In previous posts, we talked about the impending renaissance of Detroit as a Midwestern Silicon Valley of sorts, with a lot of interest from startups and tech companies in locating to what is becoming trendy Woodward Avenue.
It seems many other beleaguered, former urban battle zones are also suddenly becoming hip centers of entrepreneurial culture. Brooklyn, for one, is now about as “in” as any tech entrepreneur, artist, and anyone in between can find.
Anyone remember the movie “Fort Apache, The Bronx“? Or the TV series “Hill Street Blues“? Both dramas were situated in gritty inner-city neighborhoods, where the only form of entrepreneurial activity portrayed was the drug trade, and hopelessness, utter chaos, and lawlessness reigned. (That’s how Hollywood saw it — in reality, many dedicated and hard-working neighborhood groups kept these communities vital through the tough times.)
The imagery of decay, however, is becoming as passe as the Old Wild West, as inner cities emerge as destinations of choice for the entrepreneurial and professional class.
Simultaneously, the sprawling suburbs are losing their appeal for many reasons. Recent data shows exurb growth has come to a standstill, and are no longer on “the cutting edge of growth.” The cutting edge, it appears, is downtown.
Daniel Isenberg has taken note of the changing dynamics of inner-city economies. The Babson Global professor and founding executive director of the Babson Entrepreneurship Ecosystem Project writes in Harvard Business Review that “the centripetal force of today’s cities is pulling the ambitious and educated back in, and increasing cities’ innovative capacity, without sacrificing (at least some would argue) their inclusiveness.”
The pull of the cities for entrepreneurs and professionals is is a global phenomenon, Isenberg says:
“Entrepreneurs, too, are moving downtown: London, Boston, Barcelona and Buenos Aires are balancing the suburban pull of Silicon Valley and Route 128. Venture capitalists are close behind. Smart mayors, such as Boston’s Mayor Menino and New York’s Mayor Bloomberg, are fostering holistic entrepreneurship ecosystems to strengthen and accelerate the trend. Nor do you have to be a mammoth metropolis to have an urban entrepreneurship policy: led by Mayor Jorge Rojas, this month a dozen public and private institutions in the city of Manizales, known throughout Colombia for its concentration of universities and safe environment, in partnership with the Babson Entrepreneurship Ecosystem Project, launched a four-year initiative to dramatically increase the concentration of high growth entrepreneurship in the city.”
What’s the key to growth in formerly distressed urban areas? Entrepreneurship, pure and simple, Isenberg says. Governments throwing money at the problem won’t go far enough. He outlines the five keys to success in building new entrepreneurial hotbeds where only hopelessness existed before — advice targeted at city officials, but helpful for any business leader wanting to build up his or her community:
Develop an inclusive vision of high growth entrepreneurship. “You need to tirelessly communicate a coherent message to all of the stakeholders and residents, highlighting the entrepreneurial benefits of dignified job creation, quality of the environment, and innovative capacity.”
Use best processes, not best practices. “Boston’s Innovation District was launched with clear vision and commitment, but, surprisingly, one of its keys to success was that it had no detailed plan, budget, organizational structure, nor even an officially designated team. The fuzziness was a counter-intuitive advantage in engaging diverse stakeholders to define for themselves the role they would play…. Experiment. Test. Invent.”
Define principles, not clusters: “Don’t prioritize specific sectors… Currently, clean tech and mobile applications, for example, are de rigeur. Tomorrow it may be space travel. But you should ask, not tell. It is the entrepreneur’s job, not City Hall’s or that of a consulting firm, to learn how to identify opportunity, usually where most people think it doesn’t exist.”
Invest time, not money: “One of the big temptations is for governments to step into the ubiquitous resource void with capital for either the ventures themselves, or financial incentives for capital providers, or direct funding of space for entrepreneurs. This is to be avoided: better to spend your energy persuading the stakeholders that it is worth their while to make those investments.”
Fight the battle for talent, not capital. “Although entrepreneurs will always complain first about the chronic difficulty of raising money, the smart ones know that talent is the more important battle to win, because money follows talent.”