Localism and economic regeneration in cities

(Photo by Jorene Rene)

Through the course of this year, I’ve spoken with stakeholders from a lot of cities in the UK about their goals for economic stimulus and regeneration. Often, those discussions start around how cities can use technology to boost economic growth, particularly for small and medium enterprise – in Sunderland, for example.

In very many cases, cities today have a focus on the “digital economy” as a source of economic growth. That’s not at all surprising given the digital economy is a significant and growing part of the UK’s GDP.

However, the digital economy is a very transferable economy; in his frankly titled 2007 paper “How Many U.S. Jobs might Be Offshorable?“, Alan Blinder of Princeton University concluded that “computer programming” was the easiest form of work to transfer from one physical location to another. So if cities want to build sustainable economic growth in the digital economy, we clearly need to think carefully about exactly what forms of “digital” activity that entails.

There are a number of ways to do that; for instance I  met a very interesting company recently, Lamasatech, who provide multi-touch screen solutions. Their technology is slick, exciting and leading edge. And whilst they do provide software, they also provide unique hardware technology. Their multi-touch surface is much more flexible and portable than other solutions I’ve seen. Access to science and leading edge manufacturing and materials are important elements of a successful digital economy.

In a similar vein, there’s a very interesting cluster of wireless technology expertise in Cambridge, epitomised by the Cambridge Wireless Network, and that encompasses science, design, engineering and technology. Some of the developments they’re working on in low-power, long-range wireless communication technologies such as the proposed “Weightless” standard could have a dramatic effect on the cost and feasibility of Smarter City and Smarter Planet solutions.

What’s particularly interesting about the Cambridge example is that it represents a self-reinforcing regional cluster; the critical mass of expertise in the region leads to innovative interactions which continually generate new value. Any other region attempting to stimulate economic growth in the same area of technology would have a significant challenge in developing to the point where it could compete against the Cambridge cluster.

Jay Bal from Warwick University wrote a very interesting paper in 2007 describing his work building online marketplaces to stimulate the formation and growth of such clusters. His West Midlands Collaborative Commerce Marketplace now drives contracts worth billions of pounds sterling every year into a cluster of small and medium enterprises in the West Midlands.

What’s key in Cambridge and in the West Midlands example is that one way or another the specific capabilities available in a particular region are being brought together in ways that create synergies. By design or by history, such regional clusters also have synergy with their physical environments, nearby academic institutions, the skills base created by the local education system, and other factors to do with “place”. In Sunderland, for example, there’s a long cultural tradition of social enterprise which will probably influence the future economic development of the city.

An interesting organisation seeking to exploit and enable these local synergies is Addiply. Addiply offer online advertising content – but they do it by enabling local businesses to sell online advertising space to other local businesses with whom they share complimentary markets and customer bases. By using advertising to create those local linkages, Addiply’s approach is one way to stimulate synergistic growth in local economies. Addiply’s CEO, Rick Waghorn, recently blogged about how he came up with the Addiply model, and how he thinks Addiply can compete against the big players such as Google Adwords by offering a more focussed value proposition.

As we go into 2012 with no let-up in sight from the tough and competitive economic environment we’ve been in for some time, I think these ideas will be crucial in shaping successful economic strategies in our cities and regions. It will be important to all of us that the cities that we live and work in use them well.

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About Rick Robinson
I’m the Director of Technology for Amey, one of the UK's largest engineering and infrastructure services companies, and part of the Ferrovial Group. Previously, I was IBM UK's Executive Architect for Smarter Cities. You can connect with me on Linked-In and as @dr_rick on Twitter. The views expressed here are my own.

10 Responses to Localism and economic regeneration in cities

  1. Duncan Anderson says:

    Rick, A very interesting post. I like your thoughts around localism and also how digital can play a role in rebuilding our economy. The other thing I have noted recently is the creative community in the UK – there is a burgeoning web/mobile community in many of our cities. The creativity and design genius that drives much of this is another example of a form of digital activity that can help to rebuild the economy and that is also not easy to offshore. Investment in these communities and business is critical to ensuring the UK builds its own digital economy. Just in the way that Silicon Valley continues to lead the world based on the innovation, design and creativity that emerges from there, so the UK can do the same. Arguments that “programming is easy to offshore” only apply where that programming is of the uncreative type. Programming that is part of a larger creative activity, with both hardware innovations and design creativity, has a MUCH higher value and is MUCH more difficult to offshore. I see no reason why these types of digital activities cannot form the basis of a major part of the UK economy if we encourage and foster such communities. Duncan

    Like

    • rickrobinson says:

      Hi Duncan,

      I couldn’t agree more, you are right on all counts! London has a huge creative economy that consumes a vast amount of innovative technology created locally and in close partnership – and globally, it’s very competitive. Birmingham is making interesting moves in similar areas between companies such as Maverick TV and education institutes such as the Ormiston Academy. I think these are exactly the areas cities need to focus on and create unique clusters of value.

      Cheers,

      Rick

      Like

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