How Seattle Transformed Itself

Edward L. Glaeser is an economics professor at Harvard and the author of “Triumph of the City.”

Stuart Isett for The New York Times Seattle has used high-rise construction and good public transportation to support growth and bolster its economy.

As the 2010 Census rolls out, much of the attention of news organizations is focused on the continuing growth of Texas and Florida, but there is much to be learned from the less extreme, but still significant, population growth in less sunny places, like Seattle.

Seattle is one of the few large cities outside the Sun Belt that is growing more quickly than the country as a whole. The city’s growth reveals the benefits of concentrating smart people in dense cities.

The success of Seattle was hardly foreordained, as it shares much with America’s many declining cities. Like Detroit and St. Louis, Seattle grew as a node of the great transport network, which included canals from Erie to Panama and intercontinental railroads, which enabled Easterners to access the vast wealth of America’s hinterland.

Seattle’s growth spurt during 1880s coincided with its rail connection to the East. In its early years, the city specialized in providing access to timber and Klondike gold.

To succeed in the 20th century, American cities needed to do more than help move natural resources, and Seattle moved into manufacturing transportation equipment, natural enough given the vast distance that separated the city from the country’s population centers.

During World War I, the city’s shipbuilding industry expanded rapidly, and Boeing began as a partnership between a naval engineer and a lumberman.

Just as Michigan’s forests were part of Detroit’s early success in making cars, since early automobiles — like the carriages that preceded them — had plenty of wood, early planes used light wood and Washington’s timber industry was a boon to Seattle’s airplane industry. William Boeing’s own expertise in wood products helped him to be smart about early airplane construction.

In 1954 more than half of Seattle’s manufacturing workers labored in the transportation industry. By 1960, Seattle was seen by many as Boeing’s town, but that should have been recognized as a bad omen.

For 50 years, economists have documented that urban reinvention and entrepreneurship rely on small companies and industrial diversity, not industrial monoliths.

At the start of the 20th century, Detroit was one of the most innovative cities on earth, with an abundance of small automotive entrepreneurs supplying each other with parts, financing and new ideas.

As the Big Three rose to dominance, Detroit became synonymous with urban decline. Boeing’s outsize footprint in Seattle set the stage for the city’s 20 tough years after 1960.

Before the industrial revolution, cities were centers of small, smart companies that connected with each other and the outside world. Small companies and smart people are the sources of urban success today. The industrial city now seems like an unfortunate detour during which cities exploited economies of scale but lost the interactive exchange of ideas that is their most important asset.

As Boeing scaled back its Seattle employment, the city floundered. By 1971, a much-discussed billboard read “Would the last person to leave Seattle please turn out the lights?”

But there was a crucial difference between Seattle and Detroit. Unlike Ford and General Motors, Boeing employed highly educated workers. Almost since its inception, Seattle has been committed to education and has benefited from the University of Washington, which is based there. Skills are the source of Seattle’s strength.

Over the last three decades, human capital has become increasingly linked with urban growth outside the Sun Belt.

The ability to attract skilled people was intimately tied to the success of Seattle’s star companies, such as Amazon; Nordstrom’s, whose strategy of empowering employees was more feasible because those workers were skilled; Starbucks, a coffee chain founded by educators; and Microsoft, which depends on a steady supply of smart software engineers. (Disclosure: I serve on the domestic advisory board of the Bill and Melinda Gates Foundation.)

A great paradox of our age is that despite the declining cost of connecting across space, more people are clustering together in cities. The explanation of that strange fact is that globalization and technological change have increased the returns on being smart, and humans get smart by being around other smart people.

Dense, smart cities like Seattle succeed by attracting smart people who educate and employ one another.

A person’s earnings rise by more than 7 percent as the share of people in his or her metropolitan area with a college degree increases by 10 percent, holding that person’s own level of education constant. Educated neighbors are particularly valuable in dense cities, where contact is more common.

Skilled people have often chosen to come to already educated cities, and the share of Seattle adults with college degrees has risen to 56 percent from an already high 47 percent in 2000.

Today, Seattle is one of the wealthier and most productive metropolitan areas in the United States. Per-capita personal income is 25 percent above the United States average. Per-capita productivity is 37 percent above the metropolitan average in the United States. That productivity explains why Seattle has grown so robustly over the last decade.

Seattle has also helped itself by permitting taller structures. That density enables ideas to flow freely. Building up is also an environmentally sensitive alternative to building out, and Seattle’s height helps the city maintain a relatively high level of public transportation use and a relatively low level of carbon emissions.

Sun Belt sprawl isn’t the only model of modern metropolitan success. Skilled, tall cities like Seattle provide an alternative model of urban growth that emphasizes the creation of knowledge.

The Seattle model is particularly important, because the ideas created in skilled cities are likely to be the economic mainstay of America in the next century.