A common trajectory recapitulated by urban economies

Published in arXiv preprint, 2018

Recommended citation: I. Hong, M. R. Frank, I. Rahwan, W.-S. Jung and H. Youn, "A common trajectory recapitulated by urban economies", arXiv preprint arXiv:1810.08330, (2018). https://arxiv.org/abs/1810.08330

Is there a general economic pathway recapitulated by individual cities over and over? Identifying such evolution structure, if any, would inform models for the assessment, maintenance, and forecasting of urban sustainability and economic success as a quantitative baseline. This premise seems to contradict the existing body of empirical evidences for path-dependent growth shaping the unique history of individual cities. And yet, recent empirical evidences and theoretical models have amounted to the universal patterns, mostly size-dependent, thereby expressing many of urban quantities as a set of simple scaling laws. Here, we provide a mathematical framework to integrate repeated cross-sectional data, each of which freezes in time dimension, into a frame of reference for longitudinal evolution of individual cities in time. Using data of over 100 millions employment in thousand business categories between 1998 and 2013, we decompose each city's evolution into a pre-factor and relative changes to eliminate national and global effects. In this way, we show the longitudinal dynamics of individual cities recapitulate the observed cross-sectional regularity. Larger cities are not only scaled-up versions of their smaller peers but also of their past. In addition, our model shows that both specialization and diversification are attributed to the distribution of industry's scaling exponents, resulting a critical population of 1.2 million at which a city makes an industrial transition into innovative economies.