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Creating An Innovation Hub

Mal Fletcher
Added 15 February 2013
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Turning a City into a Magnet for Inventive Minds

'Innovation distinguishes between a leader and a follower,' said Steve Jobs. What is true of individuals may also be true of cities.

The leading cities of the world are, to one degree or another, innovation hubs. They draw inventive minds and entrepreneurial thinkers like a magnet.

In some cases, such cities are not their nation's capital. Some are regional centres, yet they punch way above their weight because they have focused on certain industries and provided a culture of inventiveness.

Studies worldwide reveal that certain common factors are at play whenever a city becomes an innovation hub, especially in areas involving emerging technologies.

One such study compared the development of Seattle, Washington, with that of other similarly sized US centres. What was it, asked the authors of the study, that caused Seattle to become one of the world's most powerful and inventive software, internet and biotechnology hubs, in less than two decades?

Once a flourishing port, Seattle was hit hard by the Great Depression. During the 1940s and 50s, the Boeing company established Seattle as a centre for aircraft manufacturing. In the 1980s, the city extended its interests into new technologies, specifically in biotech and computer-related areas.

New start-ups helped to boost the city's population by 50,000 in the 1990s alone. The city continues to add innovation today, having recently become home to a thriving cluster of green industries.

The study revealed four main reasons for Seattle's emergence in the 1980s as a favoured destination for entrepreneurs in R&D and in business. The city had a well trained work force; it offered relatively cheap rents, in both the private and business sectors; generous grants were available for start ups and research, and the city offered an excellent transport system, which supported a high quality of life.

These characteristics are not confined to innovation clusters cities in the United States. Closer to home, cities like Cambridge, Eindhoven in the Netherlands and Zelenograd, near Moscow, have all become technological hubs, within just a few decades. In each case, conditions similar to those found in Seattle have played a role.

Cambridge, with a population of 120,000 has become home to the so-called 'Silicon Fen', where much of the UK's technology sector is to be found. This region is one of the UK’s most productive and almost a quarter of the jobs in Cambridge are provided by its 900 high-tech businesses.

Like Seattle, it is well placed to attract graduates from its university and the region attracts 25 percent of all of the UK’s venture capital every year. It also receives a healthy percentage of the EU's venture capital investment into Britain.

Yet the city only became involved with technology industries in the 1970s, when the Cambridge Science Park was established. It was the result of an alliance between Cambridge University and local industry.

Arguably, the resulting development of technological expertise is part of the reason that Cambridge boasts significantly more Nobel prizes for science than its great rival, Oxford.

Zelonograd is a city of 220,000 inhabitants, close to the capital Russian capital. During the Soviet era it was entirely government supported, as a research centre focussing on technology. Today, it is home to 100 technology companies and is sometimes still called the ‘Soviet Silicon Valley’, lying at the heart of Russia's technology revolution and enjoying favourable business tax rates.

Eindhoven in the Netherlands is of a similar size and has at different times been a centre for industries dealing in textiles, cigars and cars. Today the city is best known as the headquarters for Philips, the multinational electronics giant, which is still the world's largest producer of lighting and a huge research base for other technologies.

A quarter of all jobs in the region are within the technology industry. Within the city, technology companies like Philips have built or entered into many joint ventures with local research institutes, including High Tech Campus Eindhoven and the Eindhoven University of Technology.

The city is also part of a research and development triangle, along with Leuwen, Belgium and Aachen, Germany. Around four billion Euros are spent on R&D in this region alone, every year.

There are several common threads running through the contemporary histories of each of these innovation hubs in the greater European region.

The first is their instinct for alliances, their ability to link together research and learning institutions with hands-on industries and start-ups.

A second common element is the fact that, like Seattle, each city is able to draw upon awell trained work force, with technology or science-based colleges drawing the best and brightest. Civic and business leaders have worked together to build strategies for retaining graduates.

Meanwhile, each city is able to offer generous funding for entrepreneurs and research establishments, either through local or national government grants, or by attracting international private investors. In some cases, cities have sought and been granted special investment status by the state and a higher profile in international trade promotions.

In each case, constant local attention to civic amenities and urban renewal has contributed to a quality lifestyle for people choosing to work in the city. Transport infrastructure, recreational facilities and good schools add to the attraction for families.

So, what might Britain's leaders, in civic and business life, learn from the experience of these cities? Aside from Cambridge and London - which has, in recent years, developed a new and thriving creative cluster in and around Soho - are there other centres that could potentially become innovation hubs?

Recession and, in some cases, immigration have hit a number of British cities hard. That's particularly true for smaller regional centres that had less infrastructure to deal with rapid change in the first place.

Yet with the right planning, tough times can also provide an opportunity for a major civic reboot, kick-starting a culture of innovation.

Though there are differences of scale when compared with Seattle, some British cities are already well positioned to follow a similar route.

The City of Norwich, for example, is relatively well placed to become an innovation hub.

Already, Norwich offers a healthy environment for research and development, particularly with the growth of the Norwich Research Park, which is fast becoming a cluster for scientific research. It is home to, among other groups, the Institute of Food Research (IFR) - ranked among the world's top research organisations - and the Genome Analysis Centre.

The growth of the latter, along with the fact that Norwich has a new but highly rated medical faculty within its university, suggest a potentially strong future for the city in the life sciences, including biotechnology and bio-ethics.

A relatively healthy level of start-up and research funding is offered by various local councils. Meanwhile, the momentum within the Research Park and other emerging research centres makes them attractive for outside investment, which will benefit regional industries in the long-term.

At the same time, Norwich is placing a high priority on the development of its transport infrastructure. It currently boasts the most Park and Ride sites in England and the local bus service is being heavily promoted by council.

Generally speaking, property rental prices in Norwich - both for private and business use - compare relatively favourably with the rest of the UK. Norwich also boasts a high graduate retention rate - currently the second highest in the UK. Forty percent of graduates choose to live and work in the city after they have completed their studies. 

There are, of course, obstacles to be overcome. Transport infrastructure is one - and it is a common challenge for regional centres reaching for hub status.

In Norwich's case, the widening of the A11, the main access road into the city from the south, is only now gaining momentum after years of under-development. In tough times, some cities seem to want to pull up the draw bridge and close off contact with their near neighbours. In the age of globalisation this is anathema to innovation.

Meanwhile, recent increases in business rents have squeezed smaller companies and the city has one of the lowest numbers of graduate schemes in the country. Many graduates, while remaining in the region, are not able to work in their chosen fields.

Yet Norwich clearly has huge potential - if it is given the right leadership, in both the civic and business environments.

Therein lies perhaps the biggest challenge for any city aiming for innovation hub status. The level of leadership culture must lift to match the city's potential, over the medium to long-term.

Entrepreneurial people, in science and business, need to feel that the system will provide stability, while supporting an atmosphere of inventiveness and risk.

In recent times, cities like Norwich have seen the opening up of a leadership deficit, particularly in terms of political leadership. Public trust has taken quite a severe hit. (I have written more fully about the impact of a leadership deficit elsewhere on this site.)

In cities seeking to draw innovators, the political culture will need to rise to meet the city's potential.

Alliances of trust will need to form between leaders from different political wings and different business sectors.

True leaders are more than managers. (I don't wish to downplay the role of management, far from it. But leadership requires a different skill-set and, often, a different mindset.)

Leaders are essentially cultural architects; they mark out a vision, map out a strategy and marshal activity, to create an environment in which people flourish and projects fly. The best leaders inspire innovation at every turn, both by personal example and by the culture they inspire within their team and workforce and the wider civic environment.

Good leadership creates the cultural architecture needed to promote confidence, which is the key to innovation. And true leaders do not try to address long-term strategic problems with short-term tactical responses.

In many ways, innovation begins with conversations between human beings who see things differently. Ideas don't hang out in singles bars; new ideas are always the product of associations between existing ideas.

If ideas are going to connect, people must connect in an atmosphere of trust. That process begins with leaders who can take the long view, creating a generous culture in which inventive people flourish, for the common good. It starts with leaders who can see beyond their own corporate, or political, front doors.

Click here to listen to Mal Fletcher's BBC Radio interview on this subject

Mal Fletcher will be addressing the subject "Creating Innovation Hubs" in more practical detail at the 2020Plus Civic and Business Leadership Event in Norwich, UK on February 21. The event is hosted by TheSpace, Norwich. For more details, please visit: http://2020plus.net/norwich

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I absolutely agree with you Mal on the danger of elevating of our leaders. There is something in man to want 'a king'. It's present in our current celebrity culture. It's curious when we see it in the world and it's pathetic when we see it in Christendom.
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Mal, I saw you at Hillsong London and since then have visited your site a few times. Really enjoy your work. Very useful insights and content.
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