Book Review: Headquarters Economy: Managers, Mobility, and Migration

Urban economists and regional scientists occasionally focus on the long-term transformation of some dominant metropolitan area or on the long-term changes experienced by a small number of metropolitan rivals. Decades ago the study of New York by Hoover and Vernon (1959) and the comparative study of New York and Pittsburgh by Chinitz (1961) established high standards for such studies; in more recent times, McDonald (2016) has traced the evolution of greater Chicago, while Storper, Kemeny, Makaren, and Osman (2015) have examined the different growth paths taken by the Los Angeles and Bay area economies. These studies— whether idiographic or comparative—typically look at each city’s changing economic base and the composition of its workforce; summarize important land-use shifts, including suburbanization; remark on the quality of infrastructure; evaluate the factors of scale and externalities in promoting economic growth; and assess the role of governance in guiding or maintaining growth. Sometimes future projections and useful policy advice are also provided for these metropolitan areas. Headquarters Economy, by J. Myles Shaver, certainly follows in this tradition. But here the scope of concern is restricted because he focuses entirely on the historic change seen in the corporate landscape of Minneapolis–St. Paul over the past six decades. In many ways, the narrative reflects Shaver’s ever-widening inquiries about corporate location as his career unfolded at the Carlson School of Management at the University of Minnesota, and he became disenchanted with “folk theories” that headquarters (HQs) colocated only in those regions having benign climates or superior work ethics. By identifying the underlying reasons for the continued concentration of HQs in the Twin Cities region—which, according to him, claimed 19 Fortune 500 HQs in 2011, making the region number six in the nation—Shaver sets out to expose those factors that determine corporate competitiveness in all metropolitan regions. Chapter 2 looks at the HQ turnover that was experienced between 1955 and 2011. In 1955, the Twin Cities had only nine companies (topped by General Mills and Pillsbury Mills) listed in the Fortune 500; however, two other very visible companies (Hormel and Marshall-Wells) were headquartered elsewhere in Minnesota. By 2011, the Twin Cities rivalled Greater San Francisco (with 19), Dallas (20), Los Angeles (21), and Houston (22) in HQs numbers and its HQ density, calculated to be 5.79 HQs per million inhabitants, was only exceeded by Bridgeport, CT, and San Jose. Over that time span 30 companies in the region lost their Fortune 500 rating, either through relative decline or migration (including mergers), but these were replaced by 40 other companies that entered the region’s Fortune 500 list. Part of this turnover was due to the change in industry definition introduced by the Fortune analysts in 1995, which favorably reflected the great diversity of industries that were (and still are) headquartered in Minneapolis–St. Paul. In fact, Shaver argues that the ability to sustain a dominant HQs economy only becomes apparent when a metropolitan region can replace the inevitable loss of some HQs with the addition of entirely new HQs. However, compared with other important cities like Atlanta and Phoenix, the Twin Cities area almost completely relied on homegrown industries—like United Health (insurance), Target (retailing), U.S. Bancorp (banking), and Land O’Lakes (food)—to enhance its Fortune 500 profile during the closing decades of the 20th century. According to the alternative Forbes listing, Minneapolis–St. Paul also houses many HQs of the nation’s most important private companies, including Cargill (food) and Carlson (hospitality), and recently its HQ density was only exceeded by five other metropolitan regions. Moreover, various operational, divisional, or regional HQs of public companies can be found there, where Wells Fargo (banking) recently employed 20,000 people and Thompson Reuters (publishing) employed 7,700 other people that were “hidden” from the Fortune 500 list. Thus, by any measure, Minneapolis–St. Paul continues to be a very important U.S. HQs center. In chapter 3, Shaver clarifies the subtitle of the volume. Here, he makes the claim that management talent, intraregional mobility, and interregional migration are the key elements of any HQs economy. First and foremost, he sees that 896029 EDQXXX10.1177/0891242419896029Economic Development QuarterlyBook Reviews book-reviews2019