Read past the dry details of LinkedIn’s deal to open offices for nearly 3,000 workers in Sunnyvale and you’ll find the perfect Petri dish for the Moretti principle.
The book is a clear, easy to read primer on how job engines work in ways we might not have considered. Among the many gems in the work is Moretti’s conclusion that every high-tech job creates five additional jobs — three unskilled (barbers, waiters, nail salon employees) and two skilled (other high-tech workers, for instance).
LinkedIn’s planned expansion means not only 3,000 jobs, then, but 18,000 jobs. Consider that Google and Apple are also adding jobs in Sunnyvale and the place could become Morettiville in the next couple of years.
In the book, Moretti looks at Apple and Cupertino as an example. The world’s most valuable company, he writes, employes 12,000 people in the city, but is responsible for an additional 60,000 jobs in and around Cupertino.
“Incredibly, this means that the main effect of Apple on the region’s employment is on jobs outside of high tech… In essence, in Silicon Valley, high-tech jobs are the cause of local prosperity and the doctors, lawyers, roofers and yoga teachers are the effect. It is pretty simple: at the end of the day, someone has to pay for all those yoga sessions.”
Moretti goes on to lay out a convincing case for the importance of innovation clusters, like Silicon Valley, and why it is they are unlikely to shrivel up and go the way of Detroit.
Time will tell, but if you’re looking for a place to watch and learn, you could do worse than Sunnyvale, Calif.