Chicago-market for the Midwest

Early Warning has an interesting post riffing on a David Brooks column about Chicago and Rahm Emmanuel.

My own take is that what a metropolitan area needs more than anything is a core competence in a growth export industry.  In the SF Bay area, the core competence is designing high technology products.  In LA, it is the entertainment industry.  In New York and environs, it's the financial industry.  When a city has that kind of core competence, firms in that industry can grow more easily because they can attract experienced and talented employees.  Meanwhile, people with skills in that field are drawn to that city because there is a diversity of employers.  The firms in the core industry export their products or services globally, and the resulting income then can support all manner of other commerce with a more local orientation (eg health care providers, grocery stores, construction businesses).

When a city's core competence is in decline, then the city is likely to be in trouble - think Detroit and similar manufacturing cities in the rust belt, suffering as US manufacturing has struggled to compete with Asia.

My assumption is that Chicago's core raison d'etre has always been managing the financing, trade, and export of the output of the world's greatest industrial agricultural belt - the US upper midwest.  In an era of high food prices, that's probably a decent position to be in.  On top of that, it has managed to build an unusually diverse set of industries that take advantage of the large and skilled population.

The entire post is worth a read.  The graphics are pretty cool.