How Did Los Angeles Fall So Far Behind San Francisco?

rise-and-fall-of-urban-economies-san-francisco-los-angeles-coverThe Rise and Fall of Urban Economies: Lessons from San Francisco and Los Angeles
Michael Storper, Thomas Kemeny, Naji P. Makarem and Taner Osman
Stanford Business Books

San Francisco and Los Angeles were identical economic performers in many ways in 1970.

Yet since then the two regions have widely diverged, with San Francisco becoming in some ways America’s premier economy, while Los Angeles became a stagnated sick man whose leading businesses continue to move to Dallas.

What happened?

This book is an academic investigation of that question. While somewhat dry by its very nature, it’s also very accessible and a illuminating for the way that it reviews and tests all of the leading theories of what makes cities successful against these two case studies.

This book is a must read for the economic development professional or civic policy leader. It’s accessible review of the literature on economic development and the various economic schools of thought is worth the price of admission alone.

I recently reviewed the book for City Journal. Here’s an excerpt:

The authors offer another reason why Los Angeles failed to keep up with its neighbor to the north. Unlike the Bay Area, which pursued a “high wage specialization strategy,” Los Angeles, in the interest of social justice, deliberately focused on lower- and middle-tier economic sectors. “Los Angeles’s leaders generated a low-road narrative for themselves, while Bay Area leadership coalesced around a high-road vision for their region,” they write. Such decisions have consequences, many of which are demographic. Had Los Angeles followed the same path as San Francisco, Southern California would have attracted far fewer working-class Latinos. The authors don’t directly state this, but it’s a clear implication of their findings. It’s logical to conclude that any region looking to replicate San Francisco’s success should take an exclusively high-end focus—social justice be damned.

Click through to read the whole thing.



from Aaron M. Renn


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