Rohan Silva, City Growth Commissioner, (@Rohan__Silva)
It’s a fascinating 21st century paradox that technology is obliterating distance, enabling us to easily communicate and collaborate with people on the other side of the planet, and yet physical proximity and clustering in cities is more crucial for innovation than ever before.
As the Harvard economist Edward Glaeser has written, cities “are our greatest invention” – places where entrepreneurs, academics and inventors can collide with diverse viewpoints and industries. This type of serendipitous collision is vital for modern innovation, which so often arises from inter-disciplinary thinking, and the cross-fertilisation of ideas and approaches.
Given all this, it’s not a surprise that research shows that UK cities are our principal engines for growth, generating over 60% of our national economic activity. We’re not alone in this regard - data from the US highlights the fact that patents are disproportionately created in a small number of dense urban areas.
I’ve seen at first-hand how quickly clusters can grow in the 21st century information economy. When I created the Government’s Tech City initiative in 2010 to support the emerging cluster in East London, there were around 200 technology and digital companies in the area. Today there are well over 3,000, supporting approximately 50,000 jobs and apprenticeships.
Away from London though, there are limits to what Whitehall can do centrally to spark innovation and support local clusters. Why? Because innovation clusters cannot be dropped from 40,000 feet - they need to be nurtured from below. What’s more, clusters are - to quote the great Jane Jacobs - systems of “organised complexity”, and interventions need to be designed with the specific challenges and opportunities of a local area in mind.
As the RSA’s excellent City Growth Commission report concludes, the only long-term response is to radically decentralise decision-making to our cities, giving urban leaders the freedom to develop ambitious policies that support innovation and creativity at the local level.
So what should a newly empowered Mayor of a major British city do if he or she was trying to nurture innovation and grow a creative cluster? Well, the beauty of decentralisation is that it’d be up to them to decide, but there are certainly three areas worth focusing on, in my view.
First, unlocking the growth potential of local universities. Our major cities are all blessed with world-class research institutions, but much more needs to be done to encourage academic spinouts and entrepreneurialism on British campuses. For example, in future Mayors could make use of their new financial freedoms to build startup incubator spaces close to university campuses, and take steps to support the local angel investment networks that provide the essential risk capital and mentoring for fledgling companies. Given the abject sclerosis of the national Technology Strategy Board, Mayors might also look to create their own “intermediary institutions” that support the next generation of technologies emerging from our universities.
Second, improving connectivity. The 21st century economy is increasingly dependent on sharing information, and our cities need to quickly emulate Singapore’s 1Gb/s broadband speeds to drive inward investment and innovation. This will require Mayoral leadership to punch through the planning red tape that impedes broadband rollout, as well as a collective willingness to introduce real competition in the wholesale broadband market. Of course it’s not just about connectivity within our cities: transport links between our clusters are essential too. To take just one example, fast direct trains between Liverpool Street and Cambridge have the potential to spark new business partnerships and collaborations between the UK’s two leading technology clusters.
Finally, we need to attract bright, entrepreneurial people to live, work and start businesses in our cities. 70% of Silicon Valley’s engineers were born outside of the United States, and as the Growth Commission report rightly says, immigration policy can be used intelligently to encourage talented graduates to study and reside in our key urban areas. What’s more, as the American academic Richard Florida has shown, cities benefit economically when Mayors take steps to improve quality of life and support art, culture, live music, food markets and nightlife. You only have to look at fast-growing US cities like Portland and Austin to see the economic impact of successfully attracting the global “creative class”. Melbourne’s intelligent reform of licensing rules for small bars is also well worth a look - it’s widely credited with revitalising the city centre and making it attractive for creative people and companies.
The City Growth Commission points the way forward to a more prosperous and dynamic country, powered by innovative and attractive metropolitan areas. In the wake of the Scottish referendum, some might call it “Devo Met”. I’d call it common sense.
This article was originally posted by the City Growth Commission