The localized economies of scale could create virtuous circle.

It is a tipping point dynamic: because

once a city attracts some innovative workers and companies, other companies will do the same and
cause the economy changes.

 What can be done in cities with the wrong mix of jobs and skills?
 Can we reproduce the experience of innovation clusters elsewhere?

This book provides example about bio tech companies. In 1970s bio tech labs is located in many
areas. Today, the industry is concentrated in just three areas. Which are: San diego, San fransisco,
and Cambrige-boston. But why these 3 areas included? It is because all of them had premier
universities, such as Harvard university in Cambridge, stanford university in San Francisco California.
Of course, the academic stars from those universities would be selected to help in the making of
startup companies because startup needs to be personally engaged by them to do a research. Also,
the presence of those universities increased both demand and supplies of skilled workers. So
basically, the economy of successful city is based on equilibrium between supply and demand:
innovative companies (the labour demand) want to be there because they know they will find
workers with the skills they need, and skilled workers (the labour supply) want to be there because
they now they will find jobs they are looking for. The struggling city is the opposite.

From the explanation before, the condition would rise poverty traps because the weak areas would
become weaker. It called a trap because the good companies will leave due to lack of skilled labour,
and the skilled labour would also leave because lack of good jobs. And the successful areas will
become stronger as the labour and knowledge become thicker.

And by the way, according to the discussion of this chapter. Poor but sexy city, this book mentioned
Berlin as poor but sexy city because the country has so many young college students (cultural
landscapes), public arts, has affordable house markets, high quality child care, but Berlin also has
highest unemployment rates. To overcome this problem, the government must take an action to
make the people focused on development or maybe investment. I’ve read some news about Berlin
today in 2019, the private sectors now are rich in ideas, jobs, and growth capital, Berlin re-emerged
as a business hub. Berlin attracted 3 billion euro in startup funding last year. This is reflected in this
year’s Financial Times top 1000 of the fastest growing business in Europe, 24 of which are based in
the German capital.