Future Ready Cities

Location: Nationwide

Website: futureready.dell.com

For many decades, creating a future-ready local economy meant attracting industry. With industry came jobs, people to fill the jobs, and even more jobs from suppliers who supported the lifestyle of the people who came. It was a virtuous circle. Through their economic development efforts, cities reduced the traditional economic frictions of business: those of time, of distance, access to capital and information. To attract industry, they improved their ports, established railroads, built highways and schools, and created financial incentives for growth. And, historically, that worked very, very well.

But in recent years, technology has begun to eliminate or greatly reduce most of those economic frictions. Information is ubiquitous. Virtual infrastructure is as important as physical infrastructure. And access to capital has grown exponentially through democratization and the network effect. Rather than jobs drawing people, today, people draw jobs. But as always, there are winners and losers. Some metro areas are growing rapidly and creating audacious opportunities for members of their communities. While others struggle to march in place. So what strategies should cities adopt to grow and thrive in the future?

Recently Dell and Harvard University posed this question to several dozen experts at the 2015 Strategic Innovation Summit: Enabling Economies for the Future: Enabling Economies for the Future. Economists, educators, local elected officials and administrators, tech infrastructure builders, entrepreneurs and chief innovation officers convened to identify the factors that make cities best poised to thrive in our increasingly frictionless economy.

The consensus at the summit was that communities should focus on three key enablers: 1) attracting and nurturing human capital 2) fostering collaborative, growth-oriented commercial environments; and 3) building an enabling foundation of technology, telecom and physical infrastructure. In a frictionless economy, human capital is critical. Rather than jobs drawing people, today, people draw jobs. Workers care more about what they work on and who they work with than whom they work for, causing companies to pursue talent than the other way around. People arrive for the lifestyle offered by the community. They are attracted by continuous opportunities to learn from others, to collaborate together and to experience culture in all its diversity.

From this fertile talent pool emerge the innovators who will ultimately transform industries and create significant opportunities for economic growth. Future-ready cities understand the need to create a collaborative business environment, supporting not only established firms, with their employees and growing numbers of independent contributors, but growth-oriented entrepreneurs as well. We now know that entrepreneurs drive 50% of GDP and 75% of new jobs. And summit participants suggested that cities put particular focus on nurturing “gazelles”, high-growth companies that have an outsize impact on regional economic growth. Creating public-private partnerships with shared risks and rewards is one important tool that future ready economies can use to spur innovation. The infrastructure that serves citizens has to be robust.

Beyond just transportation, communities must also have the mobile networks, broadband connections and open data platforms that allow value creators to work on their own terms and businesses to provide public services with limited public funds. Coming out of the summit at Harvard, Dell partnered with IHS Economics, an industry-leading macroeconomics firm, to build an economic model for evaluating the future-readiness of cities. The Dell Future Ready Economies Model measures the performance of leading metro areas against the three pillars of human capital, commerce and infrastructure. The model has allowed Dell to identify the Top 25 Future Ready Economies in the U.S. and let public and private sector community leaders compare their own strengths to those of other Future-Ready Economies. (Spoiler alert. The San Jose metro area, home of the Silicon Valley, was ranked number one.)

The 25 cities on the list are well-distributed across the U.S., suggesting that success is no longer just about location, but rather a strong embrace of the factors that enable cities to become future ready.