Measuring Cities As They Race to the Top

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A fresh focus on cities as indicators of startup community health has attracted a new generation of local leaders championing entrepreneurship to the growth and quality of life of their metropolitan areas. Many are also working to improve our understanding of the city entrepreneurship phenomenon and its complex dynamics. How are cities assessing and benchmarking their performance?

As we see greater engagement from traditional institutions in accelerating rates of new firm formation, we are beginning to see more effective methods that assess the impact of any specific intervention in an ecosystem. Cities provide a more “controlled” environment for evaluating interventions, or at least more manageable boundaries for assessing impact.

Although the field is still nascent, here are a few resources that measure through a variety of analytical dimensions:

  • The Kauffman Index: Main Street Entrepreneurship unveils and analyzes the 40 largest metropolitan areas of the United States.
  • The Global Startup Ecosystem Ranking, by Compass, ranks 25 city ecosystems from across the world, and also presents an ecosystem lifecycle model and lessons that apply both to startups and ecosystem leaders.
  • The CITIE Index (by Nesta, Accenture and the Future Cities Catapult) combs 40 cities for best practices of nine pivotal roles city governments can play to support innovation and entrepreneurship.
  • The European Digital City Index (EDCi), led by Nesta, describes how well 28 European cities support digital entrepreneurship.

A city’s entrepreneurial environment is the result of complex connections between ecosystem actors – from entrepreneurs, their mentors and funders, to government leaders and academic researchers – so the task to measure a city’s performance is not an easy one.

The Global Entrepreneurship Research Network’s mapping project provides a visual sense of the complexity of connections in any given ecosystem. Here is one map describing the scene in New York as it relates to venture capitalist firms and startups:

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As we explore what’s next in assessing city ecosystems, the complex reality of ways stakeholders interact suggests measuring and mapping should go hand in hand. The unprecedented proliferation of resources available to entrepreneurs calls for refined tools – visual and numeric – to detect weak and strong points to tackle.

Cities will likely remain the focus of policy innovations and efforts to boost economic growth. The European Commission, for example, recently unveiled the nine city finalists for the European Capital of Innovation Award 2016. The shortlist included cities such as Turin, which is said to have won a place in the final nine due to their work in supporting start-ups.

Let’s not forget, however, that when it comes to the kinds of public policies that help entrepreneurial vibrancy, no city is an island. While there is an increasing number of local issues that impact startup performance, national level decisions still naturally affect a city’s entrepreneurial performance, for good or ill.

As the array of methodologies to map and measure the health of entrepreneurial ecosystems expand, we will watch for common priorities to assist leaders with comparative analysis. After all, as we have learned from the “Doing Business Study” from the World Bank, there is no greater motivation for even the least engaged political leader in this field than comparative rankings. Let us know what your policymakers plan to map and measure – and how.

Photo Credit: Flickr

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