Jane Jacobs in The Death and Life of Great American Cities: “The larger a city, the greater the variety of its manufacturing, and also the greater both the number and the proportion of its small manufacturers.”
The benefits that cities offer to smallness are just as marked in retail trade, cultural facilities and entertainment. This is because city populations are large enough to support wide ranges of variety and choices in these things. And again we find that bigness has all the advantage in smaller settlements. Towns and suburbs for instance are natural homes for huge supermarkets, and for little else in the way of groceries, for standard movie houses or drive ins for little else in the way of theatre.
There are simply not enough people to support further variety, although there may be people(too few of them) who would draw upon it were it there. Cities, however, are the natural homes of supermarkets, and standard movie houses, plus delicatessens, Viennese bakeries, foreign groceries, art movies, and so on, all of which can be found co-existing, the standard with the strange, the large with the small. Wherever lively and popular parts of the cities are found, the small much outnumber the large.
“Cities, then,” writes Steven Johnson in Where Good Ideas Come From: The Natural History of Innovation, “Cities, then, are environments that are ripe for exaptation, because they cultivate specialized skills and interests, and they create a liquid network where information can leak out of those subcultures, and influence their neighbors in surprising ways. This is one explanation for superlinear scaling in urban creativity. The cultural diversity those subcultures create is valuable not just because it makes urban life less boring. The value also lies in the unlikely migrations that happen between the different clusters.”
And Samuel Arbesman, in The Half-life of Facts, adds: “Larger groups of interacting people can maintain skills and innovations, and in turn develop new ones. A small group doesn't have the benefit of specialization and idea exchange necessary for any of this to happen.”
Still curious? If you want a deeper understanding, read Growth in Cities.