaboration and what limitations place and cultural context impose on that organization.

nachbarin

http://www.girlnackt.com/

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Tidbits

The Long Tail by Chris Anderson

Notes and sources for the book

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