EcDev Journal

Seven Communities in Search of a Brain Gain

Posted on Thursday April 03, 2014
Bell Headshot 2012

By Robert Bell

 

“The nation-state is too small to deal with the world’s problems now.  Only cities in a network, formal or informal, can do that.”  The words are from author Benjamin Barber in his book If Mayors Ruled the World.

I have to confess that I wish I had written them, because it perfectly expresses what the Intelligent Community Forum works to achieve through its Intelligent Community Awards program.  At the end of January, we named seven cities and regions as our Top7 Intelligent Communities – models for using today’s mighty engines of economic and social disruption as powerful tools to grow their economies, solve social problems and enrich their cultures instead.  The tools are broadband and information technology.  At a time when many places are still wrestling with how get their citizens a decent broadband service, these communities are making great strides at turning that broadband asset into sustainable prosperity.

The Top7 of 2014 are Arlington County, Virginia and Columbus, Ohio in the USA; Hsinchu City and New Taipei City in Taiwan; and three Canadian communities: Kingston and Toronto in the province of Ontario, and Winnipeg, Manitoba. 

You have surely heard of some of them and not of others.  They vary in size from 160,000 people to 3.9 million.   What they share is a dedication to – and success in –producing brain gain instead of a brain drain

The economy of the successful 21st Century community is built on skilled and knowledgeable people at all rungs of the economic ladder, who use the new infrastructure of broadband to innovate in business, government and civil society.  There will always be a need to attract investment and chase the smokestack.  Every economy needs fresh input to remain vital.  But the fundamental health of a city or region cannot depend solely on importing prosperity.  It must rely on seizing its own destiny. 

Open any print or digital publication that covers business news, and you will find stories about companies of intergalactic size: Wal-Mart and China National Petroleum with sales well north of $400 billion; Volkswagen reporting about $250bn in revenue; Samsung at $180bn, and Apple and Gazprom at a piddling $150bn or so.   

Yet when it comes to the local economy, where most of us live and earn our living, the giants are not where the action is. In Europe, 99% of all businesses are small-to-midsize (SME). They provide two-thirds of all private-sector jobs and create more than half of the total value in the economy.  

In the US, SMEs make up all but 0.3% of private-sector employers and provide 49% of private-sector employment. They contribute 64% of all new private-sector jobs and a remarkable 98% of all companies involved in export.  In Brazil, SMEs make up close to 100% of all private-sector companies and employ 68% of the workforce. 

Most SMEs are income-replacement companies. Their owners prefer to own their own small business than work for someone else, and their growth is slow. But the best jobs are typically found in companies that grow, and these growth companies innovate in products, services or processes.  In 1987, Professor Robert Solow won the Nobel Prize in Economics for demonstrating that the introduction of new technology was responsible for as much as of 80% of the growth in a nation’s gross domestic product.  And in the 21st Century, innovation is powered by information and communications technology (ICT), whether we are talking about smartphone apps, life sciences, industrial processes or agriculture. 

 

An American County Rises to the Challenge

The smallest self-governing county in the US, Arlington, Virginia manages to be both the nation’s most densely populated and most livable county.  Livability is a product of forward-looking planning during the 1980s, when the county successfully lobbied for an underground Metrorail line to connect with an existing commercial corridor rather than a less costly route along a future highway.  High-density economic growth took place around Metrorail stations, leaving quiet residential neighborhoods bordered by parks and open space.  Arlington County has a highly educated population (69% have a university degree) and a public school system ranked in the top 1% nationwide, where students hail from 126 countries. 

But the county, which borders on Washington DC, faces significant challenges to its future.  Decisions by the US Department of Defense will remove 13,000 jobs over the next few years.  Expansion of the Metrorail will put the county into competition with cities farther from Washington that offer lower costs.  And Arlington has found that its dynamic population is also a transitory one.  The highly mobile workforce makes workforce retention difficult and creates obstacles to maintaining the spirit of volunteerism and collaboration that has underpinned the county’s success. 

To combat these challenges, the county is developing its own fiber network to leapfrog current broadband capacity.  Government-business-university collaboration has been critical to its innovation economy; the county is now reaching out to Latin business owners to more closely connect their energy and entrepreneurship to the mainstream.  It is taking its community engagement out of the meeting hall and putting it online and mobile.  And a new round of master planning is promoting redevelopment of commercial centers to create dynamic neighborhoods attractive to innovators and leading-edge businesses.  These and other projects promise to maintain Arlington County’s edge in the innovation economy.

 

New Life for an Old City

Kingston is one of Canada’s oldest cities, founded at a strategic intersection of lakes and rivers, with an historic waterfront and an employer base of Federal and Provincial agencies that attracts more government grants per capita than any other city in the nation.  It has been ranked Canada’s smartest city, thanks to deployment of an open-access community broadband network supplemented with investment in the Eastern Ontario Regional Network bringing 10 Mbps service to rural neighborhoods.  More than 90% of Kingstonians now subscribe to broadband. Local government has developed a multi-faceted strategy to diversify its economy while maintaining the culture and quality of life that residents treasure.

It is aided in this undertaking by the presence of Queen’s University, a Canadian top 10 research institution and St. Lawrence College, a 2-year diploma institution with schools of business, computer and engineering technology, health sciences and skilled trades.  Queen’s University founded an office in 1987, called PARTEQ Innovations, to identify intellectual property and support its commercialization.  PARTEQ went on to build Innovation Park, where academic, business and government researchers work to pioneer new technologies and bring them to market. 

Innovation has a particular focus in Kingston.  The public, business, education and government have rallied around a goal to make environmental sustainability its focus.  A community planning process resulted in Sustainable Kingston, a plan that gave rise to a nonprofit of the same name.  As a result, most research and commercialization focuses on greentech and cleantech, from the Federal GreenCentre Canada research lab to a Fuel Cell Research Centre and High-Performance Virtual Computing Lab.  Successful businesses are also pioneering in automation, life sciences and health technologies.  In addition to sustainability, the city launched a Kingston Culture Plan in 2010 to increase the impact of the city’s already sizeable arts and culture economy, both for its own economic value and its attractiveness to creative professionals.  City leaders see these efforts as steps in social transformation, helping a community seize the vast potential of the broadband economy.

 

On the Waterfront

Toronto has both the assets and the liabilities that come with being Canada’s largest city.  On the asset side is its diverse economy, with key clusters in finance, media, ICT and film production, and success as a magnet for immigrants.  Major carriers offer high-quality broadband to 100% of residents, and its five major universities and multiple colleges have attracted 400,000 students and helped ensure that Toronto has more residents with undergraduate degrees than London. 

On the liability side is the highest cost of living in Canada and transportation gridlock that gives residents of the Toronto region the world’s longest average daily commute times.  These factors have helped the suburbs attract new and existing businesses, making once-sleepy cities like Mississauga into business hubs in their own right.  To reverse this trend, Toronto is doubling down on the value of a dense, superbly equipped and culturally rich urban experience.  The centerpiece is Waterfront Toronto, North America’s largest urban renewal project, which is revitalizing 800 hectares of brownfield shoreline with 40,000 residential units, parks and one million square meters of commercial space designed to the highest environmental standards.  Offering 1 Gbps fiber-based broadband– provided at no cost to the 10% of housing set aside for low-income residents – the Waterfront is expected to offer a home to 40,000 new jobs focused on knowledge industries. 

Though impressive in size and scale, the Waterfront is only the most visible of many public-private collaborations through which the city is pursuing an ICT-powered future.  The MaRS Discovery District supplies housing, incubation, acceleration and investment services to hundreds of early stage portfolio companies downtown, while the Ryerson University Digital Media Zone gives entrepreneurs space and services to move great ideas to initial commercial success.  The Centre for Social Innovation does the same for social innovators and its successful model has led to operations across four locations in two countries.  Toronto’s libraries offer computers and training to tens of thousands, while outreach programs equip families with inexpensive IT, connectivity and training.  With C$2 billion planned for transportation investment over the next 25 years, Toronto is preparing the physical, human and digital infrastructure for continued success.

The Top7 Intelligent Communities show what is possible when cities and regions commit themselves to brain gain as a primary requirement for economic development.  More than that, they show how it can be done anywhere that people care enough about the place they call home. 

 

 

Robert Bell is co-author of the soon-to-be-published Brain Gain, which explores how to create high-quality employment at a time when business and government must innovate as never before to maintain their competitive edge.   More at www.intelligentcommunity.org.   He is also co-founder of the Intelligent Community Forum, and the director of its research, analysis and content development activities.