Key points
- Storper: place is not a passive setting; organisations, technologies and territories combine differently in each city.
- In 1970 Los Angeles and San Francisco were similar; forty years later the Bay Area had doubled its advantage through civic and business networks.
- Talent follows jobs, not the reverse; the capacity to learn and coordinate cannot be bought with subsidies.
Why some cities innovate while others do not is the question the economic geographer Michael Storper, a professor at the London School of Economics, Sciences Po and the University of California, Los Angeles, has made the centre of his work, from The Regional World (1997) to Keys to the City (2013). Two cities receive a similar technology and seek to attract similar activities; one creates firms, learning and sustained growth, the other does not. His answer rejects the idea that the economy works the same anywhere: organisations act in concrete territories, technologies develop within concrete relationships and learning depends on proximities and institutions, so that place is not a passive setting but a participant in the construction of advantages.
The holy trinity: organisations, technologies and territories
Storper sums up the mechanism in what he calls his holy trinity: organisations, technologies and territories. Organisations gather capabilities and coordinate activities; technologies transform what can be produced and how; territories situate those relations in contexts with their own institutions and networks. No piece works alone, and agglomeration, the spatial concentration of activity, matters because it eases repeated contact and the circulation of knowledge among nearby actors. But Storper does not reduce regional advantage to being close: untraded interdependencies, trust, shared conventions and institutions explain why some concentrations learn and others merely coexist.
Keys to the City: Los Angeles and San Francisco, the great divergence
Keys to the City adds four keys to explain divergence among cities: productive specialisation, the capacity to innovate, formal and informal institutions and interaction among people. The book rests on the contrast between Los Angeles and San Francisco, which Storper later developed with Thomas Kemeny, Naji Makarem and Taner Osman in The Rise and Fall of Urban Economies (2015): in 1970 both regions had similar incomes and structures, and forty years later the Bay Area had doubled its advantage. The difference lay not in geography or labour but in the networks of business and civic elites, open and connected in San Francisco, fragmented and defensive in Los Angeles.
Against technological determinism, the creative class and subsidies
His analysis disputes the usual explanations. Against technological determinism, he shows that the same technology produces different outcomes depending on the organisations and institutions that receive it. Against Richard Florida's creative class theory, he argues that talent follows jobs rather than the reverse, and that urban amenities are an effect of prosperity more than a cause. And against policies of attracting firms with subsidies, he argues that what matters is a region's capacity to learn, coordinate and reinvent its specialisation when the technological cycle changes, something tax incentives cannot buy.
Territorial inequality and what policy can do
Storper also offers an explanation of contemporary territorial inequality. Since the 1980s, knowledge economies have concentrated in a few metropolitan regions that accumulate innovation, income and skilled employment, while others, with declining industrial specialisations, lose population and opportunities; that great divergence, which he has studied in the United States and Europe, feeds political polarisation. His policy proposal is not to disperse innovation by decree but to strengthen the local institutions, education, infrastructure and cooperation networks that let each region build its own trajectory.
Storper's lesson is that urban innovation is a localised social process, not a resource that gets installed. Cities that innovate combine capable organisations, developing technologies, institutions that ease cooperation and networks of people who trust one another, and that combination is built over decades and can be lost. For urban policy, the conclusion is that counting firms is not enough: one must observe how they interact, which institutions sustain them and whether the city is able to learn when the world changes.
Frequently asked questions
Why do some cities innovate and others not, according to Storper?
Because innovation is a localised social process in which organisations, technologies and territories combine differently: cities that innovate have institutions that ease cooperation, networks of people who trust one another and the capacity to learn and reinvent their specialisation when the technological cycle changes.
What explains the divergence between Los Angeles and San Francisco?
According to Storper, Kemeny, Makarem and Osman, not geography or labour but the networks of business and civic elites, open and connected in the Bay Area and fragmented and defensive in Los Angeles, which let one region bet on technology while the other kept declining specialisations.
