On jobs, tech hubs, and David Byrne of the Talking Heads

Congratuations to UChicago economist Richard Thaler on winning the Nobel Memorial Prize in Economic Sciences. Much deserved.

Now if I were to award a much smaller, far less ambitious prize for, say, Economics Blog Post of the Day, I think my selection would be former Talking Heads frontman David Bryne. At his blog, he writes a great little piece about Lititz, Penn., a town in the heart of Amish country, which is a hub for companies that develop and make the sets and technology for rock concerts. (Thanks to the Modeled Behavior for the heads-up tweet.)

As a 2014 Forbes piece explains: “More than a dozen companies had organically come together in this town in the heart of Amish country to create an industry cluster in the vein of Silicon Valley’s tech sector, New York’s garment district or Hollywood’s film scene. These include sound company Clair Global, lighting and design company Atomic, Control Freak, which does video integration, Mojo, a barricade company, and StageCo, which creates large steel structures like the “claw” in U2’s 360 tour.”

So was this music-tech industry cluster the result of savvy planning by the local government or state officials? As Byrne tells, it was a total fluke: a local company that mostly did sound systems for local fairs and small music shows ended up supplying a sound system for Frankie Valli and the Four Seasons in the early 1960s. Byrne:

Meanwhile, at the Fontainebleau Hotel in Miami, Frankie Valli and the Four Seasons were opening for Herb Alpert and the Tijuana Brass, who had hit records in the early 60s. Alpert had his own PA, which he used at the show, but he wouldn’t let the opening act use it. “You use that,” he said, pointing to some worn out little 12″ speakers.

(I had a similar experience at a show in which Talking Heads opened for the Police and we were denied use of the video system, I was furious!)

Anyway, Valli was incensed, and when he got back to Jersey he was determined that he would never have that experience again; he’d have HIS own PA. Someone told him about these brothers based out of nearby Lititz who did sound, so he met with them. Afterward he told his band mates, “They look Italian, I think we could work with them.” Roy laughed “WE look Italian?” (True!) The Brothers Clair went from the Four Seasons to Elvis and on and on… but it was a gift from daddy and Frankie Valli’s shame and anger that gave them the start they needed.

And Byrne’s take-away conclusion:

What I get from this story is that, for the most part, my assumed explanations as to why this music and tech complex sprouted and grew here, were wrong. Probably like most people I assumed there were practical and rational economic factors that explained why this and why here. A confluence of nearby interstate highways maybe, allowing easy access to markets and resources. Or maybe it was not even highways, but proximity to a sizable number of markets-—Philadelphia, Baltimore, DC, NJ, Cleveland, Pittsburgh and more. Maybe there was a university or some institution nearby that was turning out trained audio engineers—Lehigh University maybe?

Those factors (except the last one) did help the business flourish once it was established, but they don’t explain why it started here. That, it seems, is explained by Mr. Valli’s ego, ambition and emotion—his shame and anger. It was his emotions which led him to seek out the Clair brothers. A rational economic decision it may not have been, but it led to the birth of what is now this little known and unexpected place, where the giant music tours we all know get put together

Like I said, a random thing, much like, say, Seattle becoming a tech hub. As I recently wrote:

The city became a tech magnet, including for Amazon founder Jeff Bezos, thanks to Microsoft. And the only reason Microsoft moved to Bellevue, Washington, back in 1979 from Albuquerque was that founders Bill Gates and Paul Allen were restless and wanted to relocate back home. Again, Moretti: “[Innovtion hubs] often get developed because of idiosyncratic factors like a local firm succeeds and it starts attracting more firms like that. And this creates a cluster that then becomes stronger and stronger, and that feeds on itself.”

James Pethokoukis is a columnist and blogger at the American Enterprise Institute. Previously, he was the Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.