For 170 years, U.S. Cities have followed a hidden law of growth and decline

Researchers Simone Daniotti, Matte Hartog, and Frank Neffke reached this conclusion after analyzing a massive dataset of 650 million U.S. census records, 6 million patents, and a range of historical sources documenting nearly two centuries of urban development.

"We observed that, on average, the cities that make up the U.S urban system transform gradually but surely over time-from craftsmanship and manufacturing to services and engineering. Despite this, they maintain a constant level of coherence for nearly two centuries," explains CSH fellow Daniotti, first author of the study.

West Coast: Rapid Growth, Enduring Coherence

"This also happened and in the same way on the West Coast, which developed later and initially in isolation from the wider U.S.. In 1850, cities such as Los Angeles and San Francisco are just emerging there with the onset of the Gold Rush," adds Daniotti, who is also a researcher at Utrecht University.

The analysis shows that the region underwent a fast and far-reaching shift. "The transformation was massive-faster and more pronounced than on the East Coast," says Daniotti. In 1850, less than half of all the export-oriented occupations that existed in the wider US were also practiced on the West Coast -- but within just fifty years, that share had surged to nearly 90%. "But, despite rapid diversification, West Coast cities' average coherence remained remarkable constant and at levels that were comparable to those of eastern US cities."

Why Change Has Limits

"The findings show that, although cities develop new activities and abandon old ones, they do so in a way that keeps their coherence constant. This suggests that such transformations are constrained: although cities can develop new activities and drop old ones, while doing so, the set of industries they maintain seems to need to stay coherent at any given point in time," explains Neffke, who leads CSH's Transforming Economies research group.

"So even in cases like Pittsburgh or Boston, which went through periods of prolonged decline and only emerged from those after abandoning their heavy manufacturing industries in steel and manufacturing for high-tech production and services, they needed to find a path that would allow them to do so without jeopardizing their coherence," adds Neffke.

Size Matters: Larger Cities, Lower Coherence

The research also found that as cities become larger, their coherence steadily declines at a predictable rate -- about 4% for every doubling of population. Despite enormous technological progress, from railroads and telegraphs to computers and AI, and a population increase from 23 million in 1850 to 332 million in 2022, this pattern has remained consistent.

"This suggests that the way economic activity is distributed within an urban system follows some universal regularities that constrain the amount of diversity that cities can maintain -- keeping them coherent -- based on the size of their population," says Neffke.

Policy Takeaways: Balancing Expansion and Focus

The researchers believe these results carry important lessons for policymakers. While pursuing innovation and emerging technologies is valuable, cities must avoid overextending themselves. "The reason is that the capability base that supports their existing economic structure and is embedded in local infrastructure, workforce, and institutions is expensive to maintain and therefore is ideally kept compact," explains Neffke.

"However, larger cities can sustain a broader set of capabilities, which gives them more room for diversification. But the amount of diversity a city can realistically support is tied to its size. This highlights the importance of benchmarking cities against peers of similar sizes and to recognize that ambitions for diversification are ultimately constrained by size."

Understanding Coherence

In this study, coherence describes the underlying connections that hold a city's economy together. It measures how similar or related two randomly selected workers (or firms, or patents) in the same city are in terms of their occupations, industries, or technologies.

Daniotti explains that coherence reflects three main components: how many types of activities a city supports, how evenly those activities are distributed among workers, and how different they are from one another.

Highly coherent cities typically have a smaller number of closely related industries, such as Detroit during its automotive heyday. Less coherent cities, like New York City, host a much broader mix of unrelated economic sectors.