Author Antoine van Agtmael and journalist Fred Bakker have a new book out entitled, “The Smartest Places on Earth: Why Rustbelts Are The Emerging Hotspots of Global Innovation.” This is a familiar theme to me because I was the editor of the 1992 Business Week cover story that discovered the phenomenon, entitled simply “Hot Spots.” At about the same time, Harvard’s Michael Porter coined the term “clusters” to describe areas that used ideas from universities or research institutes to create dynamic technology-based economic growth. These hot spots also were the theme of my 2011 book, The Next American Economy: Blueprint For a Real Recovery.” I also know van Agtmael from the days that he discovered “emerging markets.” He’s a smart guy and we’ve been talking about similar issues for a long time.
By now, we’ve established beyond a shadow of a doubt that better coordination among universities, large companies, smaller start-ups, chambers of commerce and economic development offices, and governments at the local and state level have created genuine wealth in places like San Diego, Austin, Pittsburgh and elsewhere. We have many Silicon Valleys, not just one. There are right ways, and wrong ways, to make these collaborations effective.
But the Wall Street Journal cannot accept the argument and has conducted an attempted assassination of the van Agtmael book in today’s newspaper. (It is behind a reg wall.) The Journal has an ideological conviction that better coordination among local, state and regional players is un-Reagan-esque. They want the invisible hand of the marketplace to determine all economic outcomes. Efforts by humans to create a smarter kind of capitaliare doomed.
The Journal made its attack in a book review by Marc Levinson. Levinson, who seems to write about shipping, takes particular issue with the Agtmael/Bakker argument that Albany has created a kind of nanotechnology/semiconductor cluster, thanks in part to a grant from New York State to GlobalFoundries, to create a new factory. It was about $1.2 billion.
Levinson calculates it cost taxpayers $1 million per job created, and he suggests this is outrageous.
But the purpose of the investment was not just to create one chip plant. The goal is to attract many more companies, large and small, to create a concentration of activity in the Albany area. I have not been to visit so I cannot vouch that the cluster effort is proving successful.
But Levinson’s attack is a cheap shot. It is intended to dismiss the Agtmael/Bakker book as rubbish. But it’s not. It is another effort to explain to how we can create wealth and jobs in America. Pity that the Journal had to resort to using a ideologically juiced-up shipping writer to sabotage it.
