The Great Reset
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The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity is a book published in April 2010 by Richard Florida, a professor at the University of Toronto's Rotman School of Management. The book puts into context Florida's urban development theories, with the recent recession, to describe the future of our cities. The Great Reset looks at the economic incentives which have driven American society in the past. Florida compares the 2008–2012 global recession to two similar periods in recent history, the 1870s and the 1930s. The book is divided into three parts, how past resets have shaped development, how different cities are positioned, and what trends will emerge from the reset.
Part 1: Past as Prologue
Florida claims the 1870s reset best mirrors the American economic situation in the 2010s. The 1870s changed the organization of production, creating the American system of manufacturing, which paved the way for unprecedented growth and innovation. During the first great reset there was a mass migration of people from the countryside to urban areas, and significant development of new transportation structures.
The second great reset laid our current foundation. Florida cites historian Alexander Field, calling the Great Depression of the 1930s, the "most technologically progressive" time of the 20th century. The second reset, through a combination of public policy, economic incentives, and a shift in social preferences started the move towards suburbs. Consumption habits were significantly altered as people spent less on basic necessities like food, shelter, and clothing and began to spend more on appliances and other household items. The second reset created the "ownership society"; our new economic model is more dynamic and will require increased flexibility.
There is a pattern, common to both of the previous resets, which Florida expects to recur over the next few decades. Initially, old institutions break down and businesses and consumers cut back their spending. This transitions into the emergence of new innovations, which are developed into new technologies and forged together into bigger and better systems. This coincides with public and private investments in: energy, transportation, and communication infrastructure, to give the broad skeleton of a new economic landscape. These create a new spatial fix that is more closely in sync with the improved productive capacities of the underlying economy.
Part 2: Redrawing the Economic Way
This section examines the potential impact that the recession and the reset will have on different types of cities. The higher a city's exposure to the creative economy, the better it will do in the great reset. Cities like London and New York, despite their exposure to the financial industry, have the diversity and global reach to prosper. Cities that are major or regional hubs will also thrive as they become the beneficiary of increased consolidation. Smaller cities heavy on particular aspects of the economy, for example those overly exposed to manufacturing or the FIRE economy (Finance, Insurance, and Real Estate) will need to adjust their economic model and demographics. Government and college towns will prosper because of their ability to attract and maintain members of the creative class.
Part 3: A New Way of Life
Two types of jobs are growing in size and salary: creative class jobs and routine service jobs. The geographic sorting of people based on ability and educational attainment is the highest ever. Cities with cosmopolitan bases such as Austin, Boston, and San Francisco are seeing large increases in population, with a heavy concentration of creative people. Former industrial cities such as Buffalo or Akron are falling behind by both measures.
Consumption habits are changing drastically, particularly with the younger generation. Young people tend to have a negative perception of owning a car, and are less likely to purchase luxury goods. They are more likely to spend on experiences or social activities.
Florida sees enormous potential for the mega region, a combination of major cities located close together. He lists several notable ones around the world including the BosWash corridor which encompasses Boston, New York, Philadelphia, Baltimore, and Washington D.C, and ChiPitts which contains the major cities in the American Midwest. He argues that these mega regions are becoming spikier and are creating a disproportionate amount of productivity and wealth for the global economy. As the cities in these regions become more connected their dominance will increase. The suburb versus city debate will not produce a winner; the solution is a complex mixture of the two. They will both become part of mega regions, with many of the suburbs emerging into mix use communities. He cites the Northern Virginia suburbs of Washington DC as early examples of this.
Big cities with a diverse demographic and creative base have proven that they are the most capable of attracting young people and new talented graduates. Cities like New York City, Chicago and San Francisco are where the most graduates flock each year. Florida argues that cities benefit from economies of scale and produce the most efficient systems for the economy, environment, and transportation. He sees this scale as an advantage as cities become smarter and more versatile.
Florida has drawn criticism for taking an overly academic and elitist point of view. Critics argue that he overstates the size and potential impact of the creative class, neglecting many economic and social realities. They also argue that he ignores many factors that people consider when they are choosing a place to live.
- Field, Alexander J. “The Most Technologically Progressive Decade of the Century.” American Economic Review 93 (September 2003): 1399–1413.
- Jannene, Jeramey. "The Great Reset by Richard Florida - Book Review." Urban Milwaukee 25 November 2010. .
- Chevreau, Jonathan. "The Great Reset and the future of Tor-Mon-tawa Canada." National Post 14 July 2010.
- Kay, Jonathan. "The Problem with Richard Florida." National Post.
- McDowell, Adam. "Critics lambaste urban guru Richard Florida." National Post 06 January 2010.