Megaregions: The Importance of Place
(HBR : March 2008) by Richard Florida
Nations have long been considered the fundamental economic units of the world, but that distinction no longer holds true. Today, the natural units – and engines – of the global economy are megaregions, cities and suburbs in powerful conurbations, at times spanning national borders, forming vast swaths of trade, transport, innovation, and talent.
The world economy is organized around a few dozen megaregions – areas like the Boston-New
York-Washington corridor, or the Shanghai-Nanjing-Hangzhou triangle, or the span stretching from London through Leeds, Manchester, Liverpool, and into Birmingham – which account for the bulk of the globe’s economic activity and innovation.
There is no single, comprehensive source for gauging the economic production of the world’s megaregions, but a rough proxy is available. Tim Gulden, a researcher at the University of
Maryland’s Center for International and Security Studies, used satellite images of the world at night to identify contiguous lighted regions. (Nighttime illumination indicates energy consumption, which corresponds to economic activity.) He then calibrated the light data against existing estimates of national and regional economic output and was able to derive dollar estimates of annual economic productivity (the total value of goods and services produced) for every mega-region. I call this measure the light-based regional product, or LRP.
Gulden argues that a megaregion must meet two criteria: First, it must be a contiguous lighted area that includes at least one major city center and its metropolitan region. Second, it must have an LRP of more than $100 billion. By this defi ni-tion, there are 40 megaregions in the world.
Home to 1.2 billion people – 18% of the global population – these regions combined produce about 66% of the world’s economic