Here’s how industries affect the shape and size of cities

Visualizing the shape of cities and economies

The Industrial Revolution changed the form and function of cities. New patterns of work resulted in massive wealth and distinct advantages for certain regions. Urbanization emerged as a defining characteristic of this age.

During the latter part of the Industrial Revolution, Cambridge School economist Alfred Marshall looked at a particular question: why did certain industries concentrate in specific places?

Marshall argued that the local concentration of industry created powerful economies promoting technical dynamism and innovation.

This Chart of the Week highlights the spatial patterns and business relationships created at the urban scale. Marshall’s insights from the past help us understand present-day tech and media economies and the massive growth of urban regions.

The logic of concentration

Marshall observed that industrial concentration led to long-term tendencies such as increasing returns on capital and compounding regional advantages.

The heart of this observation is that knowledge resides within the companies that make up a particular industry. Over time, these companies can accumulate even more information and direct the flow of new and innovative ideas. This creates local specialization and increasing profits, while also concentrating success, knowledge, and wealth into one key locale.

He defined this pattern as a Marshallian Industrial District.

An evolving landscape: four patterns

Marshall’s work would later influence the work of Ann Markusen, who created a typology of three additional industrial patterns. The patterns identify what makes a city attractive or repellent to income-generating activities.

There are both benefits and problems—called “externalities”—associated with the spatial agglomeration of physical capital, companies, consumers, and workers:

Clusters for a digital age

In the past, the physical constraints of an area defined the structure of cities. Now that so many companies are free from the shackles of producing physical goods, does geography still matter?

Researcher Marlen Komorowski re-examined the concept of clustering with this question in mind. Here are five types of media clusters identified in her research.

Four rationales drive these patterns: agglomeration, urbanization, localization economies. and artificial formation.

The shadow of the industrial revolution

Alfred Marshall made the argument that local concentration of industry can offer powerful economies and technical dynamism and innovation.

We now see this pattern with the emergence of megacities that accrue the majority of the financial and knowledge returns. These megaregions set the perfect stage for dynamic economic exchanges between skilled labor, technology, and networks.

What does your city look like?