On the Other Hand...

I'm only part way through reading David Wolfe's latest work "21st Century Cities in Canada: The Geography of Innovation" (recently released and available as a free download from the Conference Board of Canada). Yet already I have been struck by the number of countervailing arguments to what we have long accepted as true in the contemporary world of economic development. There's a lot of "on one hand... on the other hand..." Personally I find this quite refreshing because the report acknowledges that in Canada "one size does not fit all" and those concerned about cities and innovation would be wise to tailor their strategies to fit the particular circumstances of that particular city. Despite the fact that this study is explicitly focused on cities --- especially large cities --- it does acknowledge that smaller communities also have aspirations and prospects. It may be a tough sledding for those smaller communities but it won't get easier by trying to mimic our biggest cities.

For instance, we have long thought (or been told) that bigger is better. A city that wants to "make it" globally or even domestically needs to grow to the point where it can offer the specialized infrastructure on which innovative firms depend, the breadth and depth of employment opportunities, and the socio-cultural attributes so attractive to highly-qualified personnel. Now we learn that there is another school of thought: a city can actually get "too large" to be able to retain these characteristics. At some point, the creative atmosphere found in an innovative city apparently begins to break down. Living in that city becomes too expensive, it's increasingly difficult to maintain everyday contact with like-minded (innovative) people. The social diversity begins to settle out into polarized socioeconomic classes. Mind you, with the "too large" threshold set at about 6 million residents, few Canadian cities --- save Toronto --- need to worry about that right now. But it does merit monitoring. Apparently we can be victims of our own success.

We have long thought that concentration of employment in one or two sectors (across multiple firms) is a good thing. We've referred to this as a cluster and considered the development of the clusters to be a key strategy in encouraging the development of a more innovative economy. Like-minded people can interact easily and move among firms to pursue career advancement. An outstanding corps of people in particular fields can crank up the innovative juice to produce outstanding results. Now we learn that there is another school of thought: diversity across multiple sectors can lead to innovation as well... ideas which germinated and grew in one sector can be transferred to and applied in another sector, leading to a completely different form of innovation in that setting. Apparently, cross-fertilization across sectors can also be a potent stimulant to innovation.

We have long thought that successful business attraction hinged largely on a community's location (in relation to markets), its transportation systems, access to raw materials, and the availability of a suitably-skilled, competitively-priced labour force. But that's now "old economy thinking". Now we learn that there is another school of thought: successful business attraction now hinges on a community's ability to create a sense of place, especially a place where creative, innovative people will want to live. And that will bring the companies that need those kinds of employees. It's what the employees want and value that will guide the company's locational choice. This is especially relevant for those communities that believe they have the critcal mass to become --- and be known as --- a "green" or "sustainable" community. Community development that aligns with the value set of creative, innovative people might find itself a beacon to the very people that will drive the knowledge-based economy.

I'm going to continue reading this report (it's a couple hundred pages so it'll probably take me a couple of days!) But I already sense that those of us interested in developing innovative economies in communities of all sizes will find some useful nuggets in the pages of Wolfe's report. This should give hope --- not to mention practical advice --- to communities and economic development practitioners who are NOT in Canada's largest cities. These communities may appear to have a natural advantage born primarily of size and the ability to capture a significant share of attention from senior levels of government. That's the one hand... for cities a bit further down the pecking order, there's always the other hand....