Why cities are the key to innovation

Miguel Marshall
CEO, Centro Ventures
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Most advanced economies are moving away from a manufacturing-focused economy into one that looks at innovation as a way to boost growth. Entire countries and development banks are trying to replicate the economic model based on the innovation that made Silicon Valley what it is today. Locally focused programmes like Startup Chile, Startup Mexico and Startup Malaysia are trying to transform their countries – and hence the outside perception of their regions – through innovation. Each one is trying to show they are the best at fostering innovation.

The strategy most cities use is attempting to attract innovators to their cities. Their plan is to use them and their entrepreneurial endeavours to benefit the local economy. The non-profit Endeavor has executed this strategy better than anybody, by helping create a mentor mentality and the famous “network effect”.

But do these strategies actually work? What really helped places like Silicon Valley, Boulder or Austin excel over the past 20 to 30 years? Some credit it with better universities or with help from the investor community. I believe the urban lifestyle that the majority of young people aspire to is the key to determining which places will become innovation hubs. Let’s not forget that innovation comes from entrepreneurs, and like other people, what they want is to eat good local food, drink locally brewed beer, bike to work, and generally have a good quality of life. These elements are the basic needs for most entrepreneurs, and once these are covered, we can talk about innovation and creating the ecosystems that foster it.

Urban development as an element for growth

I have travelled to many places that use things like incentives, entrepreneurial programmes, university programmes, media and laws to boost innovation. But these don’t necessarily create a haven for intellectual progress. My hunch is that most emerging cities that have tried and failed to foster innovation lack the right urban infrastructure. People that are in their late 20s look for an urban lifestyle that enables them to live close to where they work, where there is a nightlife, good food, bike paths, co-working spaces, mixed use buildings, art galleries and other public spaces that meet their desire for creative outlets.

Evidence shows that cities like Austin, the most innovative city in the US, have been built by young people willing to live there because of the quality of life, good food, vibrant art scene and interesting people. These elements turn emerging communities into places with a great quality of life, which in turn inspires innovation.

The solution is in our own cities, not outside them

Over the past year and half, I have travelled all over the world trying to promote my hometown city of Tijuana as the next start-up destination, given its incredible proximity to the US and specifically to California – a strategy I believed could make this city appealing to Silicon Valley companies looking to outsource, reduce costs or send their pre-H1 visa candidates to work.

But looking back I realize that the value-added proposition of proximity itself is irrelevant. We have to fix our house before we can promote it, and the best way of fixing it is by revitalizing our private and public urban infrastructure.

My call to action is to invite the city leaders and urban planners to first fix their own house before promoting themselves to the rest of the world. They could start by building their local infrastructure by constructing mixed-use buildings, amending local laws, investing in walkways and urban gardens, creating public spaces, and promoting art and local commerce.

Create city disruption

We’re constantly hearing stories about the new initiatives being taken by cities: from taking over public spaces, building urban farms, creating art districts, promoting bike-to-work policies or simply encouraging  and helping people to buy local. These are some of the examples that each one of us can use to further increase the value of our cities in the eyes of the world.

On my end, we are trying to redevelop downtown Tijuana and create a better urban lifestyle across the city through an urban development firm we just launched called Centro Ventures, where we are developing a mixed-use building that integrates living, office, commercial, urban farming, art and public spaces. We are also investing in public infrastructure through parklets, bike parking and bike paths. The only thing in our way is the antiquated approach governments and property owners sometimes have to investments of time. In other words, they prefer ideas that don’t require much time investment, instead of investing more time in projects that will reap greater benefits over a longer period.

Today we must think outside of the box and steer clear of the shallow approaches some cities are taking when developing innovation programmes. We must first build a better urban culture and infrastructure to increase our city’s value to the rest of the world and invite the real innovators to populate our cities and create a real grassroots movement of innovation and talent.

Author: Miguel Marshall, entrepreneur in residence, Angel Ventures, Mexico. Global Shaper

Image: Cyclists pass beneath the downtown skyline on the hike and bike trail on Lady Bird Lake in Austin, Texas September 18, 2012. REUTERS/Julia Robinson

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