Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.
Nonstop flights between cities are a more effective way of generating inter-city investment than increased airport capacity.
Not long ago, it was thought that planes would flatten the world, spreading us out even more than the rise of railroads and cars did in previous eras. But the reality has been much the reverse. Airplanes, airports, and air travel have contributed to our geographic spikiness, fueling the growing concentration of population and economic activity in a small number of large, productive, and well-connected superstar cities.
That’s one of the key findings of a recent study on the effects of global airports and air connectivity on economic and urban development. The study, by economists at Harvard University’s Kennedy School of Government and the University of Zurich, examines air travel’s role in the economic performance of more than 819 cities and metro areas in 200 different countries. Using detailed data from the International Civil Aviation Organization, it looks specifically at how direct flights facilitate business links and investments between pairs of cities, with data on over half a million businesses and more than 30,000 major business events around the world.
To isolate the significance of direct inter-city flights, the study makes use of an interesting quirk of global aviation regulations. Due to restrictions on crew shifts, flights of more than 12 hours, or 6,000 miles, are significantly more expensive to operate, and thus much less common. This means that some cities, simply by way of their geography, are more likely to have more numerous direct flight links, which, in turn, facilitate more business connections.
The map above shows global cities with high, low, and medium connectivity within the 5,500-to-6,500-mile range; “high connectivity” means that most of the other cities in one city’s range fall below 6,000 miles. Various levels of connectivity are distributed in seemingly random bands across the globe. One stretches southwest from San Francisco, across Central America and northern South America. Another starts in central China and stretches across southern India. A band of low connectivity stretches south from central Asia, across the Arabian peninsula and parts of east and central Africa. And so on.
Zooming in on San Francisco, we see a city where a large proportion of the air links within the 5,500-to-6,500-mile window are below 6,000 miles. As the map above shows, San Francisco’s sweet spot just catches Santiago and Valparaiso before swinging across South America and over the Atlantic. It then catches a huge swath of western and central Europe, from Madrid to Moscow, after which it passes over northern Asia and the Korean Peninsula.
But what is the economic significance of these accidents of geography, and what is the role of airports and air connectivity in reinforcing or mitigating them?
On average, increasing a given city’s “network centrality,” or the number of airports within that 5,500-to-6,000-mile sweet spot, increases GDP growth by 0.8 percent, the study finds. Additionally, city pairs just below the 6,000-mile threshold, which are much more likely to have direct flights, are also more likely to have more significant business connections. Milan and Shanghai, for instance, are 5,650 miles apart, while Madrid and Shanghai are 6,350 miles apart. The former pair has three times more business ownership links than the latter.
Or, consider the difference between Shanghai and Jakarta. Three quarters of the major airports located between 5,500 and 6,500 miles from Shanghai are below the 6,000-mile mark, making it a very high connectivity city. But for Jakarta, only one-third of major airports in this window are below the 6,000-mile mark. While this accident of geography doesn’t fully explain Jakarta’s relatively slower pace of economic development compared to Shanghai, it still may have a small but significant effect.
While there is nothing cities can do about their geography, they can be strategic about air connectivity. Perhaps the main practical takeaway from the study is that direct flight connections with particular cities mean a great deal more than airport capacity per se. The study confirms what many of us intuitively know: Changing planes is a pain in the neck—so much so that it actually affects inter-city investment patterns.
Pairs of cities with at least one weekly connection have, on average, significantly higher levels of business connections than those that are not connected by a weekly direct flight. As the study notes, “Cities that are well-placed in terms of obtaining additional long-range air links end up with a greater number of business connections with distant places.” Cities like Singapore and Dubai, for example, have been lauded for investing in expensive state-of-the-art global airports, but the size, scale, and fanciness of an airport seems to matter less than having the right set of flight connections to the right set of global cities. In other words, what really matters is not just a major global airport, but the capacity to connect far-flung centers of population and economic activity more seamlessly by air.
The key here lies in the way global air connectivity links together and reduces the effective distance between people and ideas in far-flung locations. My own research has shown that airports play their most important role in moving people and ideas, as opposed to goods and cargo. Indeed, the study notes, “The movement of people fosters the movement of capital: the ability to establish face-to-face contact between people is an important factor buttressing the ability to do business.” Airplanes, airports, and air travel help make this critical linkage possible, and it is made a great deal easier when people don’t have to change planes.
But while global airports and air connectivity can bring some places together, their absence also drives other places further apart, contributing to growing geographic inequality on a global scale. It is mainly more advanced and affluent cities that are connected, while a lack of connectivity compounds the isolation and disconnection of less advantaged places.
Geography and connectivity continue to matter, and matter mightily, even in our technologically advanced world where we can connect with each other seamlessly and instantaneously via Facebook, Twitter, or Skype. When it comes to establishing real economic connections and enabling real flows of people and ideas between cities, the combination of geographic location and air connectivity is key. While global airports matter, that does not mean every city has to spend billions to create a state-of-the-art new airport. A city may be just as well served—and even better served, strategically, on a cost-benefit basis—by simply pursuing nonstop connections to the cities with which they intend share ideas and do business.
The article summarizes research and contains figures from Long-Range Growth: Economic Development in the Global Network of Air Links, forthcoming for publication in the Quarterly Journal of Economics, published by Oxford University Press. For permissions to reuse the figures presented herein, please contact journals.permissions@