One of Watts' colleagues, sociologist David Stark, studied how financial traders work; his research illustrates some of the limits of Flatworld theory, demonstrating that although some work can be outsourced or decentralized, there's still an irreducible benefit to being face to face. With the advent of Bloomberg terminals and other computerized trading tools, and especially after 9/11, some large investment banks moved their back offices from Wall Street to the New Jersey and Connecticut suburbs. But traders in close proximity of others still did better.
Through ethnographic observation and focus group interviews, Stark found that proximity provided a rich stream of real-time, unsolicited information—things like the tone of voice of others in the room—which traders use to pick up when "buy" turns to "sell." The globalization of markets and trading is making the world flatter. Yet all over the world, from Ghana to Karachi, people are setting up crowded trading floors just like on Wall Street so they can make deals side by side.
Likewise, in one of Olson's studies, programmers who were stuck together in a single "war room" to complete a project produced twice as much code as the average for a given company.
Being packed together like a bunch of farm hens can definitely help you produce. But urban life also provides creative benefits far outside the setting of a pressure-cooker office. City dwellers have more places to hang out, and they tend to know more people. Meredith Rolfe, a political sociologist at Oxford, studies social networks through large-sample surveys. While there are only small variations in the numbers of close friends people report having, she's found that "acquaintance networks"—the so-called "weak ties" that are most helpful in finding a job or stock tip—range wildly in size, from 500 to 10,000, depending in part on methodology and in part on whether a person lives in a city.
"The friendships and acquaintanceships people form depend mostly on where people spend time," she says. "These social spaces"—such as parks, churches, sidewalks, and stores—"vary both on the types of people they attract and the likelihood of getting involved in a conversation."
It's not enough, then, that people happen to be thrown together in a space. The space has to offer reasons for them to talk to each other, as certain urban spaces do. One study found people are 10 times more likely to have a conversation while shopping at a farmer's market than at a supermarket. With a relaxed pace and farmers ready to tell stories about unfamiliar vegetables, the market is a social setting.
The neighborhood park is another urban space that gets people talking. In a study of three local parks, one of Rolfe's students found that mothers at the parks got more than half their close social support from women they met there. In suburbia, where people put in long hours in the car and private backyards are the norm, moms—and others—simply spend less time in public spaces. This has an amplifying effect for the network: Even if you spend a lot of time at the park, it doesn't do much good creatively with no one else around.
Density is what puts the fizz in New York's champagne, says Elizabeth Currid, an assistant professor at the University of Southern California. Her first book, The Warhol Economy: How Fashion, Art, and Music Drive New York City, demonstrates that New York City doesn't top the nation in finance professionals, lawyers, or CEOs. Rather, the city's economic edge is predominantly due to its concentration of art, fashion, design, film, and other creative types. And these tastemaking professionals must go to restaurants, bars, and parties in order to meet each other, meet opinion makers, get ideas, and get their goods produced. "Whether it's an art opening or a music release party, that is where people meet the gatekeepers who will write their reviews or curate their shows or give them jobs," says Currid. "The social spillover is the mechanism for people's careers. It's feeding the creativity."
The density allows artistic scenes to overlap more easily than in a car-dependent city like Los Angeles. "If you run into people, say, by having offices within 30 meters, you're more likely to collaborate," Olson says. "If it's any distance beyond that, you might as well be in another city."
Some industries depend much more on face-to-face knowledge than others. In quantitative analysis of economic data, for example, the relevant knowledge can be printed in a manual, meaning firms and skilled workers can be located anywhere, according to economists Michael Storper and Anthony Venables. But being on the scene is important when it comes to buzz industries—"culture, politics, arts, academia, new technologies, and advanced finance"—in other words, everything people discuss in a wine bar in Tribeca on a Saturday night.
So urban density can lead to more creativity and collaboration. But what about the benefits of urban diversity? "In access to information, the volume of ties is less important than the diversity of those ties," explains Rolfe. "A smaller number of ties which lead off to different types of information would be more useful than a larger number of ties with redundant paths to the same information." So if you want to know who's going to win the Democratic nomination, it's more useful to call pollster John Zogby and the editor of Washington gossip blog Wonkette—the one plugged into insider rumors, the other into mass opinion—than to ask 20 guys down at the barbershop.
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