The “Great Resignation” is one of the unforeseen consequences of this pandemic. The term describes the global phenomenon of many workers opting for resignation when they were called to return to face-to-face work. In the United States, 4.4 million workers resigned last September, but this effect has been observed all over the world and it may have several explanations. One is the perception by workers that companies with products or services independent of time or location will have a greater potential for growth and to offer better wages. Another reason is associated with the better quality of life that these workers had during the period of remote work by keeping away from urban centers. As a result, the prices of rural properties are growing at a greater pace than urban ones.
This change reminds me of Jacinto, the cosmopolitan main character of the novel “A Cidade e as Serras” by Eça de Queirós, who utters the phrase I use as a title, in a conversation with his friend Zé Fernandes. His mansion, on number 202 of the Champs Elysees, brings together all the innovations of that period: from a telegraph in his office to an elevator for food. Eça de Queirós takes us on a journey from Paris, the most cosmopolitan city of its time, to the beautiful countryside of Tormes which Jacinto falls in love with and where he went to live.
Jacinto’s sentence was correct. Luis Bettencourt, a Portuguese researcher currently at the University of Chicago, compared the average number of patents granted with the number of inhabitants of the city of origin. He and his team found that a city of two million inhabitants has 2.4 times more patents than a city of one million. This factor holds for any city size: whenever we double the number of inhabitants, the number of patents per inhabitant increases by 20%. This increase in scale is observed in almost all socio-economic quantities: the gross metropolitan product, salaries, etc. In the case of infrastructure costs, the scale factor is lower than population growth. In a city with twice the population, the surface area of roads or the length of electric cables per inhabitant is 12% lower.
The advantages in the socio-economic outcomes of larger cities seem to be the result of the greater number of social connections provided by the greater number of inhabitants. To confirm, Luis Bettencourt’s team analyzed telephone communications in Portugal and the United Kingdom. In Portugal, they used a 15-month period, considering only calls between mobile phones that initiated calls with each other. The results show that, for every doubling of the city’s population, there are 12% more telephone contacts per person: in 15 months, an inhabitant of Lisbon made, on average, twice as many telephone contacts as the average of the 4,300 inhabitants of the city of Lixa.
This advantage of social interconnectedness in the production of socio-economic results also results from studies on the operation of innovation ecosystems. For example, AnnaLee Saxenian compared the evolution of the Silicon Valley and Boston’s Highway 128 ecosystems between the 60s and 90s of the last century. Her work shows that the initial advantage of the Boston ecosystem was lost in the early 1980s due to the difficulty in adapting to new technological developments, namely in the area of microelectronics. The greater geographic dispersion of companies and the employment contracts with non-compete clauses of Boston companies prevented the formation of horizontal links between workers, unlike what happened in the San Francisco Bay Area. These horizontal links made the ecosystem more flexible to change.
The realization that innovation grows exponentially with the population of cities and that the cause is the greater number of social interactions led to the development of the idea that the promotion of social interactions can increase innovation. European cities have created conditions to increase the links between the agents of their innovation ecosystem with surprising results. Europe is the region in the world with the most “unicorn cities”, with 65 cities with at least one unicorn, a company that investors value at more than a billion dollars. Portugal has 3 of these “unicorn cities”. Europe currently attracts 18% of the world’s venture capital funding. The entities that streamline the ecosystem connection vary from city to city and can be the local University, municipal authorities or even successful entrepreneurs like Xavier Niel in Paris.
What Eça de Queirós does not mention in his book is that number 202 of the Champs Elysees is practically equidistant from the Louvre, the Paris Opera, Levallois-Perret where the Gustav Eiffel factory was located, and Montmartre where Degas, Renoir, Toulouse-Lautrec, van Gogh and many others, lived and worked. At the same distance is Neuilly-sur-Seine, to where Eça moved in 1891 and where he died. Unlike Jacinto, he preferred the big city to his House of Tormes, which he only visited once. We still need to know if the communication tools we have today will allow us to move to our Casa de Tormes and continue to benefit from the growing network of contacts that city life offers us.
Adapted from my column in Jornal i of December 21st, 2021