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Decentralization and Density

Daily Policy Digest

Economic Issues

Tuesday, October 30, 2001

The destruction of the World Trade Center's Twin Towers has led to speculation that the era of soaring skyscrapers is over -- and that businesses will become more decentralized. Some predict that modern technologies and communications will allow people to work together yet at a distance and physically apart.

Centralized institutions of all sorts suffered in the late 20th century. The Soviet Union disintegrated. Japan's centralized economy fell apart. Mammoth, old-line corporations felt the competition of small start-up companies. Even U.S. cities have felt the pull of decentralization.

  • In 1940, nine of the 10 largest U.S. cities packed more than 10,000 people into each square mile.
  • Today, only three of the 10 largest cities have more than 7,500 people per square mile.
  • During the 20th century, factories abandoned central cities and joined workers at the edges of urban centers.
But cities are not doomed, planners say. For all the wizardry of the Internet and teleconferencing, enterprises that depend on ideas and information do better when people cluster together. The more idea-intensive an industry, the more likely it is to gravitate to an urban center.

Thus, for example, in 1990, there were 31 U.S. cities with populations larger than 200,000, in which college graduates outnumbered high-school dropouts. All but one of them, Washington, D.C., grew in the 1990s.

Source: David Wessell, "Capital: Decentralization and Downtowns," Wall Street Journal, October 25, 2001.

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