Intangibles

September 23, 2020

Economic geography fascinates me. It's something I've written about a lot over the years—industry clusters, what's made where—and since COVID, it's top-of-mind for an even greater number of people.

Probably because of how unequal the pandemic's effects have been. Stadiums, hotels, restaurants—all closed. Whereas those working in software, media, and a lot of manufacturing might be excused for forgetting there's even a pandemic.

The industries getting ahead are largely those engaged in producing intangibles—thinking wealth into existence—realized as code, books, movies, electronic schematics, whatever.

The double-whammy: the folks working in restaurants, casinos, and malls were never paid much to begin with, and now they're out of work, even as their higher-paid peers are still at it, many from home.

But more than anything, I've been thinking about how few people in the economy actually do this kind of work (produce intangibles). You can drive hundreds of miles down I-80 and probably not see a single software company—they're clustered, packed into office buildings, in maybe 20-30 US cities.

The US has Disney, Google, and Boeing. The sixth-biggest company in Italy? Poste italiane, the post office.

Richard Florida was right all along: 21st-century wealth has a lot more to do with battery-control software on EVs, and video games, than stadiums or casinos.

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