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The New Geography Of Jobs

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The New Geography of Jobs
According to Enrico Moretti 's ground breaking book, “The New Geography of Jobs,” manufacturing sector companies have been superseded in the knowledge economy by innovation sector companies. While they were once the holy grail of community planners, manufacturing sector companies are no longer the ideal economic model.

One key premise of Moretti 's book is that industry-focused brain hubs create thick labor markets with lots of specifically skilled workers. For example, take the software cluster in Silicon Valley, the life sciences cluster in Boston, or the financial or garment industry clusters in New York. These thick markets make it easier for a business in a targeted, innovation industry to acquire needed talent. Moreover, these brain hubs create human capital spillover as the proximity of highly specialized workers to each other helps the exchange of new and creative ideas.

Additionally, the high paying jobs in innovation industries create a multiplier effect. To explain, innovative industries create a multiplier effect because for each highly paid worker, five local service jobs are needed to support them. Jobs in the service sector range from professionals, such as doctors and lawyers, to non-professionals, such as waiters and landscapers. By contrast, manufacturing jobs historically only generate 1.6 additional service jobs in the local area.

Both manufacturing startups and innovation startups require large upfront investments. However,

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