A real world example of how Edward Glaeser is right about cities

Edward Glaeser is an economist at Harvard who, among other things, does a lot of work on why cities thrive. He argues that density fosters personal interaction and creativity. He explains how this works in the NY Times here. Here is the core of his argument:

Understanding the appeal of proximity — the economic advantages of agglomeration — helps make sense of the past and future of cities. If people still clustered together primarily to reduce the costs of moving manufactured goods, then cities would become increasingly irrelevant as transportation costs continue to decline.

If cities serve, as I believe, primarily, to connect people and enable them to learn from one another, than an increasingly information-intensive economy will only make urban density more valuable.

Apparently he's right! At least with regard to proximity to the Twitter dudes. From today's NY Times Business section:

Start-Ups Follow Twitter, and Become Neighbors
By CLAIRE CAIN MILLER
Published: November 11, 2010



SAN FRANCISCO — When Joe Fernandez, a tech entrepreneur, moved his start-up here last spring, a big goal, he said, was “to be best friends with the Twitter guys.” His theory was that by hanging around with executives at one of the hottest tech companies today, some of the magic could rub off.

And so he snagged an office at 795 Folsom, Twitter’s headquarters in the SoMa neighborhood. There, he has been stalking executives on — where else? — Twitter, to see who is to visit Twitter’s offices. When he finds out, he pounces and “hijacks the meeting,” he said, by asking them to swing by his company, Klout.

By doing that, he has met Robert Scoble, the influential technology blogger, and Steve Rubel, director of insights for the digital division of Edelman, the big public relations firm, and has spotted Kanye West in the lobby on his way to Twitter.

Through elevator and lobby run-ins, he has also forged a close enough relationship with Twitter’s chief executive, Dick Costolo, that Mr. Costolo is helping Klout raise venture capital. “Now I have his cellphone, and I text him,” Mr. Fernandez said.

Mr. Fernandez is not the only Silicon Valley entrepreneur trying to follow Twitter — literally. Although the beige-and-brown office building at 795 Folsom doesn’t have a gym, a cafeteria, decent iPhone reception or a particularly attractive facade, tech start-ups are jostling to rent offices there. Like middle schoolers drawn to the popular kid’s table in the lunchroom, they are hoping that proximity to Twitter will lead to chance encounters in the elevator, partnerships or an acquisition — or simply that some of Twitter’s fairy dust will land on them.

This example does not fully solve the issue of density or proximity, but it is a nice example of why some cities thrive. Other questions come up, however: How steep is the bid-rent curve? Does it even extend to a block away, so rather than elevators you run into the Twitter guys in the local coffee shops? How much are people willing to pay to for elevator encounters?