Featured Research

from universities, journals, and other organizations

Origin of productivity remains in the city

Date:
March 1, 2011
Source:
Vienna University of Technology
Summary:
The trend towards urbanization continues – and it has positive effects on our economy, according to a professor of mathematical economics.

The trend towards urbanization continues – and it has positive effects on our economy, Prof. Edwin Deutsch from the Vienna University of Technology (TU Vienna) claims.

Cities are the economically most successful areas in modern economies. More people are migrating from the countryside into the city than vice versa, with productivity and salaries higher in urbanized areas. Edwin Deutsch, Professor of Mathematical Economics at the Vienna University of Technology, has taken a closer look at this phenomenon: The more diverse and manifold the population, the higher local economic growth -- that is the conclusion of his econometric calculations.

The Heart of the Economy Beats in the Cities

"The utopian idea of a nation developing in a romantic ideal of rural areas has faded over the last few decades," Professor Deutsch believes. He developed mathematical models correlating vast amounts of economic data from a variety of regions, and he found clearly visible trends (in accordance with international studies): companies are most productive where they encounter a wide variety of economic activities. Also, the economic stability in times of crisis increases with the manifold of business and occupational groups.

This variety is considerably larger in cities than in smaller towns or rural regions. In the countryside, there often develop regional centers for specific needs -- such as centers based on agricultural resources or traditional culture. But these "polycentric structures," as Professor Deutsch calls them, differ substantially from urban centers, where all these different branches are geographically intermingled. Higher productivity is discernable in regions where the labour location density (defined as the number of work places per household) is high -- here, too, cities surpass rural areas. Professor Edwin Deutsch believes that progressive urbanization is a good thing; to create a successful and creative environment, a variety of people from a variety of different fields have to come together and communicate -- and this works best in urban regions.

Housing Development Leads to Social Diversification

One of the results of the research project especially attracts the awareness of the scientific community: in addition to diversified economic structures, a diverse range of living conditions proves to have positive effects. In Austria, social housing is widespread. "A good mix of rent, home ownership and social housing leads to a mix of social classes and groups, it boosts social cohesion -- and this is good for the economy," professor Deutsch explains. Regions with a higher ratio of social housing are the economically more productive ones.

While rural areas are dominated by the middle class, both poorly skilled people as well as the educational elites are well represented in cities. Professor Deutsch found that education has a strong impact on migration and living conditions; while poorly educated people move to areas where they can find jobs, it is the other way around with the highly educated workforce. Companies in the knowledge-based economy are more mobile and tend to move to places where they can find a large supply of highly-trained employees.

Productivity is Urban

It is not yet clear which final conclusions will be drawn from these mathematical models for politics and regional planning. After all, the research project at TU Vienna aims at contributing to a deepened understanding of land use regulation and regional planning. "In the future, some people will still want to live in rural regions," professor Deutsch says. "But high productivity and economic momentum are generated in urban areas -- and this is not going to change."


Story Source:

The above story is based on materials provided by Vienna University of Technology. Note: Materials may be edited for content and length.


Cite This Page:

Vienna University of Technology. "Origin of productivity remains in the city." ScienceDaily. ScienceDaily, 1 March 2011. <www.sciencedaily.com/releases/2011/03/110301091350.htm>.
Vienna University of Technology. (2011, March 1). Origin of productivity remains in the city. ScienceDaily. Retrieved October 23, 2014 from www.sciencedaily.com/releases/2011/03/110301091350.htm
Vienna University of Technology. "Origin of productivity remains in the city." ScienceDaily. www.sciencedaily.com/releases/2011/03/110301091350.htm (accessed October 23, 2014).

Share This



More Science & Society News

Thursday, October 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Chameleon Camouflage to Give Tanks Cloaking Capabilities

Chameleon Camouflage to Give Tanks Cloaking Capabilities

Reuters - Innovations Video Online (Oct. 22, 2014) Inspired by the way a chameleon changes its colour to disguise itself; scientists in Poland want to replace traditional camouflage paint with thousands of electrochromic plates that will continuously change colour to blend with its surroundings. The first PL-01 concept tank prototype will be tested within a few years, with scientists predicting that a similar technology could even be woven into the fabric of a soldiers' clothing making them virtually invisible to the naked eye. Matthew Stock reports. Video provided by Reuters
Powered by NewsLook.com
Jet Sales Lift Boeing Profit 18 Pct.

Jet Sales Lift Boeing Profit 18 Pct.

Reuters - Business Video Online (Oct. 22, 2014) Strong jet demand has pushed Boeing to raise its profit forecast for the third time, but analysts were disappointed by its small cash flow. Fred Katayama reports. Video provided by Reuters
Powered by NewsLook.com
U.S. Issues Ebola Travel Restrictions, Are Visa Bans Next?

U.S. Issues Ebola Travel Restrictions, Are Visa Bans Next?

Newsy (Oct. 22, 2014) Now that the U.S. is restricting travel from West Africa, some are dropping questions about a travel ban and instead asking about visa bans. Video provided by Newsy
Powered by NewsLook.com
US to Track Everyone Coming from Ebola Nations

US to Track Everyone Coming from Ebola Nations

AP (Oct. 22, 2014) Stepping up their vigilance against Ebola, federal authorities said Wednesday that everyone traveling into the US from Ebola-stricken nations will be monitored for symptoms for 21 days. (Oct. 22) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins