The New Lunatick’s Newcastle as a Smart and Innovative City forum raised an interesting question; “how do you build an innovative city?”
In putting together the Digital Sydney project, this was something we closely looked at – how does a city become a global hub of innovation in the creative, digital, financial industries?
What leaps out when studying successful industry hubs is that all have developed without government intervention; most have been an accident of history where resources have come together and have driven by a small group of like minded entrepreneurs.
Those entrepreneurs have been attracted to various regions by the area’s proximity to the natural resources, transport links and available land suited to their industry. While those requirements vary between industries, access to a skilled workforce is the common factor between all of them.
In many respects this is how the current mining boom has worked for Newcastle. Unlike the rest of Australia’s mineral fields, the Hunter Valley has a major city with a skilled workforce that understands mining and engineering.
The challenge for Newcastle – and indeed for Australia as a nation – is diversifying the economy from depending upon resource exports and domestic consumption into creating wealth from the newer, knowledge based industries.
For hubs to develop in these industries, regions need the factors identified by Richard Florida in his Rise of the Creative Classes where he found these cities offered the “three T’s” – Talent, tolerance and technology.
Australian cities like Newcastle score well on these measures but to create hubs you need a motivated group of entrepreneurs and while these exist there may not be the numbers to create a critical mass.
The main reason for this is the domestic investment structure; most Australians invest in housing and aren’t particularly inclined to invest in comparatively risky businesses, particularly those in industries they don’t understand.
Governments can help by opening their data and making procurement friendly to new and smaller businesses – on both scores Australian governments at both levels do poorly with data often being unnecessarily guarded and tendering processes tend to be skewed towards large, usually multinational, corporations.
Assistance programs can also help on the fringes however it’s important not to repeat the mistakes of the film industry where several decades of government grants and funding has resulted in a generation of film makers more skilled at navigating bureaucracies and filling in application forms than telling stories.
Where government assistance can do a good job is in bringing together the various industry groups which was the intention of Digital Sydney. Well targeted, low paperwork schemes like the Australian Technology Showcase and various trade programs can also help growing businesses.
Overall though, the development of innovative cities lies in the hands of the residents, it’s up to the inhabitants of the city, town or region to bring build the hub.
This is exactly what happened with the original Lunaticks society in 18th Century England that created the region that became known as Birmingham which was the heartland of the English economic powerhouse for over a hundred years.
While we can wait for governments or investors, building industries is about innovators, entrepreneurs and workers. It’s time to get to work.
Bit surprised you’d cite Florida’s research. It’s been pretty comprehensively discredited, both on technical econometric grounds and also from the perspective of the logic of his arguments.
Hi Ben,
I’m not really qualified to discuss the broader aspects of Richard Florida’s work, but I think the aspects he flags in what attracts workers in knowledge based industries has a lot of merit which is why I included it in the post.
Thanks for the comment.
Cheers,
Paul
Brum contributed in the 20th C also. The Cavity Magnetron, heart of mobile radar & WWII key, was developed at Birmingham University. Not all unis though are as lucky to have a talent tradition. The Research Assessment Exercise of UK HE institutes was as much a conundrum in how to play the numbers; meanwhile separate Enterprise in house expertise sprang up to collaborate with other government enterprise agencies – YTS2.0. Key to the Lunaticks success as in Silicon Valley was critical mass – some might say that digital and Google have changed that though.