For the last few decades, the agglomeration effect has seen great cities grow ever greater.  A few years ago, entrepreneur James Liang argued in his latest book The Demographics of Innovation, that as cities grow, they enjoy numerous advantages.

He argues that demographics have a huge part to play in innovation, and outlines three core ways they impact a country’s creative output:

• The scale factor – Economies of scale are well known in business, but Liang argues that scale is also vital for innovation.  Not only do countries with high populations have more researchers etc., but crucially, they have a large domestic market for budding innovators to sell to.
• The agglomeration factor – This can be seen with the emergence of innovation hubs, such as Silicon Valley, in recent decades.  Liang argues that a large population is not enough if that population is not fairly well concentrated.  Cities and hubs benefit from the concentration of talent and resources in one place.
• The age factor – The age of the population is also important.  Liang suggests that 72% of the greatest inventions in history were made by inventors in their 30s and 40s.  This is because they have had time to gain an education but are not sufficiently embedded into the status quo to see no other way of working.

Each of these three have seen cities become self-fulfilling prophecies, as more people move there, which in turn makes them more successful, which encourages more to follow suit.  Is the magic beginning to wane, however?  It’s an argument made by The Economist, who remind us that the great cities of the world have suffered disproportionately from covid-19, both in terms of the concentration of fatalities and the slowdown in international travel that was so often their lifeblood.

Living in London during lockdown has illustrated this quite clearly.  The numerous things that make London one of the great cities of the world have been shut, whereas access to space and nature have been in short supply.  The virus has attacked the very essence of what makes cities such vibrant places to live.  Is this a temporary deflation, however, or something more likely to endure?

Losing their shine

Nowhere has this experience been more visceral than for the young people who often flock to the bright lights of the city for the experiences on offer.  This group have been among the first to lose their jobs during the pandemic, with the young over twice as likely to be as unemployed as the average 45 year old.  Among those who technically still have a job, many were placed on unpaid leave.

This is often compounded by the shorter time many young people have spent with their current employer.  Data suggests that workers under 30 average 31 weeks with their current employer, versus 115 weeks for those aged between 31 and 65.

The flipside of this is that, historically at least, young people would spend less time unemployed each time they lost a job, with the average time last year being just 11 weeks, versus roughly double that for workers aged 30 and above.

Obviously, for all the talk of the number of jobs being destroyed by the pandemic, there will be some being created as well.  It’s quite probable, however, that many career plans will have gone up in smoke over the past few months.

Out of the city

In Canada, however, nearly half of the jobs created between April and May were created outside of the nine main metropolitan areas.  There are many possible reasons for this, including difficulty with social distancing regulations, or changes to holiday plans may leave cities out in the cold.  Suffice to say, many jobs that can be done outside are carrying on as usual as physical distancing was a standard part of the job.  Despite this, many seasonal sectors continue to struggle to find workers.

Many of these opportunities are created in part due to the shortage of international workers as a result of the travel restrictions covid is placing on countries.  In Canada, however, while there is evidence that young people are moving into these new jobs at a higher rate than their older peers, it’s also clear that they are weighing up the pros of returning to the workforce against generous state payments of $1,250.

While it’s obviously difficult to say with any certainty just what the labor market will be like in a years time, it’s quite possible that the employment virtues of big cities may continue to wane for a bit longer yet.

For instance, it seems likely that universities will continue to teach remotely for a while longer, creating the opportunity for young people to continue their studies in lower cost locations, possibly working part-time into the bargain.

As Stanford’s Carol Dweck explains in recently published research on the key to success in life, there are times when we need to step back and assess whether our previous assumptions were correct.  She argues that a strategic mindset can help us do just that.

Having a degree of flexibility about the location and nature of employment can help young people make the most of what is undoubtedly an incredibly challenging labor market.  The skills gained in doing so are certain to be of value in the years ahead, regardless of what direction one’s career goes in.

For many years, the road to cities have been paved with gold, but, in the short-term at least, that allure might be somewhat diminished, and richer pickings might be found externally.