The Great Divergence

SEATTLE IS NOT the same city that it was thirty years ago. Dilapidated warehouses have been rehabilitated to host scores of small startups, and smart-looking new office buildings have been erected for larger companies. The once crumbling pier and rusting docks now house Internet and software companies. The old rail yard has been renovated and is now home to the labs of the pharmaceutical company Amgen. A formerly seedy residential and commercial district on the northern edge of downtown has become the cool city’s new zip code, with well-designed offices and condominiums appearing every year.

If you sit for a couple of hours outside the Victrola Coffee and Art café on 15th Avenue in the Capitol Hill district, you will get a good sense of Seattle’s unpretentious energy and discreet optimism. With a diverse mix of thirty-something professionals, gay couples, struggling college students, and wealthier, more established families, the area is one of the city’s many thriving neighborhoods. People stroll along lively streets dotted with eclectic bookstores and bodegas specializing in artisanal goods. Throughout the city, gourmet restaurants and new cultural venues have taken over abandoned structures and surface parking lots. Even Pioneer Square, until recently known more for its methadone clinics than for trendy startups, is experiencing a renaissance as high-tech companies such as Zynga, Discovery Bay, and Blue Nile move into its beautiful historic brick buildings. It is becoming so fashionable that it is even attracting financial institutions: Maveron, the venture capital firm of Starbucks chairman Howard Schultz, has just taken over a renovated space on First Avenue.

Seattle is a place that mixes a strong sense of community with a contagious entrepreneurial energy and an understated cosmopolitan vibe. Above all, it exudes a quiet confidence about the future, a confidence rooted in one simple fact: Seattle has completely transformed itself from a decaying old-economy provincial town into one of the world’s preeminent innovation hubs. In the process, its residents have become some of the most creative and best-paid workers in the United States.

This has not always been the case. It is hard to imagine today, but a visitor walking Seattle’s streets three decades ago would have had a completely different impression of the city. In the late 1970s, Seattle was looking inward and backward, consumed by fear about the future, riddled with crime, and decimated by job losses. But on a rainy morning in early January 1979, something happened that changed the history of the city.