How Ready is your City for the Digital Economy?
Most city leaders realize their cities are not prepared for the next wave of the digital economy, but few of them know what to do next.
As digitization moves from basic applications like social media and e-commerce to more complex industries like education and healthcare, entrepreneurs tackle harder and harder problems. And that means government is more involved and that legacy institutions will inevitably play key roles.
Yet, in the Innovation That Matters 2016 report, we found that just 32 percent of entrepreneurs in the United States felt connected to local corporations, and only 33 percent felt connected to other key institutions, like foundations and city governments.
Innovation That Matters examines and ranks 25 cities’ readiness to capitalize on the inevitable shift to a digital economy. It carves out critical trends every city leader can learn from and offers recommendations local leaders can adopt to strengthen their region’s digital competitiveness.
Even the cities ranked the highest had weaknesses in areas that will be critical to the future of the digital economy. For example, even though Washington, D.C., ranked first in having an educated millennial population, that did not translate to being number one when it came to having a workforce with the necessary technology skills. Every city can and must do better here, and government can help lead the way. But how?
City leaders can lead and succeed in the next wave of the digital economy by applying the fourfold framework developed in the report.
To start, they must remove the roadblocks that challenge every city, such as access to capital. A proven first step is to back a super hub that creates community density, draws investments and spurs critical connections to celebrate and spark further innovation.
Every city has industries, companies, people, resources or other assets that can be tapped to create the future. City leaders should think about what makes their cities unique and stronger and purposefully connect those things to those developing the next wave of businesses for the digital era.
Every city leader would likely agree that their community should be a great place to spur innovation. But making that a reality requires taking the time to bring together entrepreneurs, investors and other key players to imagine new possibilities. Being able to articulate a vision for the future is critical in determining how to get there.
In hindsight, it’s easy to tell if a community has successfully produced innovative ideas that have scaled. But, without leading indicators, it’s difficult to predict the future trajectory of most cities. As organizations around the globe try to establish universally agreed upon measures, Innovation That Matters provides a variety of metrics city leaders can begin using now to evaluate their progress in developing their digital era economies.
Regarding policy, regulatory lag is a major obstacle to innovation around the world. Frameworks established decades ago no longer apply, and leaders at all levels need to be proactive in understanding and regulating for a digital economy.
As technology has advanced, governments have been playing defense while innovators take random shots on goal, leaving us with a patchwork of laws and tensions.
Governments, together with startups and corporations, need to re-examine the body of regulation through the lens of technological possibility — artificial intelligence, robotics, smart objects, virtual reality, bio-security, drones and more. New rules are required for the new era.
In the same way certain cities became major commerce centers in the industrial era, new cities will emerge as leaders in the digital economy. There isn't one single recipe for success but many things that cities need to work on to compete.
The last five months of research unearthed many success stories. Pittsburgh is doing well connecting startups with universities; Baltimore is creating a cohesive community; and New Orleans is attracting educated young people. Many more examples abound.
Yesterday's expertise will not guarantee tomorrow's economic wins. Without leaders who understand this and act to help their communities transition, cities will continue to fall behind. Don’t let your city fall behind. Prepare for the breathtaking array of technologies that will continue to transform your city and play an integral role in applying the fourfold framework to shape your community’s success in the new era of the digital economy.
Photo credit: Flickr
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