In 1970, the metropolitan areas of Los Angeles and San Francisco had almost identical levels of income per resident. In 2010, the San Francisco Bay Area was almost one third richer than Los Angeles, which had slipped from 4th rank among cities in the United States to 25th. The usual reasons for explaining such change—good or bad luck, different types of immigrants, tax rates, housing costs, and local economic policies, the pool of skilled labor—do not account for why they perform so differently. Instead, the divergence in economic development of major city regions is largely due to the differe ... More

In 1970, the metropolitan areas of Los Angeles and San Francisco had almost identical levels of income per resident. In 2010, the San Francisco Bay Area was almost one third richer than Los Angeles, which had slipped from 4th rank among cities in the United States to 25th. The usual reasons for explaining such change—good or bad luck, different types of immigrants, tax rates, housing costs, and local economic policies, the pool of skilled labor—do not account for why they perform so differently. Instead, the divergence in economic development of major city regions is largely due to the different capacities for organizational change in their firms, networks of people, and networks of leaders. Drawing on economics, sociology, political science, and geography, this book sheds new light on the deep causes of economic development and challenges many conventional notions about it. By studying two regions in unprecedented levels of depth and precision, it develops lessons for the field of economic development studies in general and for urban regions around the world.