When it was announced that Chicago would be getting $70 million from the federal government for a Defense Department-led digital manufacuring hub, the first thing I thought of was Swedish music producers—you know, like Max Martin, the guy who brought you Britney Spears's greatest hits. Trust me, it makes sense.

Not long ago I finished a freelance piece, forthcoming in Pacific Standard, for which I was tasked to figure out why Sweden cranks out so many successful music producers, who in turn have soundtracked much of American life in the past couple decades, really beginning with Ace of Base. To make a long story short, Sweden pours a lot of resources into music education and technology, and the musicians who have benefitted from that have in turn reinvested back into the industry. Stockholm, the country's biggest and most cosmopolitan city, has become a hub of music production—which, oddly enough, has concentrated the national industry even further as music has become more digital and portable.

Researching the piece led me to the work of AnnaLee Saxenian, dean of Berkeley's School of Information, which has been rattling around in my head; the news of the manufacturing hub dislodged it this week. Saxenian made her name with her research in the mid-1990s, as the Internet bubble was raising Silicon Valley, on what made the Valley so successful as a high-tech hub—and, by contrast, why it surpassed the east coast's dominant Route 128 tech corridor in the 1970s. Here's one critical part:

• "Silicon Valley has a regional, network-based industrial system that promotes learning and mutual adjustment among specialist producers of a complex of related technologies."
• "In contrast, the Route 128 region is dominated by autarkic corporations that internalize a wide range of productive activities."

Translation: people in Silicon Valley talked to each other, at bars and coffee shops, networking events, on blogs (eventually), and when they went back and forth between companies as employees launched startups and companies acquired startups. The Route 128 companies turned inward. It's a paradox that people have found in places like Silicon Valley and Stockholm. As technology becomes more virtual and distributed—the "flat world," in Thomas Friedman's undead phrase—physical geography becomes more important, as industries cluster to take advantage of these social ties.

That Chicago is getting a big digital manufacuring thing is important, but the nature of it—the hub —is what differentiates it from investing in a particular company or institution. Saxenian described the atmosphere in Silicon Valley as like an engineering lab, where internecine competition is leavened by a desire to share information, in part just for the thrill of it. She also described it as something like a family—companies raise and educate young engineers, who then leave the nest and make their own little startup babies, often doing things their own way, but maintaining social and intellectual ties. (Plus, if you're trying to score the best talent from your competitors, it helps if they don't have to move.)

But it's not just an adaptation of the Silicon Valley model of information-sharing, which is hardly so formalized. It's a direct imitation of Germany's Fraunhofer Society—a network of public-private industrial research hubs that, like Chicago's, brings together and is intended to support the development of private industry, academic research, and government projects. But the big reason we're copying the Germans:

According to the Manufacturers Alliance for Productivity and Innovation, manufacturing accounts for nearly 21% of the German economy, compared with 13% for the United States and 12% for the United Kingdom. It generates many good jobs, even in such labor-intensive sectors as road vehicles, machinery, and electrical equipment. And Germany’s manufacturing performance is getting steadily better. German exports, primarily manufactured goods, rose 11% in 2010, to more than $1.3 trillion. While other industrialized nations have buckled under Asian competition, Germany has increased exports to China and the rest of Asia.

The Germans also have a long history with strong vocational STEM education; while vocational education is at a low ebb in the United States, the pendulum is swinging back, as I discussed with economists apprenticeship proponents James Heckman, Tim Kautz, and John Eric Humphries. It's also, interestingly enough, making its way into public libraries, as the city experiments with the future of that institution.

Slowly, the U.S. is piecing together what other countries have been doing for awhile.