Photo by Blake Wagner

September 21, METRANS Transportation Center held its second Research Seminar for the Fall 2016 semester, featuring Peter Gordon, Emeritus Professor of the USC Price School of Public Policy, and John Cho, Associate Regional Planner from the Southern California Association of Governments (SCAG). SCAG was the joint sponsor of this seminar. The featured research focused on the “agglomeration” effects in cities by utilizing business location data, especially at the levels below the metropolitan scale.

Photo by Blake Wagner

Professor Gordon started off the presentation, describing the project as a “work in progress” and explained that agglomeration and clustering are still crucial for cities to further their economic growth, despite an age of advanced communication technologies. He quoted several scholars to support his claim that complex, implicit information, or "tacit information," obtained via conversation cannot be duplicated electronically, reinforcing the value of face-to-face relationships and networks. He concluded that clustering is indispensable for exchanging goods as well as ideas. 

Dr. Cho continued the presentation by sharing the data sources and methodology used for this project. He utilized the "InfoUSA 2011" data sets, which provide firm locations with employee numbers by industry sector, to calculate the employment density. He used the "US IMPLAN 2013" data sets, which provide input-output dollar flow between sectors, to calculate technical coefficients that can be used to indicate co-location effects between sectors.

Cho divided employment density into quintiles, and demonstrated that, with the exception of software and the publishing industries, the largest firms choose areas with the highest density. Both the software establishment firms and the publishing industry firms spread over lower density areas among their respective sectors. Nevertheless, these two sectors choose to locate in areas where all industries cluster. The manufacturing firms and information sector firms, on the other hand, tend to cluster in high density both within their own sector and among all sectors.   

In the subsequent Q&A discussion, one student inquired as to why software companies agglomerate less. Professor Gordon replied that “the only possible answer is that they are adequately communicating, or exchanging ideas, electronically,” and emphasized that “clustering and networking substitute for each other,” thus companies that agglomerate less are presumably exchanging goods and ideas via networking. 

Jimmy Mai

Mai is a second-year Master of Civil Engineering student focusing on Transportation Engineering. He is currently an intern for the City of Los Angeles Bureau of Engineering, a Student Assistant for METRANS, and the Vice President of the ITE USC chapter. Mai is interested in multimodal transportation, parking management, and transit.