ED GLAESER: The tallest building in the world is surrounded by desert and sea.
The Burj Khalifa source in a city that had fewer than 50,000 people in 1960.
Less than half the population of Sommerville, Massachusetts then.
In 50 years, Dubai's population has grown nearly 50 fold.
And now that city has practically become synonymous with glittering oil wealth and
high tech urbanism.
Through the 18th century Dubai was essentially a remote fishing village
anchored by a creek that still divides the city into two halves, Deira and Bur Dubai.
In the 19th century Dubai broke away from the Sheikhdom of Abu Dhabi, but
both became Trucial States.
Emirates that were allied with Great Britain and
ultimately part of a British protectorate they would last until 1971.
The Port of Dubai achieved modest success during the British era as a trading
entrepot.
And occasional stop over for steam ships traveling to and from India.
Dubai Sheikhs were always commerce friendly and
they did their best to attract Indian and Iranian merchants.
Dubai's most lustrous products were pearls, hunted along the coast for
centuries.
And their prices suffered with the introduction of cultured pearls in
the middle of the 20th century.
The seeds for Dubai's post-pearl success were largely laid by Sheikh Rashid II,
the Emir from 1958 to 1990 during whose reign the city's population grew
from 40,000 to over 400,000.
The Sheik envisioned Dubai as being the urban connector between his region
and the world.
And he tried to achieve that end by investing heavily in infrastructure.
He dredged Dubai's creek and then built a bridge across it.
He built Dubai's first airport and
despite British skepticism enlarged it to allow jet airplanes in 1965.
He opened Port Rashid, named for himself, of course, in 1972.
And then Jebel Ali port seven years later.
Jebel Ali is supposedly the largest man made harbor in the world.
The Jebel Ali port was joined by the Jebel Ali Free Zone six years later.
Free zones provide lightly taxed and
lightly regulated regions to attract international firms and industries.
In a sense, they provide business friendly legal infrastructure
to match the region's business friendly physical infrastructure.
Betting big on physical infrastructure can easily go awry, and
Sheikh Rashid's early investments surely seemed like big gambles.
Today's investments also have real downside risk, but
the Sheikh's gambles paid off well.
As he put it, my grandfather rode a camel.
My father rode a camel.
I drive a Mercedes.
And, his success owed a lot to oil.
The oil wealth in neighboring Abu Dhabi had been discovered in the 1950s,
just before Sheikh Rashid began his reign.
Dubai yet didn't have it's own oil but the Sheikh grasped how Dubai could get
rich later, shipping the oil of others, serving as the region's conduit to the outside world.
Dubai's own oil was discovered in 1965 but
much of that wealth was ploughed back in to building the city.
Sheikh Rashid was convinced that without investing in the city
his grandson would end up riding a camel like his fore bears.
While some of the chieftans prefer to remain more conservative and
closed, Dubai has been relatively open to the outside world and
keenly aware of its need to attract outside talent.
More than 80% of the city's inhabitants are immigrants.
Above all, from India, and they are there, not just because of the oil,
the failings of India's legal and physical infrastructure.
And the easy air travel to well-managed Dubai
makes Dubai an attractive place to do business.
You can certainly meet professionals in Mumbai, who spend their weeks working in
the Emirates and come home to their families on the weekend.
Dubai's recent building burst has captured the imagination of the world.
The worlds tallest skyscraper, the Burj Khalifa, the world's third tallest hotel,
the Burj Al Arab,
which sits on a man-made island, the first of three that are meant to be built.
And the world's second largest shopping mall.
In a sense, Dubai's great building boom can be seen as an attempt
to keep winning in the global contest to attract human capital.
Dubai first made itself a good place to work.
Now its shopping malls and skyscrapers and
its dolphin area can be seen as an attempt to create a consumer city as well.
A place that is fun as well as productive.
When talent is global,
investing in quality of life is an economic development strategy.
One mantra is that cities should attract and train smart people and
then get out of their way.
But has Dubai invested too much?
Certainly there were rough years in the Great Recession.
Dubai had to turn to its oil rich friends in Abu Dhabi for support.
The Emirate is again running a deficit in 2017.
Aggressive infrastructure investment always runs the risk
of building too much too soon.
Things seem to have stabilized.
But I'd caution against any city taking the lesson in Dubai to be that cities
must have the snazziest, most over the top, most extreme physical infrastructure.
The right lesson, the deeper lesson is that Dubai has long recognized that it
must attract outside talent to succeed and that is true for all cities.
Human capital educated at home, and
imported from abroad is the real recipe for long run urban success.
An infrastructure only makes sense when it empowers and
brings value to the humanity that is the real city.