Sunday, April 18, 2010

Cities & Innovation

image:: new model of innovation with decentralized collaboration and 
distributed manufacturing, from Wired

Thomas Friedman in the NYTimes cited Chris Anderson's Wired article, Atoms are the New Bits, where Friedman talks about how technology and globalization are allowing innovation to flourish by bringing together talent and capital, and allowing them to collaborate virtually. He cites a lean startup making the best out of the current state of technology to allow for virtual collaboration. What also resonated was what he said about the state of politics::
"Our national debate today is dominated by the ignorant ramblings of Sarah Palin, talk-show lunatics, tea parties and politics as sports — not ESPN but PSPN. Fortunately, though, we still have risk-takers who are not paying attention to any of this nonsense, who know what world they’re living in — and are just doing it. Thank goodness!"
I roll my eyes with much of the political rhetoric on innovation and the recession when it comes to taxation. "Roll back taxes and this will spur innovation." I beg to differ. Mashable had an article on why place still matters, citing::
  1. Entrepreneurial support communities
  2. Talent pools and types of talent
  3. In-person meetings
  4. Partnership
  5. Happiness
What Chris Anderson is saying is also compelling::
"Although it’s shrinking, America’s manufacturing economy is still the world’s largest. But China’s growing production sector is predicted to take the number one spot in 2015, according to IHS Global Insight, an economic-forecasting firm. Not all US manufacturing is shrinking, however — just the large part. A Pease Group survey of small manufacturers (less than $25 million in annual sales) shows that most expect to grow this year, many by double digits. Indeed, analysts expect almost all new manufacturing jobs in the US will come from small companies."
What I see is an opportunity for innovation to be clustered around cities that have a critical mass of activity. While some may balk at Ontario's tax rates {I'll be analyzing the realities of this in a future blog}, there is a vibrant innovation community here in a cosmopolitan city, although the province isn't budgeting much innovation support in the next year. Also, while Toronto has a lot going for it, the Toronto Community Foundation's Vital Signs report shows there's room for improvement when it comes to the gap between rich and poor, as well as the implications of the debt. The question is how to create opportunities for lower-income and younger Torontonians, without resorting to supply-side tax-incentive tactics that further erode the tax base? I see opportunities for relatively high-wage manufacturing jobs through policies that foster the proliferation of smaller manufacturing firms that focus on newer technologies serving local firms in the Greater Toronto Area, in places like Oshawa and Oakville.

Twitterversion:: Cities & innovation. How much does place matter in the globalized economy? @Prof_K

Song:: Jets from Brazil-'Starry Configurations'

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