I begin the risky project of crystal ball gazing by noting two trends expected to continue into the foreseeable future. The first is rising incomes, accompanied by increased demand for luxury goods and, especially important for commuting, a higher opportunity cost of time. The second trend, improving technology for transporting objects and ideas, may eliminate some of the productive functions of cities, but may make cities more valuable in other ways. As a result, manufacturing has already left the cities, and large-scale wholesale trade is about to follow. But the urban advantage in moving people is still enormously important, both in the service sector, which requires interpersonal contact, and in the labor market, which allows people to switch jobs without switching homes.
Cities also remain key in moving ideas.
As important as the production side is, the future of most cities depends on their being desirable places for consumers to live. As consumers become richer and firms become mobile, location choices are based as much on their advantages for workers as on their advantages for firms. Some cities, such as San Francisco, seem to appeal strongly to consumers. Other cities do not. The ones that are attractive have thrived in both property values and population.