According to Jacobs, four conditions generate city diversity. The first is primary mixed uses. Districts must serve more than one main function (and ideally more than two) in order to ensure pedestrian traffic at different times of day, for different purposes, but using many of the same facilities. Street length is the second generator of diversity. Short blocks are desirable because they allow different patterns of use. Varied building age is third generator of diversity. Combining buildings of different ages improves economic yield. High density is the fourth and final generator of diversity because it generates effective economic pools of use.

Big cities are not just diverse, they are also prolific incubators of innovative ideas and enterprises, as well as the economic homes of numerous small businesses. The variety, number, and proportion of small manufacturers in a city relates directly to the city’s size. The bigger the city, the more manufacturing enterprises grow. Small urban manufacturers differ from large non-urban ones in important ways. First, they draw on varied skills and supplies outside themselves. Second, they serve a relatively narrow market. Third, they must be responsive to changes in the market. Small manufacturers are dependent on diverse city enterprises, contribute to the city’s diversity, and can only exist in cities.