Why do innovative businesses tend to “cluster” together in tech hubs like Silicon Valley? Why do these companies stay in these expensive cities when they could go to another city with significantly cheaper costs? Can these tech hubs be better governed? And how might other cities catch up? To explore these questions, I am delighted to speak with Enrico Moretti.

Enrico Moretti is the Michael Peevey and Donald Vial Professor of Economics at Berkeley. He is also an associate with NBER and a Fellow for the Centre of Economic Policy Research and the Institute for the Study of Labor. And he is the editor-in-chief of the Journal of Economic Perspectives. His 2012 book, The New Geography of Jobs, brought to light much of the data showing that high-tech industries tend to cluster together in small areas, and he has repeatedly returned to this subject in his academic work since then, including in his new paper, “The Effect of High-Tech Clusters on the Productivity of Top Inventors.”