Category: government

How important is public transport to smart cities?

Public transit systems may be essential to a city’s success in the 21st Century.

One of things that stands out when discussing economic development with city governments is the importance of public transit for towns aspiring to be smart cities.

This was particularly notable in interviewing Gordon Innes, CEO of London and Partners, about British capital’s building upon the legacy of the 2012 Olympics and its quest become the digital capital of Europe.

At the centre of these developments is public transit, something mentioned by both Innes and Laurel Barsotti of the City of San Francisco.

Innes sees public transport as essential to London’s growth, “it’s absolutely critical to the physical growth of the economy.”

“In the run up to the Olympics nine billion was spend in upgrading the tube and Dockland Light Railway and that opened up all of East London’s economy in way because it wasn’t accessible or attractive for businesses.”

“Stratford now is the best connected train station in Europe,” declares Innes. “That part of the city and around the Docklands is much more accessible and that’s bringing in investors. It wouldn’t have happened if the transport infrastructure wasn’t there.”

In San Francisco, Laurel Barsotti sees a much more subtle advantage for the city in having, by US standards, a comprehensive public transit system in its bus, light rail and subway system.

“A lot of the entrepreneurs creating those companies are concerned their employees see people using their products,” says Barsott. “They want them riding the bus to and from work and see people interacting with their products.”

While in Barcelona, the public transport system is forming part of the local Smart City program where bus stops are Wi-Fi base stations and a fundamental part of the town’s communications network.

For cities, it may well be that having decent public transit systems is going to be the competitive difference in being a key part of the 21st Century economy.

Those parts of the world not investing in transport networks may find they are being left behind in the new economy.

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How did San Francisco become the darling of the tech scene?

How did San Francisco become the darling of the tech scene?

Regular visitors to San Francisco would notice how the city has changed in the last few years.

Companies that were setting up in Silicon Valley are now basing themselves downtown, the business community is energised and the seedier parts of the town are looking substantially spruced up.

To understand the change I interviewed Laurel Barsotti from the City and County of San Francisco as part of the Decoding the New Economy series of video clips.

Laurel is the council’s Director of Business Development and we discussed how the local government has worked with the community and business leaders to drive San Francisco’s economic growth.

The shift from Silicon Valley

A striking change in the tech industry is how the startup focus has shifted from Silicon Valley fifty miles away to downtown San Francisco. Laurel puts it down to a shift in the priorities of the sector.

“I think we benefited from a shift in the tech industry, being much more focused on design and user experience,” says Laurel.

“The people who are investing in that are people who want in San Francisco and people who want to live and work in the same city.”

“A lot of the entrepreneurs creating those companies are concerned their employees see people using their products, they want them riding the bus to and from work and see people interacting with their products.”

Changing the tax code

Like Barcelona, the Global Financial Crisis shook the city up, “with the economic downturn our whole city made jobs a top priority.”

Part of that review focused on the disadvantages of basing a business in San Francisco.

“It was bought to our attention that we were the only city in California that taxed stock options.” Laura says, “companies that wanted to go public were having to leave San Francisco to afford it.”

“We did an entire revision to our tax code which showed to investors they could count on San Francisco to be business friendly.”

Regenerating communities

Along with the problem of city taxes, the city was facing the problem of regenerating blighted neighbourhoods and the administration decided to address both problems together by offering incentives for businesses to setup in the mid-market district – I’d been warned not to call it ‘The Tenderloin.’

“We had a neighbourhood that was facing a lot of blight and we had not been able to successfully increase business and we had companies like Twitter telling us that our payroll tax was causing them problems and making it hard for them to grow in San Francisco,” Laura tells.

“So we combined those two problems and made it so a San Francisco company was able to move into a neighbourhood that needed more investment and business and it would be able to save some money while helping us improve the neighbourhood.”

The future for San Francisco

A common point when talking to city leaders and economic development agencies around the world is the focus on building a diverse economy and Laura sees that as part of the future for San Francisco.

In that vision includes manufacturing, biotechnology and tourism along with the internet based industries that are today’s investment and media darlings.

The focus though is on the city’s residents and how life can be improved for everyone, not just the business community and high tech investors.

“We are really focused on creating an economy for all,” says Laura. “We want to remain as diverse as possible.”

“Every San Franciscan, from no matter what socio-economic background, has a place that they can be.”

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Cities of Industry

Governments are beginning to recognise manufacturing is part of any advanced economy, some though are struggling to abandon the last thirty years of ideology.

The latest Decoding The New Economy interview feature Laurel Barsotti, Director of Business Development at the City of San Francisco discussing how the city refound it’s entrepreneurial mojo.

A notable point about Laurel’s interview is how she has similar views to Barcelona’s Deputy Mayor Antoni Vives about the importance of industry to San Francisco.

For some time it was an article of faith in the Anglo-Saxon world that the west had become post-industrial economy where manufacturing was something dispatched to the third world and rich white folk could live well selling each other real estate and managing their neighbours’ investment funds.

“Opening doors for each other” was how a US diplomat described this 1980s vision according to former BBC political correspondent John Cole.

It’s clear now that vision was flawed and now leaders are having to think about where manufacturing, and other industries, sit in their economic plans.

Barcelona’s and San Francisco’s governments have understood this, but others are struggling to realise this is even a problem as they hang on to dreams of running their economies on tourism, finance and flogging their decidedly ordinary college courses to foreign students.

For some political and business leaders this is a challenge to their fundamental economic beliefs. It’s going to be interesting to see how they fare in the next twenty years.

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Measuring an industrial hub’s success

What should measure the success of technology incubators and hubs? London’s Google Campus gives us some clues.What should measure the success of technology incubators and hubs?

A short article appeared on London’s City AM website yesterday discussing the successes of Google’s Campus and the government’s Tech City initiative.

What jumped out of that story is the quote from Benjamin Southworth, the former deputy chief of the Tech City Investment Organistion, that London’s first tech IPO is “probably 18 to 24 months away”

Southworth’s comments raise the question of how do you measure the success of initiatives like Tech City, does a stockmarket float indicate success of business or tech cluster?

The debacle of Australia’s Freelancer float which saw the shares soar over 400% on the first day of trading certainly doesn’t indicate anything promising about the startup scene down under apart from the opportunities for those well connected with insiders on Australian Security Exchange traded stocks.

In London’s case, Google’s Campus gives a far better indicator of what tech hubs and industrial clusters can add to an economy – £34m raised from investors in the 12 months to October 2013, 576 jobs created and 22,000 members of its coworking space.

Google’s statistics raise an interesting point about the different objectives for the stakeholders in incubators and hubs; entrepreneurs want money or glory, investors want returns, corporate backers want intellectual property or marketing kudos, governments want jobs and politicians want photo opportunities with happy constituents.

These different objectives means there are different measures for success and one group’s success might mean bitter disappointment for some of the others.

What the various partners define as success is something anyone involved in an incubator or hub should consider before becoming involved, in that respect it’s like a business or a marriage.

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Raising a citizens’ army

Will communities have to volunteer their own labour to make up for service cuts by cash strapped governments?

In the English Midlands the leader of Birmingham City Council, the wonderfully named Sir Albert Bore, recently suggested a ‘citizens army’ be raised to provide services such as libraries that are being affected by budget cuts.

Bore’s suggestion is a response to his council cutting library services in the face of community anger and legislative obligations, to assuage both pressures it’s hoped local volunteers can continue to run and maintain the threatened facilities.

The bind Albert Bore and the Birmingham City Council find themselves in is a quandary all communities and governments are facing as an aging population causes tax revenues to decline at the very time the demand for government services increases.

Faced with cuts, many groups are going to have to take matters into their own hands to keep services running. Some communities will do this well while others won’t.

It’s also going to be interesting to see how this plays over generations with baby boomers being far more likely to volunteer than their GenX or GenY kids, something probably caused by more precarious job security in the modern job market and the need for younger couples to work harder and longer than their parents to pay their rent or mortgage.

Angry baby boomers demanding the ‘government ought to do something’ may well find the onus is thrown back onto them to provide the services they believe they’re entitled to.

What is the most fascinating part of this predictable situation is how governments around the developed world have blissfully pretended that this wasn’t going to happen as their populations aged.

Perhaps the biggest citizens’ army of all will be the voters asking why the Western world’s governments and political parties ignored  obvious and inevitable demographic trends for the last fifty years. That would be a question worth answering.

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London’s quest to be the next Silicon Valley

How London is building its place among the global technology centres

In November 2010 British Prime Minister David Cameron set out his vision for London becoming the centre of Europe’s digital economy.

“We’re not just going to back the big businesses of today, we’re going to back the businesses of tomorrow.” Cameron said. “We are firmly on the side of the high-growth, highly innovative companies of the future.

Three years later London’s tech scene is booming with more than fifty incubators across the city and over three thousand digitally connected businesses in the Shoreditch district.

Building London’s resurgence

Gordon Innes, the CEO of the city’s economic development agency London and Partners, puts this down to a combination of factors including a young and diverse population coupled with being a global media and finance centre.

At the time of Cameron’s speech the cluster of tech startups around Shoreditch’s Silicon Roundabout area was already firmly established and the British government was acknowledging the industry’s successes.

“What we did, what the mayor did, what the government did,” Innes said, was to make sure that we removed as many barriers as possible to let the sector grow as rapidly as possible.”

The value of teamwork

Part of that effort involved business leaders, London & Partners, the mayor’s and Prime Minister’s advisers meeting on a regular basis to thrash out what the tech sector needed for the UK’s tech sector to thrive.

“There were changes to the tax credits for R&D and an important one was the Enterprise Incentive Scheme,” says Innes.

“Linked to that was a recognition of the need to link angels and high net worth individuals to be educated about the sector. It’s not just enough to balance the risk through the tax code.”

Another success for the UK startup sector was the British government introducing an entrepreneur’s visa that makes the country more attractive to foreign founders of startups.

Having built an community of tech startups, the city is now looking at how to grow the sector. “The big priority over the next few years is growing your business in London.” Innes says.

“Making sure you’ve not only have access to angel finance but also to stage one and stage two venture fund capital, you’ve got access to capital markets through new groups on the stock exchange and the AIM market.”

One of London’s big challenges is linking the city’s strong financial sector to the tech industry with a range of organisations like London Angels and City Meets Tech.

Sharing the vision

A notable point about the successes of London & Partners and Tech City UK is the co-operation between the levels of government along with having a shared vision of where the city should sit in the global economy.

Having a unified, strong and consistent vision is probably the best thing governments can offer a growing entrepreneurial or industry hub.

“Government can’t create that but government can certainly support it or, if it’s not careful, can destroy it,” says Innes.

London is showing how to support a growing sector of their business community, other cities need to be taking note how they can compete in a tough global market.

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Building smart cities

Barcelona has a big vision for the city’s future as Deputy Mayor Antoni Vires describes.

What will the connected cities of the 21st Century look like and how will they provide service for even their most disadvantaged residents?

The latest Decoding the New Economy Video features an interview with Antoni Vives, Deputy Mayor of Barcelona, about his community’s journey to become a smart city.

What’s striking about talking with Antoni is how passionate he is about Barcelona’s future and the importance of the city building new industries around the digital economy.

Particularly notable is the administration’s vision for the city which combines Barcelona’s traditional industries, such as the port, with future technologies.

“Barcelona has to become a city of culture, creativity, knowledge but mainly fairness and well being,” says Antoni when asked on where he sees his city as being in ten years time. “I would love to see my city as a place where people live near where they work, I would love to see the city self sufficient in energy and it should be zero emission city.”

“Rather than having a pattern of PITO –  ‘Product In, Trash Out’ we should move to what we call the DIDO model – ‘Data In Data Out’.”

It’s a broad view for the future which many other city and state governments will be watching closely.

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