How is the new city-making industry evolving to help cities create extraordinary economic value?

A new city-making industry is perhaps the best vehicle for cities around the world to successfully deal with mega challenges such as: energy efficiency, environmental sustainability, natural disasters and manmade disruptions, infrastructure development & renewal, and the holistic deployment of smart technology.

I have observed and participated in the making of this emerging industry since the beginning of the twenty-first century as I helped cities in Asia, the Middle East, Europe and the Americas plan and launch districts designed to support innovation and entrepreneurship. Conceived after the turn of the twenty-first century, the intent of such districts is to jump start extraordinary high value industry clusters within 10-15 years, a process that formerly took 30-50 years or longer in places like Silicon Valley, Cambridge, UK and the Kendall Square area around the Massachusetts Institute of Technology.  These projects are propelled by alliances forged among the following: public sector agencies at local and national levels, established start-up businesses of all sizes, education and research institutions, financing enterprises, real estate developers, and information & communication technology companies.

At the heart of these alliances is a mindset that encourages participants to work together across organizational boundaries in order to invent new ways to discern and exploit economic and business opportunities. This attitude supports the adoption of new business models and the transformation of relationships that move participants beyond their own core competence and to a mode where they can create products and services outside of ‘what they always do.’ The organizational form and leadership of cluster-making alliances varies from city to city, influenced by local capabilities, interests and politics.

High value clusters, which act as linchpins for economic development, are complex ecosystems of (i) physical facilities for corporate-specific & shared research, development, education, business incubation & acceleration, and product-making, (ii) communication technology, and (iii) human talent. These clusters serve as a platform for social and organizational networks to facilitate intersections among disciplines and organizations within knowledge supply chains, from the point of idea creation to marketable products and services. Underpinning the clusters is an array of inducements, e.g., tax or funding incentives and regulatory permissions, which support entrepreneurial risk management.  Clusters are hosted within large-scale, mixed-use developments (100-500 acres) with digitally enhanced environments designed to serve the life and work style of a creative, hard driving workforce.

Three key characteristics mark the behavior and organization of alliances as they plan for, weave together, and create synergy among the many elements of the cluster.

Convergence. Participants converge their expertise, interests and knowledge at the very outset of a cluster’s conception to co-invent a narrative that weaves together a coherent story about purpose and how it can be achieved by a blend of physical and human capital. The narrative is steeped in the economic, social capital, business capabilities and interests of the place, the region and its initial & future occupants. The narrative clarifies how development will add value to all interested parties and lays out a conceptual roadmap for creating the cluster’s ecology.

Launch and Learn. Alliance participants quickly mount small-scale experiments and beta projects, even as they design the narrative. Planning and implementing these projects help alliance members to collaboratively envision potential futures at a time of uncertainty and rapid change.  This exercise also helps participants learn how to proactively contribute their expertise to one another’s work.

Networked Leadership. Leadership for these alliances plays out through a network of people who engage and align the interests of the full array of stakeholders. These networks have little in common with traditional schemes for project management that function with predetermined roles and lines of authority. Members of the cluster-making network act with agility to achieve what has to be done. Three actors are critical for the network to function. One is the enabler – a person who forges a commitment to the cluster among colleagues and business units within his or her own organization.  A second is the trend spotter– a creative contributor who skillfully brings new –sometimes-disruptive – ideas into the concept and planning arena.  The third is the integrator – a person (sometimes a group) who plays a facilitative role working with the different groups to help them define their interests in the cluster and understand how those interests can be served through collaboration with others.  The integrator is essential for the group to weave together different perceptions and objectives into a shared narrative.

Although industry clusters occupy a small part of their host cities, the lessons learned from the alliances supporting them are germane to how cities can respond to the mega challenges that they face. Like cluster-making, these challenges elude simple definition and defy solution through traditional compartmentalized, linear responses. They also require many independent groups to converge perspectives and expertise. Fluid alliances will continue to form in response to cities demanding effective solutions to the mega challenges before them and businesses coming to appreciate the extraordinary large market for solutions delivered through the alliance approach. Over time, these will add-up to a new city-making industry.

 

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Michael Joroff

About Michael Joroff

Michael Joroff consults globally about the formation of large-scale entrepreneurial clusters. He served as Senior Lecturer at MIT’s Department of Urban Studies and Planning and directed MIT’s Laboratory of Architecture and Planning for three decades. He has been an advisor to the Seoul Digital Media City; twofour54 in Abu Dhabi (the Abu Dhabi media venture); Zaragoza’s Milla Digital; Salford/Manchester Media City UK; Pacific Quays Creative Quarter in Glasgow; Titanic Quarter in Belfast; the Medellin, Columbia Innovation District; the innovation district in Florianopolis, Brazil; and several innovation districts in London. On behalf of MIT he convened and facilitated five workshops with the directors of these and related projects around the world to reflect about common lessons. During the 1990s he worked the US Western Governors’ Association to create strategies for virtual clustering in the sparsely populated mountain states of America’s far west. He has participated in new town development in the United States and in the Caribbean; and has worked with government officials and private developers prior to and after Olympic and Expo events in Asia and Europe to shape long-term value for their host cities. He also advises corporations throughout the world about aligning their real estate strategies with business processes. He is a graduate of Cornell and Harvard Universities.