For Immediate Release
Feb 13, 2001

Digital Age Is Reshaping America's Cities, New Study Finds, Creative, Skilled Workers Helping Revitalize Urban Centers

LOS ANGELES (Feb. 13, 2001) — The New Economy. It was supposed to free us from the constraints of "place." Geography no longer mattered. With everyone wired digitally, you could work from anywhere.

But in an important new study from the Milken Institute, researchers have found the opposite to be true: In today′s high-tech world, creative, highly educated, skilled workers are moving to the very places whose best days, many believed, were over: America′s urban centers.

"The revitalization underway in some of America′s urban centers represents one of the most important, if surprising, developments of the new millennium," says the study, Knowledge-Value Cities in the Digital Age, released today by the Institute.

While the digital age makes it easier for skilled workers to choose where they want to work and live, what they′re choosing are cities that appeal to their lifestyle. These are some of America′s biggest and oldest cities — places where other single, creative people live, and where they enjoy the arts, culture and other lifestyle amenities.

"The most salient reason for urban revival comes from the role our cities are playing in the enormous technological revolution now transforming the larger economy," says the report, written by Ross DeVol, Director of Regional and Demographic Studies at the Milken Institute, and Senior Fellow Joel Kotkin, two of this country′s leading experts on the impact of high-tech on our economy and cities. "Technology is reshaping the landscape of American communities."

The authors found that the cities that have done best in the current urban revival are New York, San Francisco, Boston, Los Angeles and Chicago. Aided greatly by the influx of workers from the "soft" or content side of technology, these cities have emerged as leaders in the expanding digital economy.

But there is another group of cities — in the 500,000 population range and below — that has also benefited from the digital revolution. These "emerging technology" cities provide the "hard" or support side of technology — manufacturing, services and supplies — with fewer of the drawbacks that trouble major high-tech communities: higher costs of business, traffic congestion, and so on. Examples of cities positioning themselves as "emerging technology" centers are Reno, Albuquerque, Tulsa, Huntsville, Omaha and Boise.

The most encouraging development of the digital age, however, may be the renaissance of some of America′s most troubled urban neighborhoods. Many have been reborn thanks to inexpensive rents and classic buildings with large spaces available to house the growing creative high-tech companies and their workers. These include downtown Los Angeles, central Dallas, Baltimore, Kingston, NY, Dayton, OH, and Oakland, CA.

"These comeback cities represent perhaps the most dramatic evidence of the potential for urban centers in the information age," DeVol and Kotkin write. "Once seen as 'basket cases,′ these regions have begun to attract significant investment and growth in their technology-related sectors."

The critical factor in future regional growth is the ability to attract and retain a knowledgeable, skilled workforce. Without it, cities will fall behind, the authors say.

"Wherever intelligence clusters, be it a small town, big city or any geographic region, wealth will accumulate," the report states.

There is no magic formula telling cities how to do that. In some cases it′s reducing crime. In others it′s improving education — including lifelong learning and retraining programs. But it′s clear, the authors found, that we are entering a new phase of the digital economy, and it offers some great opportunities for cities over suburbs, the previous winner in the New Economy.

"Every urban area must craft a strategy that emphasizes its strengths in order to convince someone to be there, rather than somewhere else," says DeVol. "The irony of the digital era is that place matters more now than ever before."

Knowledge-Value Cities in the Digital Age stems from a study commissioned last year by the U.S. Department of Housing and Urban Development. It adds to the growing body of research from the Institute on technology′s impact on our economy and society, including Kotkin′s recent book, The New Geography: How the Digital Revolution is Reshaping the American Landscape, and DeVol′s policy papers, America′s High-Tech Economy and Blueprint for a High-Tech Cluster.

About the Milken Institute

The Milken Institute is a nonprofit, nonpartisan think tank determined to increase global prosperity by advancing collaborative solutions that widen access to capital, create jobs and improve health. It conducts data-driven research, convenes action-oriented meetings and promotes meaningful policy initiatives.