The Mega-region

The April 12th, 2008 Wall Street Journal has an article, “The Rise of the Mega Region” (Hat tip Pankaj Kumar) which argues that rather than entire countries, the proper unit of analysis in the context of economic growth and competitiveness should be the mega-regions.

The real driving force of the world economy is a new and incredibly powerful economic unit: the mega-region.

Extending far beyond a single core city and its surrounding suburbs, a mega-region is an area that hosts business and economic activity on a massive scale, generating a large share of the world’s economic activity and an even larger share of its scientific discoveries and technological innovations.

While there are 191 nations in the world, just 40 significant mega-regions power the global economy. Home to more than one-fifth of the world’s population, these 40 megas account for two-thirds of global economic output and more than 85% of all global innovation.

The author, Richard Florida, notes that “The problem is that much of our public policy not only ignores the rise of the mega-regions, it actually works against them. If we want to bolster economic competitiveness and ensure long-run prosperity, we must pursue policies that take mega-regions into account.”

. . . it’s time to stop transferring wealth from our most productive mega-regions to lagging places. In the U.S., the past 50 years have seen a massive transfer of tax money from innovative and prosperous mega-regions on the East and West coasts to the South. While this transfer may be a boon to local politicians and developers, such misguided policy has diverted economic resources away from the core mega-regions where they can be used most productively.

This transfer of wealth from the most productive to the least productive is seen most starkly in Mumbai’s case. Mumbai is starved for resources even though it is one of the most productive regions in India. As I have been arguing for a while, cities are the engines of growth and if one wants to help the people of rural India, India has to move them to where they will be most productive. And that means that India has to build cities that are livable and which will be the target of the inevitable rural to urban migration.

India’s development requires that the rural population is urbanized since urbanization is a cause (and also a consequence) of development.

Though the article is written in the US context but much of it applies to India also. I have been arguing about fast rail connectivity between India’s metros. The WSJ article says:

. . . our urban policy should not be aimed only at improving schools, creating affordable housing and redistributing income. Urban policy must also start to address economic competitiveness. It must strengthen mega-regions by improving fast-rail transit between their nodes, modernizing airports, and achieving greater cross-border flows of goods and people.

I think it is time that India starts to seriously re-think its fetish with villages. One of Gandhi’s fetishes (and he had a few strange ones such nude sleepovers with teenage girls) was villages, and Gandhi is an Indian fetish. So this strange fascination with villages is really fetish-squared.

Related links:

(1) I have a 10-part series which begins with this post: Ancient Cities, Modern Slums.

(2) An Integrated Rail Transportation System (IRTS). And a follow up to it: IRTS Revisited.