Trump, Twitter, and the Future of Urban Talent

Technology Firms will do to Cities what Trump did to Mainstream Media.

The industrial era was characterized by gatekeepers. Jobs were concentrated in large corporations. Such corporations were concentrated in large cities. Goods were mass manufactured in large factories and marketed on mass media. Cities were aggregated into nation-states, and multinational organizations were set up to facilitate trade between nations.

A handful of institutions determined how people should work, what should be made, who should be allowed in, and what was fit to print.

One by one, the gatekeepers of the industrial era are losing their strength. The news media offers a case in point. Plenty has been written about Donald Trump’s rise to power in face of fierce opposition and ridicule from the world’s most reputable news organizations. But Trump did not win despite traditional media’s attacks on him. He won thanks to traditional media’s inability to ignore him.

The evolution of Trump’s relationship with mainstream media — before the election and all the way to 2020 — offers a critical lesson about large cities and their relationship with technology firms.

Let’s explore.

Frenemies

“News as a business had been the first casualty of the public’s assault on the hierarchies of the industrial age,” says Martin Gurri. In The Revolt of the Public, Gurri describes and dissects the disintegration of the media landscape. The book was originally published in 2014 and provided a framework that explains some of the political upsets that followed, most notably Brexit and Trump. In 2018, Gurri added a closing chapter to the book to addresses these two suprirses directly.

At its core, Trump’s relationship with the media was more symbiotic than adversarial. The candidate used traditional news channels as a customer-acquisition channel. Trump could not have amassed so many alternative media followers without help from the mainstream.

As Gurri points out:

Media people pumped the helium that elevated Donald Trump’s balloon, and they did so from naked self-interest. He represented high ratings and improved subscription numbers.

The media kept reporting on Trump, amplifying his message, and positioning him as someone worth talking about. During the 2016 campaign, Trump received about $2 billion’s worth of media exposure for free — more than Hillary Clinton, Bernie Sanders, and all of the primary candidates from both parties combined.

In the past, a hated candidate would not have received that much exposure. The media could have simply ignored him or her. But, as Gurri explains, the media could not afford to ignore Trump in 2016:

Until the turn of the new millennium, the news media had controlled the information agenda. They could decide, on the basis of some elite standard, how much attention you deserved. In a fractured information environment, swept by massive waves of signal and noise, amid newspaper bankruptcies and many more TV news channels, every news provider approaches a story from the perspective of existential desperation.

The nuance of this point is important. The media was still powerful, very powerful. But social and other online media offered an alternative. The fact that viewers had a choice forced mainstream media to give Trump billions of dollars in exposure.

Traditional media did not just empower Trump’s campaign. It also enabled him to build his own, direct channel to the public. Trump had less than 3 million Twitter followers in 2015 when he announced he was running for president. 17 months later, a day before the election, he had nearly 13 million. For comparison, America’s most-watched non-cable news networks attract around 5 million viewers during prime-time on a normal day. The most-watched cable news network, Fox, attracts around 4 million.

In 2020, Trump has over 85 million followers. The real estate developer was famous even before running for office. But he was only one of thousands of celebrities vying for the media’s attention. Now, his combined reach eclipses the world’s largest news organizations. He needed the media to acquire new followers. Now, he can engage these followers directly on his own terms.

This might prove consequential in the elections, but that’s not what we’re here to discuss. Let’s go back to the city.

Make me Yours

In September 2017 Amazon published a request for proposal (RFP). Companies usually publish such proposals when they’re looking for a new service provider or vendor. But this RFP was different: It invited cities to bid for hosting Amazon’s new headquarters, HQ2.

Amazon wanted cities to offer tax breaks and other incentives that would make them attractive. In return, the company dangled the potential for 50,000 high-paying jobs and $5 billion in investment.

Within a month, 238 cities and regions submitted their proposals. The list included North America’s most prosperous urban centers — New York, San Francisco, Boston, Los Angeles, and Toronto. A year later, Amazon announced its decision: HQ2 was going to…. two different places, New York City’s LIC neighborhood, and Arlington, Virginia.

The New York plan didn’t pan out, following local opposition. But that’s a story for another time.

The HQ2 saga showed that large cities were losing their power:

  1. Economic incentives for large employers date back to the Great Depression. But a highly-publicized bidding process was out of the ordinary. Cities went out of their way to ingratiate themselves with the tech giant.

  2. Amazon was not looking to build a factory. It needed access to specialized talent. Prevailing economic theories emphasize the unique advantages of the largest labor markets. How could Amazon, arguably the world’s most competitive firm, even consider anywhere other than America’s handful of giant tech hubs?

  3. Amazon was not opening a regional office. It was splitting its headquarters in three, splitting its executive team and decision-making. How could that be? This, too, went against the prevailing economic theory that co-location was the mother of invention.

  4. We were told that large, diverse cities were magnets for talent and that employers flock to these cities because that’s where the employees already there. Amazon undermined this theory by considering a very long list of options and ultimately choosing a location that is not even a city (Arlington, Virginia).

The HQ2 RFP also showed that Amazon still needed cities.

Soaking the Pool

Explaining its decision to split its second HQ, Amazon wrote: “We can recruit more top talent by being in two locations.” This implied that the best talent was located in urban centers. In 2017, a company couldn’t simply access the world’s best talent from anywhere — cities were the gatekeepers.

A lot of this talent was not originally employed by the tech industry. In New York, for example, hiring by companies such as Google, Facebook, Apple, and Uber helped offset job losses in the city’s financial industry. The presence of experienced executives, mathematicians, engineers, dealmakers, marketers, and service providers made NYC attractive for tech firms. The dining and cultural establishments that were nurtured by decades of Wall Street excess added an extra layer of attraction.

New York staked its future on technology firms. The city’s economy is not as diverse as it seems. In 2019, the financial and tech sectors provided only 4% and 3%, respectively, of the city’s jobs. But they also provided 19% and 5% of overall pay. The financial sector is already in relative decline and tech is expected to pick up more of the slack. Here would also be a good place to note that half of NYC’s income tax is paid by a mere 100,000 households.

That was 2019. I am focusing on New York because it is America’s largest metropolis and most important economic center. It is also close to my heart. But other global cities faced similar challenges, to varying degrees.

And then we got to 2020.

The largest tech companies set their talent free. For a year or forever, hundreds of thousands of the world’s most valuable employees can now work from anywhere. Just like Trump and his followers, tech companies could not have acquired all this talent without being in cities. But now that they have, and now that technology and adoption reached a critical level — they might finally be able to hire anywhere.

It might be temporary. Trump needed CNN to conquer Twitter and gain direct access to an abundance of followers. Tech companies needed large cities to conquer the cloud and gain direct access to an abundance of talent.

Are the old gatekeepers strong enough to stage a comeback?

The November election will offer a hint.