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How Hybrid Work Is (And Isn’t) Reshaping Cities
A conversation with author and professor Richard Florida about where talent is moving around the world.
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Economic activity has long been concentrated in big metropolitan areas. But has the rise of remote work technology — and its accelerated adoption during the pandemic — changed that? How are talent flows between geographies changing? And what does it mean for employers? Richard Florida, professor at the Rotman School of Management at the University of Toronto known for coining the term “creative class,” shares his latest research, which shows the deepening links between urban centers in various parts of the world, and he explains how these “meta cities” remain important places for people to connect. He is coauthor of the HBR article “The Rise of the Meta City.”
ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.
The kind of work we do has always been linked to where we live. From the days of farmers on farms, to the sailors, longshoremen, and financiers in the port cities that first powered global trade, to the assembly line workers and tradesmen in the factory towns that drove the industrial age. Intellectuals, artists, and knowledge workers, what our guest today calls the creative class, have meanwhile long clustered in big urban centers like London and New York. With service providers following, and all of its spurring economic development and sky-high property prices.
But how has the rise of remote work and its accelerated adoption through the pandemic changed that? Now that technology allows us to work from anywhere, are big cities on the decline?
Richard Florida is a professor at the Rotman School of Management at the University of Toronto, and his latest research, conducted with Boston Consulting Group, paints a more nuanced picture. He’s coauthor of the new HBR article “The Rise of the Meta City,” and he joins me now. Hi, Richard.
RICHARD FLORIDA: Hey, Alison. It’s great to be with you and thanks for having me.
ALISON BEARD: Yeah. So I explained a bit in the intro, but give us your quick version of why cities have always been a hub for commerce and the creative class.
RICHARD FLORIDA: If you think back, for all of the millennia before now, a city, a human settlement, a place where people, and businesses, and economic activity gathered was always physically delimited. First it was bordered or bounded by how far we could really walk, and maybe then how far we could ride an animal, a horse, or a mule. And then we began to develop these technologies, a horse-drawn street car. And that expanded the boundaries of a city, of a human settlement. And then we developed subways and trains, and then automobiles. And with every one of these major technical advances, we kind of expanded cities outward, and they got bigger and bigger until you got Tokyo, or New York, or London.
Then we got Covid. And it’s interesting, we had developed these digital technologies before. E-Commerce was certainly here with Amazon and other grocery delivery, and there were digital technologies, email, the internet. But I think what the pandemic did was create this kind of big giant experiment in the use of these digital technologies.
And the idea of a metropolitan area, this is important. The basic definition of a metropolitan area, which is our basic character of human settlement, a city and its surrounding suburbs and inner land is a shared labor market, how far you can physically commute to the city center. Well, I think these new digital technologies, they allow physically bounded cities to create, I guess what I would call digital hinterlands. They allow cities to connect to outside areas.
What we are not seeing is what the media portrays. What the media portrays is the rise of Zoom towns, independent self-acting places, some of them being large like Miami or Austin, some of them being small like the Hudson River towns outside of New York or Bozeman, Montana. Ironically and or paradoxically, even as big central superstar cities like London or New York may see population outmigration to these new up and coming rise of the rest places, their centrality in the network may become ever stronger. And so we’re saying that it is a hub and spoke network. Not only a physically co-located place, but a city which has digital interconnections with other cities. And there’s a structure and logic to that that we need to understand and really haven’t been talking about. We’ve been talking about separate places, not really the network of places and how they fit together.
ALISON BEARD: So talk to me a little bit more about the research you did to provide evidence of this phenomenon, of the meta city, this hub and spoke flow of talent.
RICHARD FLORIDA: Well, it’s very hard to get at everything, and you’d want spectacularly robust data on digital connections, Zoom connections, airline flights. But we said, if you think about what makes the knowledge economy tick, it’s no longer just access to raw materials or access to physical labor, or big endowments of capital and technology. It’s flows of talent. I mean, ever since I wrote Rise of the Creative Class two decades ago, that’s become a mantra. The places that win are the places that attract talent.
And so what we did was look at flows of talent between places. And the way we did that was just take data from LinkedIn, that collates information on professional people, business people, technology people. So what we did was take the biggest cities in the world, the biggest metropolitan areas in the world, and looked at the flows of talent as collated by LinkedIn. So you could see where talent was going between places. Which cities were attracting talent, which cities were losing talent.
When people talk about the rise of new cities in the United States, they focus on three. Miami. Spectacular growth of Miami as a new center, a hub of technology and finance, new crypto high-tech center. Austin: It’s luring high-tech away from the Silicon Valley. Nashville, a place with more affordable housing, great lifestyle, and so forth. Miami, Austin, and Nashville are very much self-contained, wonderful economies.
But when you looked at the LinkedIn data, something becomes very evident. Miami’s number one source of talent, where talent comes from and goes from is New York City, far and away. If you went to the airport on a Monday or Tuesday morning, you would see flocks of commuters. The kind of funny phrases, Miami is the sixth borough of New York. Miami is not so much an independent economy, but it is really tied to the finance and real estate industries of New York.
Austin. If you look at Austin’s LinkedIn data or San Francisco’s LinkedIn data, you see the two are tied at the hip. That Austin has really long been a suburb, if you will, or an outlying, or a periphery, a hinterland of the San Francisco Bay Area technology complex. And Nashville of course, when you look at Nashville, it’s really tightly linked to Los Angeles. So those are just exemplifications. And then we were able to use the LinkedIn data to look at cities that are more or less central in the network.
But once you do that, you begin to say it’s not just individual cities anymore. What these new digital technologies do is reinforce a network of relationships or a set of relationships. And again, I think it allows cities to expand their economic reach without expanding their physical footprint. And if in a way, in the past the hinterland of metropolitan areas was the exurbs, the far out suburbs, and the rural hinterlands, the new hinterland has been massively expanded. That we call the metacity. A city which is no longer fundamentally constrained by its physical footprint, but where digital technology allows it to expand its economic reach through its digital interconnection.
ALISON BEARD: Yeah, I have to say I was glad to learn that the metacity is not in the metaverse. It is actually a real city connected to other cities. But you do seem to be suggesting that that’s how it’s going, rather than people fleeing to the mountains or the beach. The talent really is moving back and forth between bigger cities and smaller cities.
RICHARD FLORIDA: Yes. And I mean, people may flee to the beach, people may flee to the mountains. But that doesn’t mean their job is there. Even freelancers are connected to something, their economic center of gravity. Let me give you another example. Ken Griffin says he’s moving Citadel to Miami. Apollo says it’s moving a bunch of things to Miami. Are they really? Most of what Citadel does still remains in New York City, and to a lesser extent in Chicago. Jeff Bezos said that he was moving to Miami. Did he move Amazon to Miami? No. Most of Amazon stays in Seattle and its other centers, but people are able to telecommute, digitally connect to these places.
In the past, cities were places to live and work. Maybe having a little bit of fun, live, work, play. I would say now that what cities do fundamentally are not just containers for living, or working, or playing, they are mechanisms and platforms for connections.
And we see that in two ways. The first way we see that is the decline in transformation of the central business district. The central business district for most of the 20th century was a place people commuted to work. What central business districts are becoming is places that people connect. I saw this several years ago when the pandemic was ebbing, and I went to visit New York City, and the office towers were completely darkened. But by about 4:30 or 4:45, there were block long queues in front of every restaurant and bar. They were businesspeople dressed in business casual attire, going to meet one another to socialize and reconnect.
A recent study by Paul Levy, who runs the Downtown Association in Philadelphia, actually looked at the rebound in 26 downtowns across America. Boston, New York, Chicago, San Francisco, Los Angeles, and so on. He found that about 10% of downtown activity is made up by residents. About 25% of downtown activity is made up of working commuters. And more than 60% of downtown activity is made up of visitors and tourists.
Successful cities today, whether that is London and New York, which remain great places to live, great places to work, as expensive as they are. But they are principally centers of connection. And in our research, we actually wanted to create a master list of the most connected or most significant global metacities. And as you would expect, London and New York are number one and two. The next cities were the ones that were our giant surprise. Dubai, Dublin, Bangalore, Singapore, along with Paris and Los Angeles, and some other more usual suspects. And there are certain cities in the world, and I think Dubai fits this bill. Great airport, emphasis on restaurants, hotels. Miami, built up its airport, lots of convention and meeting activity. Singapore, spectacular airport. Again, great bay front development.
ALISON BEARD:
Yeah, I’m glad you highlighted the fact that this is an international phenomenon, but I noticed that you didn’t mention any Chinese cities. So explain why they were left out of the research.
RICHARD FLORIDA: Well, we had real issue with Russian and Chinese cities because of the nature of those cities, what’s going on particularly in Russia, but also that they don’t really use LinkedIn as much. So it would be nice to get better data on them.
I think the other way of thinking about this is that they’re also more restricted. The flow of people is less vibrant in and out. Chinese cities are great centers of production. They’re growing leaps and bounds, but I think recent developments have made them less relevant as these centers of connectivity.
What’s interesting to me, it’s the relative decline in our rankings of Hong Kong. It’s not as vibrant and open to the world economy as it may have been a decade or two ago. With the Chinese kind of increasing takeover or adoption of Hong Kong, it’s really faded and Singapore has shot up our rankings.
The other place that is super fascinating to us, the Middle East is probably the single place in the world that best reflects the meta city. You have people who might prefer to live in Lebanon, or Jordan, or wherever, lovely historical, wonderful countries and cities, Amman or Beirut, but can’t find work. And they commute to places like Dubai or Abu Dhabi, and Dubai and Abu Dhabi, and the Emirates have of course built themselves up as centers for this kind of work.
Now, of course, Dubai has become attractive to people from the West, people from Russia, people from all over the world. They say that real estate prices are surging there. But also, what you see happening in Riyadh and other parts of the region is they are trying to position themselves as these central kind of hubs to attract people. So in terms of these new spatial models or geographic models, the Middle East or Asia may more reflect the characteristics of the metacity than the older developmental pattern or the more historical developmental pattern in the West.
ALISON BEARD: Okay, so I want to dig into implications for our audience. What does this mean for existing organizations deciding where to keep, or move, or set up offices, or startups deciding where they might want to locate?
RICHARD FLORIDA: So this is what I do. I’m an urban planner by background, but have now been in a business school for a decade and a half. What I came to the Rotman School to try to do was think about the role of location and geography as corporate strategy. And that’s why partnering with Vlad and Antoine at BCG have been so helpful for me, because I’m not necessarily a business person or business consultant.
What we believe is that location strategy is a central element of corporate strategy, and it’s been neglected. That corporate strategy talks about market, market conditions, competitive conditions, Michael Porter’s competitive strategy. What we’ve tried to do is build on Michael’s work and the work of others to talk about locational strategy or what Vlad keeps telling, not locational strategy, spatial strategy.
When I wrote Rise of the Creative Class Alison, and I don’t think this has changed, nearly every single person I interviewed, whether it was an artist, a musician, a techie, a business person, said the same thing. “I want to work on great projects with great people, in great spaces, in great places.” That does not mean necessarily a home office where you’re isolated and alone, nor does it mean an office in a vertical tower sitting in a cube farm, bored silly and pestered, and you can’t focus. You put your headphones on, and you’re there because people are counting your hours. It means working on great projects with great people, in great spaces and great places. And what it means for corporations is they have to take that seriously.
Where do you put your central offices? Well, you probably put them in the central points of connection. You probably don’t need as many cubicles for people. You need more group meeting spaces. You probably need headquarters in those areas that serve as brand statements, like great retail stores do.
You also need to think about, where are the major hub locations for your people? Where are the places that you are connected to? And to think about where to situate your satellites and your hubs, those may not be your fixed offices. Those may be use of coworking facilities. And then also, I think you need to think long and hard about how people work at home. So thinking really hard about what that portfolio of spaces look like. And then you’re really developing an overarching spatial strategy.
And then finally, this is what I teach to my MBAs. Many of our leading high-tech corporations, given the shift to remote work, think of locations as places on a chessboard that you can manipulate. I can move my headquarters from X city to Y city. I’m not being treated the way I want to in my home city so I can shift production somewhere else. And I think that happened with Amazon HQ2, I think we’ve heard that sometimes with Elon Musk and Tesla, but people are super emotionally attached to places. They have deep feelings about the places they live.
Companies need to think long and hard not only about where to place offices and place economic activity, but also how to manage places. Maybe corporations need a chief locational officer. Maybe they need to develop more capacity on their boards to think about location and the geographic distribution of activities.
So I think the flip side of this is not only do corporations need to be more aware of this. I think business people, management executives, young professionals need to take location much more seriously. And some people say, “Well, I want to move to this lovely place in the hinterland.” Well make sure that that place in the hinterland is connected to the things you want to be connected to. And if you want to stay in a big city, make sure you’re in the big city that reflects the kind of career and opportunities you want. It’s not a random chessboard you’re on. There is a structure to these relationships, and you can place yourself in ways that are more effective.
ALISON BEARD: So does this mean that we need to change the way that commercial real estate works? You get economies of scale with having a big presence in one place. Long-term leases certainly lock you in. And that doesn’t seem very compatible with geographic dispersion and flexibility.
RICHARD FLORIDA: I think if we go back to first principles, we have long been tethered to specific places, for all the reasons you said. We were tethered to farms, we were tethered to ports, we were tethered to big scale industry, and we were tethered to our desks.
I’m old enough to remember not having a computer, but having a wired connection to my computer and a wired phone. My kids just laugh. “What is a wire on a phone, daddy?” A wired phone and a Rolodex. Well, digital technology has untethered us from all of that.
So the whole idea that we need a desk to work in is superfluous. The idea of an office with cubicles is extremely redundant. People don’t like working in that environment. They really dislike long commutes, but we are social animals. We love people. We need people. In fact, if you read the sociological and psychological literature, we suffer from an epidemic of loneliness. So we need gathering spaces.
It almost goes back to the point I was saying, as the central business districts moves from offices to attractions, the office has to become an attraction. It has to become a place where people want to get together and do things.
ALISON BEARD: So what do we do with all of those office skyscrapers and the big corporate campuses that many companies have?
RICHARD FLORIDA: Well, we had an experiment like this not too long ago. It was called deindustrialization. And there was a time that cities were Boston, New York, Pittsburgh, Detroit. They were factory towns.
And at some point, beginning in the 1950s, but certainly accelerating in the 1970s and ’80s, because of advances in technology, those factories moved away. They moved out of vertical, urban environments, to more horizontal. Ports moved, got containerized. They shifted their location. And for a long time, we thought that these cities were dead and defunct. But of course, some of those factories had to be torn down. Others and other warehouse districts were repurposed. They became great neighborhoods like Soho, or Tribeca, areas of Brooklyn, we could go on and on about this. And other areas were torn down and rebuilt, the areas along part of the riverfront in Pittsburgh where I lived for nearly 20 years. I think the same thing is true of the office areas. Now we have kind of a running experiment in that.
After 9/11, New York had to make a decision about how to rebuild Lower Manhattan, and I was part of that thinking, and we advocated that Lower Manhattan be rebuilt as a mixed-use residential neighborhood, not just offices, not just for commuters. And with an emphasis on creativity. Arts, performing arts, music.
So I think that point is some of the towers can be reused as offices. If you follow commercial real estate, there’s a flight to quality. These new beautiful office towers, One Vanderbilt and others, they’re commanding very high rents. They’re exciting. And then some of the older office buildings can be retrofit, but there’s some that can’t.
I think the rise of the creative class and this young dynamic group of people who were drawn to cities in the 1990s, and 2000s, and 2010, they began to reactivate downtown. And so when you read Ed Glaeser of Harvard and Carlo Ratti of MIT, two great friends, when they write in the New York Times, it’s no longer the workplace city. It’s the playground city. I’m not going to say cities are playgrounds, but they have playground-istic elements. Downtowns have the most central locations. They have the best density of restaurants. They have the cultural institutions, the sports facilities.
If you had asked me 20 years ago, I would’ve been against putting large cultural facilities in stadiums in downtown. I would’ve said downtown needs to be the sidewalk ballet of small cafes, and artistic enterprises, and galleries, and music scenes. Now, I would say with the absence of office workers and commuters, downtowns now need to be animated with all manner of great attraction. Both for the local or regional visitor, and also for the global business traveler.
ALISON BEARD: Well, I think that’s so important, that businesses, whether you’re a huge employer or a startup, you do want to be a community builder as well. But one thing I have noticed in big office, mixed-use, retail restaurant developments is that whether it’s the fault of the corporations, or the people financing it, or the policymakers in the cities, they’re not requiring schools, and athletic fields, and all of the things that make people with children want to live and stay in those places.
RICHARD FLORIDA: I think you’re onto something quite profound. That in the future, if you want to build community and connective fiber, it’s not enough just to provide an office with a desk, and implore people to go there and talk to their colleagues. Having on-site daycare, having a nearby school. All of the things that leverage, and make it easier for people and enjoyable. Nearby restaurants, and coffee shops, and fitness facilities for people to work out. I think that’s where we’re headed.
ALISON BEARD: And what does this mean for transportation?
RICHARD FLORIDA: Well, this is something I agonize about a lot. It’s funny folks, how much the pandemic and this new meta city, this physical and digital city together have caused me to rethink my views. I mean, this is why I think this is the biggest transformation in urban structure and urban economics I’ve seen, because it’s forcing me as a scholar of this to rethink everything I thought I knew. In the past, urbanists would say we need more fixed rail subways, more fixed rail transit to bring suburban and hinterland commuters into the business center. Maybe not. Maybe not. I mean, transit ridership is down, rail ridership is down. Maybe we need to think about mobility in a different way.
For me, I would think making sure that we have more complete communities where people can live, and work, and stay in their community, pricing our roads better, making sure people pay for the use of the roads fully, and we should bear that burden. And then think about all sorts of other mobility strategies. Using technology better, sensor technology, better timing of events.
You probably don’t need to even think about fixed transit until you get to be pretty big. Until you get to be over a metro of five or 6 million people, you can get around reasonably well with cars, I’m just thinking about the full complement of mobility. Neighborhood-based, walking, pedestrian, cycling, the use of micro-mobility strategy, shared ridership, flexible transit. And I think that’s something that’s in need of a large-scale rethinking.
ALISON BEARD: What about connecting the hubs and the spokes that you’re talking about though? So obviously that seems to be happening with airlines now. But is it high-speed rail? What is it that’s going to connect these meta cities to all of their satellites?
RICHARD FLORIDA: Yeah, so something else I think about a lot. I was a big critic of airports and airport development, and I wanted to disprove that airports were key players in economic development. And I disproved myself. I found that airports with connectivity to a national environment and a global environment were one of the three or four most important drivers of economic development in cities. And that was 15 years ago. I think that would’ve gone up to one of the first or second. Along with talent clusters, high-tech clusters, business clusters, and highly educated people, airports.
In Toronto, I’ve been in this big debate. There are a lot of people who want to close our downtown airport. Our downtown airport is a lovely small airport with direct flight connections to Montreal and Ottawa, but also to Boston, Washington, D.C., New York, Chicago. And if we were to expand the runways there, we could have quiet electric jets that would enable connections to Europe or further afield. My view is having a downtown airport that can be walkable, pedestrian, quiet, is an enormous asset. Others think it’s a nuisance use. So my view is that air connectivity is critical, and actually a big differentiator in how far you can be central in the network really depends on your air connectivity. And in some of the great cities, they have four, five, six airports. So I think that’s very important.
I remain a fan of high-speed rail. I think it’s a great strategic solution to connect you to places that matter. When I look at the Acela Corridor, the Boston, New York, Washington corridor, their highways play a role. Airports play a role, and the shuttle flights play a role, but also the rail connectivity plays a role. And I think that the idea of having these, I call them mega-regions. These mega regions of 20, 30, 40, 50 million people that are as big as a country in terms of GDP, they’re very important.
ALISON BEARD: In talking about the implications for individuals, what would be your top takeaway for managers, leaders, the C-suite?
RICHARD FLORIDA: The U.S. is extreme in this. To make it simple, young people coming out of Harvard, or MIT, or Stanford, or the University of Michigan, great universities, go to big cities. Lots of job opportunities, a big labor market with finance, real estate, management consulting, technology, arts, entertainment. Lots of other young people like themselves. Lots of places to go out at night. Not only a great labor market, a great dating and mating market. Lots of amenities, lots of things for them to do. But then what happens, of course, when they start to form a family, you’ll see the strollers there. But when they start to form a family and given the extraordinary price of housing, they start to go further afield.
And I think what the rise of the meta city has done is meant that they no longer can just go to Westchester, or New Jersey where I grew up, or parts of Connecticut. Lots of those people can go lots of different places. They can go to Nashville, they can go to Austin, they can go to Miami, they can go to the Hudson Valley, they can go up to Providence, they can go to parts of Connecticut, and they can connect through digital technology and go in and connect with their colleagues .
So I think for corporations, thinking a lot about that, that you may have certain office areas or certain hub areas that are more for young people, and certain that are more for families. And the young people may be in the urban center, and the older people may be in satellite cities or in suburban office complexes. And then how do you bring them together? How do you bring them together so that necessary culture building and mentoring can occur through events, and on sites, and off sites? Dealing with that is going to be a bigger and bigger issue.
ALISON BEARD: And for your MBA students, especially those who want to have high-powered potentially global careers, how do you advise them on building that locational strategy?
RICHARD FLORIDA: Well, I let them do it, right? I built the decision tool called the place finder. I have them take that decision tool and literally write up a strategy memo about how they’re going to deal with this based on career factors, lifestyle factors, housing, and all the rest. I just think more people need to expose them to it, and choose the kind of place you want to be, and understand that you may have to think of your life as not just one location.
You know, my dad, perfect example. My dad left school in the seventh grade when he was 13, to help his family during the Great Depression. He got married to my mom. They bought a house in suburban New Jersey. My dad had one job in the factory for life, and they lived in one house for life. That’s no longer the case for any of us.
Most people and most corporations don’t think about this as strategically as they should. Most people just make moves because it feels right. They moved for a friend, a girlfriend, a boyfriend, to buy a bigger house. It seemed like a nice community. My relative or buddy lived there. Most corporations, “I’m going to reduce my physical footprint. I’m going to save money on space.” Making location a core element of personal and corporate strategy seems like the best advice I could give.
ALISON BEARD: Well Richard, thank you so much. It’s been such an interesting conversation.
RICHARD FLORIDA: Thank you very much.
ALISON BEARD: That’s Richard Florida, professor at the Rotman School of Management at the University of Toronto and co-author of a new HBR article on The Rise of the Meta City.
And we have more episodes and more podcasts to help you manage your team, your organization, and your career. Find them at hbr.org/podcasts or search HBR in Apple Podcasts, Spotify, or wherever you listen.
Thanks to our team, senior producer Mary Dooe, associate producer Hannah Bates, audio product manager Ian Fox, and senior production specialist Rob Eckhardt. And thanks to you for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Alison Beard.