These are the 20 best-performing stocks of the past decade, and some of them will surprise you - MarketWatch

As we approach the end of 2019, it’s time not only for year-end lists, but end-of-decade lists.

U.S. stocks have had what can only be called an excellent decade. MarketWatch will feature a number of forward-looking articles building on the past decade’s action. Today we’re taking a look back.

The Dow Jones Industrial Average DJIA, +1.22%  returned 165% (with dividends reinvested) and the S&P 500 Index SPX, +0.91% returned 244% from the end of 2009 through Dec. 5, 2019. We’re not quite at the end of 2019, but if we were, and those figures held, the compounded annual growth rate for the Dow would be 10.2%. For the S&P 500, it would be 13.2%.

That average return for the S&P 500 measures up well when compared with the 10% average for the almost 100-year period of June 30, 1927, through Sept. 30, 2019, the longest period available using custom research.

For the past decade, we reviewed the entire S&P 500, as it is currently constituted, to see which stocks performed best. Among the 500 companies, 46 have traded in their present form for less than 10 years, so they are excluded.

Here’s a list of companies whose stocks performed the best,with reinvested dividends, from the end of 2009 through Dec. 5:

Company	Ticker	FactSet industry category	Total return - 2010	Total return - Dec. 31, 2009, through Dec. 5, 2019	Years ranked within top 10 performers
Netflix Inc.	NFLX, +1.48%	Cable/Satellite TV	219%	3,767%	3
MarketAxess Holdings Inc.	MKTX, -1.39%	Investment Banks/Brokers	52%	3,182%	2
Abiomed Inc.	ABMD, +0.08%	Medical Specialties	10%	2,121%	3
TransDigm Group Inc.	TDG, +0.90%	Aerospace & Defense	52%	2,065%	0
Broadcom Inc.	AVGO, +1.56%	Semiconductors	56%	1,919%	1
Align Technology Inc.	ALGN, +0.43%	Medical Specialties	10%	1,458%	1
United Rentals Inc.	URI, +2.70%	Finance/Rental/Leasing	132%	1,434%	1
Regeneron Pharmaceuticals Inc.	REGN, +1.06%	Biotechnology	36%	1,430%	2
Ulta Beauty Inc.	ULTA, +11.09%	Specialty Stores	87%	1,233%	1
Amazon.com Inc.	AMZN, +0.64%	Internet Retail	34%	1,209%	1
Extra Space Storage Inc.	EXR, +0.39%	Real Estate Investment Trusts	55%	1,166%	1
Constellation Brands Inc. Class A	STZ, +0.65%	Beverages: Alcoholic	39%	1,124%	0
Nvidia Corp.	NVDA, +1.64%	Semiconductors	-18%	1,117%	2
Take-Two Interactive Software Inc.	TTWO, -0.19%	Recreational Products	22%	1,114%	1
Ross Stores Inc.	ROST, +0.37%	Apparel/Footwear Retail	50%	1,081%	0
Fortinet Inc.	FTNT, -1.26%	Computer Communications	84%	1,079%	1
Mastercard Inc. Class A	MA, +0.19%	Finance/Rental/Leasing	-12%	1,078%	1
Charter Communications Inc. Class A	CHTR, +0.12%	Cable/Satellite TV	10%	1,077%	0
O'Reilly Automotive Inc.	ORLY, +1.03%	Specialty Stores	58%	1,060%	1
Cintas Corp.	CTAS, +0.60%	Other Consumer Services	11%	1,053%	0
Source: FactSet

You can click on the tickers for more about each company.

The right-most column shows the number of times each stock was among the top 10 performers over the past 10 individual years (including 2019 through Dec. 5).

Netflix NFLX, +1.48%  is far ahead of the pack, with a spectacular 3,767% return. That translates to a compounded annual growth rate (CAGR) of 44.1%. Amazon.com AMZN, +0.64%  ranks 10th, and its 1,209% return translates to a CAGR of 29.3%. Apple AAPL, +1.93%  ranks 28th, with a total return of 899% and a CAGR of 25.9%.

It’s interesting that some of the best performers for 10 years weren’t among the top 10 during any individual year. TransDigm TDG, +0.90%, for example, ranks fourth, with a 2,067% return (CAGR of 36%). The company has a very important advantage in the aerospace industry — a high barrier for entry in the market for specialized replacement parts for aircraft. In April, Will Muggia of Westfield Capital Management called TransDigm “the best managed company in America.”

Sectors

Here’s how the 11 sectors of the S&P 500 have performed from the end of 2009 through Dec. 5, 2019, with dividends reinvested, according to FactSet:

S&P 500 Sector	Total return - Dec. 31, 2009, through Dec. 5, 2019
Information Technology	390%
Consumer Discretionary	381%
Health Care	287%
Industrials	242%
Consumer Staples	205%
Financials	204%
Utilities	204%
Communication Services	151%
Materials	134%
Energy	31%
Source: FactSet

2019 winners — so far

Here are the 20 best-performing S&P 500 stocks for 2019 through Dec. 5:

Company	Ticker	FactSet industry category	Total return - 2019, through Dec. 5	Total return - Dec. 31, 2009, through Dec. 5, 2019	Years ranked within top 10 performers
Advanced Micro Devices Inc.	AMD, +0.03%	Semiconductors	115%	310%	3
Lam Research Corp.	LRCX, +1.90%	Electronic Production Equipment	98%	632%	1
Xerox Holdings Corp.	XRX, -0.13%	Computer Peripherals	96%	122%	1
Target Corp.	TGT, +0.28%	Specialty Stores	95%	241%	1
Chipotle Mexican Grill Inc.	CMG, +0.34%	Restaurants	90%	818%	3
Coty Inc. Class A	COTY, +0.85%	Household/Personal Care	87%	N/A	1
KLA Corp.	KLAC, +0.86%	Electronic Production Equipment	85%	629%	1
Copart Inc.	CPRT, +0.39%	Miscellaneous Commercial Services	85%	851%	1
Arconic Inc.	ARNC, +1.77%	Aluminum	82%	N/A	1
MarketAxess Holdings Inc.	MKTX, -1.39%	Investment Banks/Brokers	82%	3182%	2
MSCI Inc. Class A	MSCI, +2.27%	Financial Publishing/Services	79%	770%	1
ANSYS Inc.	ANSS, +1.44%	Packaged Software	77%	480%	0
TransDigm Group Inc.	TDG, +0.90%	Aerospace & Defense	76%	2065%	0
Qorvo Inc.	QRVO, +0.78%	Semiconductors	74%	445%	1
Applied Materials Inc.	AMAT, +1.36%	Industrial Machinery	74%	393%	1
Leidos Holdings Inc.	LDOS, +0.81%	Information Technology Services	73%	212%	0
Global Payments Inc.	GPN, -0.15%	Data Processing Services	72%	560%	1
Fortune Brands Home & Security Inc.	FBHS, +1.10%	Building Products	71%	N/A	0
Apple Inc.	AAPL, +1.93%	Telecommunications Equipment	71%	899%	0
Tyson Foods Inc. Class A	TSN, -0.01%	Food: Meat/Fish/Dairy	71%	723%	0
Source: FactSet

Once again, the right-most column shows how many times each stock was among the top 10 performers over the past 10 individual years (including 2019) through Dec. 5.

Don’t miss: These numbers will tell you if your tech stock is a plodding dinosaur or a speedy raptor

Create an email alert for Philip van Doorn’s Deep Dive columns here.

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2019-12-09 13:32:00Z
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Paul Volcker, the Carter-Reagan Fed chairman who beat inflation, dies at age 92 - CNBC

President Reagan and Fed Chairman Paul Volcker meet in the Oval Office on July 16, 1981.

Bettmann | Bettmann | Getty Images

Paul Volcker, who as chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan helped tame inflation with 22% interest rates that also crunched American manufacturing, farming, and real estate but led the way to two decades of expansion, has died. He was 92. He died on Sunday, according to The New York Times and The Washington Post.

Years after the Great Recession, Volcker headed President Barack Obama's Economic Recovery Advisory Board and pushed to create a namesake regulation, the Volcker rule, which sought to rein in commercial banks by prohibiting them from making the risky investments that helped spark the 2007 financial collapse.

The cigar-smoking Volcker, who stood 6-foot-7 and was known as "Tall Paul," was appointed Fed chairman by Carter in August 1979, was renominated by Reagan in 1983 and served until 1987. Even before his 1979 nomination, he had a reputation as an inflation buster.

"In terms of economic stability in the future, that [inflation] is what is likely to give us the most problems and create the biggest recession," Volcker said in a 1979 Fed Open Markets Committee meeting months before he became the central bank's chairman.

The inflation rate was 1% under President Lyndon Johnson in 1965 but ballooned to a breakneck 14.8% in March 1980. To combat the price rises, Volcker's Fed jacked up the federal funds rate and tightened the money supply. The rate, used by banks and credit unions for overnight loans to other depository institutions, reached a record 22.36% in July 1981. (By comparison, it was zero to 0.25% from December 2008 to December 2015, during the financial crisis and its aftermath.) Shortly after becoming Fed chairman, Volcker raised the discount rate by 0.5%, which would be considered a sizable jolt today.

Paul Volcker, former chairman of the U.S. Federal Reserve.

Peter Foley | Bloomberg | Getty Images

One of his big concerns was to change the expectations, and hence the actions, of people who believed prices would continue to rise rapidly.

"We are dealing with an inflationary momentum, and patterns of thinking and behavior, that have developed over decades," Volcker told the National Press Club in September 1981. "Something like half the working population — those under age 35 — have never known price stability in their working experience. ... We have become accustomed to living with inflation, adjusting to it — and anticipating more. And as we have done so, we unwittingly set in motion forces that have kept it going."

Within two years of the Fed's peak interest rate, inflation fell below 3%, ending the period dubbed the Great Inflation.

Still, the high interest rates had their stifling effects. The economy plunged into recession. Before the 2007-09 bust, the 1981-82 recession had been the worst economic downturn in the United States since the Great Depression. The unemployment rate in 1982 hit 10.8% — more than 1 in 10 would-be workers — still the highest since 1940.

Volcker was vilified. A trade publication, the Tennessee Professional Builder, published a "wanted" poster of Volcker in early 1982 and accused him and the Fed of "premeditated and cold-blooded murder of millions of small businesses."

"Without his bold change in monetary policy and his determination to stick with it through several painful years, the U.S. economy would have continued its downward spiral," William Poole, former president of the St. Louis Federal Reserve, wrote in a 2005 tribute. "By reversing the misguided policies of his predecessors, Volcker set the table for the long economic expansions of the 1980s and 1990s."

Paul Volcker speaks while President Barack Obama listens before he signed an executive order establishing the Economic Recovery Advisory Board on Feb. 6, 2009, in Washington, DC.

Mark Wilson | Getty Images

Paul Adolph Volcker Jr. was born in Cape May, New Jersey, on Sept. 5, 1927, and grew up in Teaneck, where his father was the manager of the leafy northern Jersey suburb. He graduated summa cum laude from Princeton in 1949, later received a master's degree in political economy from Harvard and became an economist at the New York Federal Reserve in 1952. He went on to work at Chase Manhattan Bank and the Treasury Department, where he served as President Richard Nixon's undersecretary of the Treasury for international monetary affairs from 1969 to 1974.

With unemployment and inflation growing and demand for the dollar weakening, the economy was in crisis mode in 1971. Volcker was among the White House economic advisors, including Fed Chairman Arthur Burns and Treasury Secretary John Connally, who created the "Nixon shock" policies. First, they unilaterally canceled the direct international convertibility of the U.S. dollar to gold — effectively ending the post-war Bretton Woods system of fixed currency exchange rates — and then imposed a 90-day freeze on wages and prices to check inflation, the first such non-wartime controls.

Volcker left the Treasury in 1974 and became a senior fellow at Princeton's Woodrow Wilson School. Almost exactly a year after Nixon resigned as president in August 1974, Volcker returned to the central bank as president of the New York Fed, where he advocated monetary restraint.

Volcker's concern about inflation had a lasting impact on the central bank. Monitoring rising prices is one of the Fed's dual mandates, along with employment trends, in taking the pulse of the economy and setting interest rates.

After his inflation-busting days at the Fed, Volcker became chairman of the Wolfensohn & Co. investment firm. In 1996, he led a commission that investigated dormant Swiss bank accounts of Jewish victims of the Holocaust. His work led to a settlement of $1.25 billion.

In the aftermath of the Great Recession, he led Obama's economic recovery board from 2009 to 2011. He was critical of financial institutions' roles in bringing on the 2008 economic meltdown and called for limiting the size of the nation's biggest banks. As such, he was instrumental in the creation of the Volcker rule, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule sought to prevent commercial banks from using their own funds to invest in derivatives, hedge funds, and private-equity firms.

Volcker wrote nine books, including "Keeping At It: The Quest for Sound Money and Good Government," a memoir published in October 2018 — when he was 91.

"I had no intention of writing a book, but there was something that kind of was irritating me," he told The New York Times columnist and CNBC host Andrew Ross Sorkin at the time. "I'm really worried about this governance thing."

Referring to the state of the nation, he added: "We're in a hell of a mess in every direction."

Survivors include his wife, Anke Dening, and two children from his first marriage to Barbara Bahnson, who died in 1998.

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2019-12-09 14:03:00Z
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A new theory on what shocked the overnight lending market - CNN

When turmoil erupted in the US overnight lending market in September, it came as a big surprise.

The spike in overnight borrowing rates forced the Federal Reserve to come to the rescue, pumping in lots of cash and restarting bond purchases. This eased any panic, and appears to have helped juice the stock market as an unintended side effect.

But a big question has loomed: What caused the shock, unprecedented since the global financial crisis?

In a new report, the Bank for International Settlements points to larger problems at play. This corner of the market relies heavily on the largest four US banks — and those banks have been holding more liquid assets in US Treasuries compared to what they store with the Federal Reserve, BIS notes. This could have contributed to the cash crunch.

Another factor: hedge funds, which have been financing more trades through this part of the market, per BIS.

The debate over what caused the problems in so-called "repo" markets is likely to continue. In the meantime, stocks could keep benefitting from the Fed's intervention.

Morgan Stanley estimates that global stocks have seen nearly $175 billion in inflows since September, with two-thirds of that heading to the United States. "So long as central banks keep pumping this liquidity in, and trade negotiations don't break down, we see little reason to think this can't continue," the bank's equity strategists told clients Monday.

Investors gear up for a huge week

If markets look calm this morning, it's just because traders are holding their breath ahead of what looks to be a very eventful week.

On the calendar:

• The Federal Reserve announces its latest decision on interest rates Wednesday. The European Central Bank will follow on Thursday.
• The United Kingdom holds its third general election in four years on Thursday, with big consequences for Brexit (and the pound).
• Another round of US tariffs on Chinese goods is set to go into effect on Sunday, December 15. That gives President Donald Trump less than a week to strike some kind of trade agreement with China.

Investors expect the Fed and the ECB to stay on hold as the trade environment remains uncertain, and the pound has rallied as traders bet that Prime Minister Boris Johnson will win the UK election, providing a clearer path forward on Brexit. But Wall Street is bracing for surprises.

"We may be reflecting back on this a week from now as hugely anticlimactic, but there's certainly huge potential for the opposite to be true," said Craig Erlam, senior market analyst at Oanda. "It's going to be exciting."

The outlook on trade, in particular, is extremely murky. With China posting a 1.1% drop in exports in November, there's clearly economic incentive to get a deal done. But whether both sides can actually reach an agreement by Sunday remains an open question.

Oil has jumped nearly 5% in the past week

Brent crude, the international benchmark for oil prices, is down 0.8% Monday. But it's still up nearly 5% in the past week, helped by the decision from OPEC, Russia and other oil producing nations to deepen production cuts in an attempt to support prices.

OPEC said Friday that the producer group would curb supplies by an additional 500,000 barrels per day, bringing the total cuts — which have been in place since 2017 — to 1.7 million barrels daily. Analysts said the rally gained strength after Saudi Arabia made clear it would continue to cut by more than its quota.

The timing for the surge is important. Shares of Saudi Aramco, Saudi Arabia's oil monopoly, start trading on Wednesday. Saudi leaders will be pleased that oil is now close to $64 a barrel, and not below $58, as in early October.

Chewy (CHWY) and Stitch Fix (SFIX) report results after US markets close. It's otherwise a slow day for economic data ahead of a very busy week.

Coming tomorrow: The UK releases GDP data for October ahead of Thursday's election.

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2019-12-09 12:09:00Z
CAIiEOU918ZJXEVQuo7_WwUEs9MqGQgEKhAIACoHCAowocv1CjCSptoCMMSUnAY

Sanofi to acquire Synthorx for $2.5 billion - MarketWatch

Sanofi SA said Monday that it will acquire biotechnology company Synthorx Inc. for an aggregated equity value of around $2.5 billion.

The French pharmaceutical company SAN, -0.55% SNY, -0.11%  said it plans to take control of all outstanding shares of Synthorx THOR, +0.20%  for $68 per share in cash.

The acquisition of Synthorx, which is expected to close in the first quarter next year, will strengthen Sanofi’s existing immuno-oncology portfolio, it said.

The takeover is “aligned with our goal to build our oncology franchise with potentially practice-changing medicines and novel combinations,” Sanofi’s Chief Executive Paul Hudson said.

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2019-12-09 09:07:00Z
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A Few Cities Have Cornered Innovation Jobs. Can That Be Changed? - The New York Times

There are about a dozen industries at the frontier of innovation. They include software and pharmaceuticals, semiconductors and data processing. Most of their workers have science or tech degrees. They invest heavily in research and development. While they account for only 3 percent of all jobs, they account for 6 percent of the country’s economic output.

And if you don’t live in one of a handful of urban areas along the coasts, you are unlikely to get a job in one of them.

Boston, Seattle, San Diego, San Francisco and Silicon Valley captured nine out of 10 jobs created in these industries from 2005 to 2017, according to a report released on Monday. By 2017, these five metropolitan regions had accumulated almost a quarter of these jobs, up from under 18 percent a dozen years earlier. On the other end, about half of America’s 382 metro areas — including big cities like Los Angeles, Chicago and Philadelphia — lost such jobs.

And the concentration of prosperity does not appear to be slowing down.

America’s deepening inequality has become a cause for alarm. The picture of a country cloven between a small set of prosperous urban “haves” and a large collection of “have-nots” has come sharply into focus as an opioid epidemic has overtaken vast swaths of the country. It gained the attention of the political class in 2016, when voters across the industrial heartland embraced Donald J. Trump’s populist message.

The search for ideas that could improve the economic conditions of deprived areas, long derided by economists as a fool’s errand — why spend money on improving the lot of places rather than people, many experts argued — is now at the top of policymakers’ lists.

The report is by Mark Muro and Jacob Whiton from the Brookings Institution’s Metropolitan Policy Program, and Rob Atkinson of the Information Technology and Innovation Foundation, a research group that gets funding from tech and telecom companies. They identified 13 “innovation industries” — which include aerospace, communications equipment production and chemical manufacturing — where at least 45 percent of the work force has degrees in science, tech, engineering or math, and where investments in research and development amount to at least $20,000 per worker.

The authors argue that a broad federal push is needed to spread the business of invention beyond the 20 cities that dominate it. “Hoping for economic convergence to reassert itself would not be a good strategy,” Mr. Muro said.

Metro areas that have

gained innovation jobs . . .

2

4

7

1

9

8

3

6

5

10

75,000

10,000

1,000

Gained the most

In thousands

6

Raleigh, N.C.

+12

1

San Francisco

+77

2

Seattle

+56

7

Madison, Wis.

+12

3

Silicon Valley

+52

8

Denver

+10

9

Salt Lake City

+ 8

4

Boston

+26

10

Charleston, S.C.

+ 7

5

San Diego

+20

. . . and those that

have lost them.

20

19

15

13

16

14

11

12

17

18

Lost the most

In thousands

16

Wichita, Kan.

–8

11

Oxnard, Calif.

–5

17

Los Angeles

–8

12

Albuquerque

–5

13

Colorado Springs

–5

18

Dallas

–9

14

Durham, N.C.

–6

19

Philadelphia

–9

15

Washington

–7

20

Chicago

–13

Metro areas that have gained

innovation jobs . . .

2

4

7

1

9

8

3

6

5

10

75,000

10,000

1,000

Gained the most

In thousands

Lost the most

In thousands

16

Wichita, Kan.

–8

11

Oxnard, Calif.

–5

1

San Francisco

+77

6

Raleigh, N.C.

+12

17

Los Angeles

–8

12

Albuquerque

–5

7

Madison, Wis.

+12

2

Seattle

+56

13

Colorado Springs

–5

18

Dallas

–9

3

Silicon Valley

+52

8

Denver

+10

14

Durham, N.C.

–6

19

Philadelphia

–9

9

Salt Lake City

+ 8

4

Boston

+26

20

Chicago

–13

15

Washington

–7

10

Charleston, S.C.

+ 7

5

San Diego

+20

. . . and those that

have lost them.

20

19

15

13

16

14

11

17

12

18

Metro areas that have gained

innovation jobs . . .

. . . and those that

have lost them.

2

4

7

1

20

9

19

15

8

3

13

16

14

6

11

17

12

5

10

18

In thousands

Gained the most

Lost the most

In thousands

16

Wichita, Kan.

–8

11

Oxnard, Calif.

–5

1

San Francisco

+77

6

Raleigh, N.C.

+12

75,000

17

Los Angeles

–8

12

Albuquerque

–5

7

Madison, Wis.

+12

2

Seattle

+56

13

Colorado Springs

–5

18

Dallas

–9

3

Silicon Valley

+52

8

Denver

+10

10,000

14

Durham, N.C.

–6

19

Philadelphia

–9

9

Salt Lake City

+ 8

4

Boston

+26

1,000

20

Chicago

–13

15

Washington

–7

10

Charleston, S.C.

+ 7

5

San Diego

+20

Data are the change in jobs from 2005 to 2017 in 13 industries including scientific research and development services, Aerospace product and parts manufacturing and Software publishers.

Source: Brookings Institution analysis of Emsi data

By Karl Russell

Expanding the knowledge economy across all of America might indeed be a fool’s errand. As Mr. Atkinson noted, Erie, Pa., and Flint, Mich., might never attract the Googles or Apples of the world. But midsize cities like St. Louis, Pittsburgh and Columbus, Ohio, could feasibly transform into hubs of technological entrepreneurship.

The report’s authors propose identifying eight to 10 cities, far from the coasts, that already have a research university and a critical mass of people with advanced degrees. The government would then spend about $700 million a year for research and development in each of them for a decade. Lawmakers could give high-tech businesses that set up shop in these cities tax and regulatory breaks. Mr. Atkinson suggested a limited break from antitrust law to allow businesses to coordinate location decisions.

Battling the forces driving concentration will be tough. Unlike the manufacturing industries of the 20th century, which competed largely on cost, the tech businesses compete on having the next best thing. Cheap labor, which can help attract manufacturers to depressed areas, doesn’t work as an incentive. Instead, innovation industries cluster in cities where there are lots of highly educated workers, sophisticated suppliers and research institutions.

Unlike businesses in, say, retail or health care, innovation businesses experience a sharp rise in the productivity of their workers if they are in places with lots of other such workers, according to research by Enrico Moretti, who is an economist at the University of California, Berkeley, and others.

Other industries and workers are also better off if they have the good fortune of being near leading-edge companies. The report points out that the average output per worker in the 20 cities with the most employment in the 13 high-tech industries is $109,443, one-third more than in the other 363 metros across the country.

The cycle is hard to break: Young educated workers will flock to cities with large knowledge industries because that’s where they will find the best opportunities to earn and learn and have fun. And start-ups will go there to seek them out.

Even skyrocketing housing costs have not stopped the concentration of talent in a few superstar cities. High-tech companies that seek cheaper places to set up beyond their hubs often go to Bangalore, India, rather than Birmingham, Ala.

“They keep the core team in Silicon Valley or Seattle but put the other stuff in Shenzhen or Vancouver or Bangalore,” Mr. Atkinson said. Shenzhen, China, may not be much cheaper than Indianapolis, he added, but Shenzhen is already a tech hub in its own right.

Annual output

per worker

Retail

Health care

Basic manufacturing

Finance

$400

thousand

Innovation industries

Innovation jobs in the most

concentrated metro areas

are the most productive.

300

200

100

0

Next 15%

Next 5%

Top 5%

For metro areas in the bottom 75%

of employment in each sector.

Annual output per worker

Innovation

industries

Basic

manufacturing

Health care

Finance

Retail

$400

thousand

Innovation jobs in the most

concentrated metro areas

are the most productive.

300

200

100

0

Next 15%

Next 5%

Top 5%

For metro areas in the bottom 75% of employment in each sector.

Source: Brookings Institution and Information Technology and Innovation Foundation analysis of Emsi data

By Karl Russell

It is uncertain whether government support could pull innovation out of the clutches of superstar cities. The proposal by Brookings and the Information Technology Foundation will not come cheap: They estimate a $100 billion price tag over 10 years.

The payoff, however, would extend beyond the new technology hubs. Jon Gruber, an economist at the Massachusetts Institute of Technology, noted that in a world where Cincinnati becomes a hub of entrepreneurship, “we don’t need to fix opioid country” in Appalachia. That’s because many of those areas are within commuting distance of Cincinnati.

What’s more, not trying also entails risks. In his book “Jump-Starting America,” Mr. Gruber and his co-writer, M.I.T.’s Simon Johnson, argue for a sustained national effort to seed new technology clusters widely. Without federal government support, Mr. Gruber said, the United States is unlikely to produce many new high-tech hubs.

The risk, he said, is not only that much of America will be left to founder as superstar cities become more congested and less affordable. Political support for publicly funded research will crumble unless more of the country enjoys the benefits from innovation.

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2019-12-09 05:02:00Z
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