“We’re just another country,” said a San Francisco venture capitalist at an amiable gathering of his peers last week.
“As long as ours is the reserve currency we have an advantage,” he said, “but that won’t last forever.”
So what does the future hold? His guess: permanently high unemployment, a stagnant economy, an unsettled political climate, and multiple industries in flux, as they seek to adjust to a new world.
In other words, plenty of opportunities to make money.
“Look at this,” said a 20-something woman. “It’s San Francisco. It doesn’t matter whether it’s in America or Poland-everyone wants to be here, if they can afford it.”
In the new world, comparative advantage will flow to cities, not to states and nations.
“It’ll be like the Middle Ages,” said another V.C.
The flow of smart people, deployable capital, and power to cities such as San Francisco, New York, London, and Paris will accelerate. Smaller cities may thrive, or they may wither – but they’re out of the game. They’re not independent actors, but insignificant bit players in a drama written, produced, and staged by others.
Just as the commercial world of the 16th century was created by the visionary merchants of Amsterdam, that of the 20th will be created by the combined intelligence of smart, competitive, and coldly realistic men and women who have migrated to the great cities.
And what does that mean for us?
“Why are you living in Colorado Springs?” the 20-something woman asked. “Isn’t that just admitting defeat?”
Welcome to irrelevance.