the spiky California gets even spikier

Today's post in Burgh Diaspora considers the triage of urban areas in making policy decisions. For the case of Ontario, the drive for producing the most efficient and favorable returns in the knowledge economy results in a huge Toronto getting bigger, and other parts of Ontario shriveling up towards economic irrelevance.

I've seen this same conflict while working in economic development in Georgia. The chosen investment strategy discussed around the room for state government is not to build an incubator in a place like Dalton, but to target investments into dense and other-asset heavy Atlanta where success is most probable. As a "how do we get more bang for the buck" strategy, this makes sense. But in the process:

Atlanta explodes and gains more influence.
Dalton is resentful as it loses relevance.

It's a scene that plays out in many states, leaving the struggling communities to feel: just how the heck are we supposed to transition our economies without much assistance from the state?

So is the economic topography of America and its regions becoming more concentrated, or possibly more diluted as technologies and information and capabilities spread across the country?

Last week, PricewaterhouseCoopers and the National Venture Capital Association released fourth quarter 2008 data on the U.S. venture capital system.

For the first time since the data has been collected beginning in 1995, California's share of venture capital has risen to over 50 percent of the U.S. total.


As a colleague was explaining to me today, it's amazing that for all of the policy efforts and for all the initiatives to get venture capital into places like Pittsburgh and Cleveland, the nation's aggregate venture capital is actually becoming more concentrated.

Every year, tick ... tick ... tick ...

the concentration goes up.

To where by the end of 2008, now over half of all U.S. venture capital was concentrated within a single state.

Spiky indeed.