Entrepreneurs want to live where the action is – that is, in places full of other young and ingenious people, in the innovation-enabling environment, with effective policies supporting the growth and sustainability of entrepreneurial community. Those people look for the essential elements of a start-up ecosystem, such as mentor networks, business incubators, role models, as well as potential “collision” points, where random encounters may bring new ideas and perspectives.
The term “collision density” has its origins in physics and refers to the rate of interactions among atoms in a physical system. Recently, this term started to be used in the context of entrepreneurship to describe the chances of serendipitous encounter between innovators or entrepreneurs who would normally not meet that may lead to creative collaborations. The more collisions individuals experience, the higher the potential for original partnerships.
The idea of “collision density” is closely related to the notion of a thriving and vibrant city, attractive for entrepreneurs and socially active people. Emerging research shows that “where” entrepreneurs start is as important as “what” they start. Collision density is naturally much higher in cities than in suburban areas due to a concentration of diverse actors in a smaller territory. Innovation friendly cities are impressively good at facilitating collisions between different kinds of thinkers, such as engineers, economists, psychologists, designers, artists, community activists, investors, and entrepreneurs. With easy access to accelerators, investors, fab labs, mentorship programmes, coworking spaces and other critical elements of entrepreneurial ecosystems, combined with high collision density, entrepreneurs are empowered to perform their best.
Determinants of Innovation Ecosystems
Several factors determine the strength of innovation ecosystems in urban environments, and though the list below may not be exhaustive, it covers five major dimensions that influence the innovativeness (and consequently – the prosperity and attractiveness) of a city.
The first four categories provide a picture of what a city must possess in order to develop its innovation ecosystem. The networking element acts as a multiplier of these factors that can increase the number of “collisions” that result in innovation within cities.
Implications For Urban Policy
The importance of networking assets for the growth and sustainability of innovation ecosystems in cities and the significance of startups’ social dimension have the following policy implications for cities: 1) innovation ecosystems need to be understood as a combination of communities, and 2) the focus of policies supporting innovation should be on social dimension rather than geographical area in the city.
Networking assets have a priority over other types of innovation ecosystem elements because they multiply their impact and directly increase collision density. This, however, doesn’t mean to minimize the importance of other innovation determinants. Supporting policies should primarily focus on the development of networking assets that stimulate the formation of communities (e.g. conferences, hackathons), build networks (e.g. meetups, mentorship programmes), or provide platforms for community building, (e.g. coworkings, colivings). Besides, providing various training and seminars that help participants acquire new skills could potentially add new members to the communities. Those policies should not be limited to geographic communities, such as districts or tech parks, but should target social communities.
In recent years, a rising number of talented people and innovative companies are choosing to cluster in amenity-rich cities, close to other firms, research labs, and universities, where they can share ideas and practice open innovation in the physical world. Those clusters are sometimes called “innovation districts”. The notion is still being defined, but Brookings Institution vice-president Bruce Katz claims that, in order to be called “innovation district” a place needs to have three characteristics: 1) a high concentration of players of different sizes in the innovation ecosystem, from big R&D labs to tiny start-ups; 2) the markers of “smart urbanism”, such as mixed-use buildings and walkability; and 3) a frequent colliding of people with a range of talents and expertise. Bruce Katz calls it “choreography of collisions” – the interplay of designed spaces that allow constant interaction, and claims that it can be observed in Eindhoven in Holland, around the Cambridge Innovation Center, or in Cortex in St. Louis.
Innovation districts are emerging in many cities around the United States, including Atlanta, Detroit, Philadelphia, Boston, Brooklyn, Chicago, Portland, San Francisco and Seattle. Globally, Barcelona, Berlin, London, Montreal, Toronto, Seoul, and Stockholm contain great examples of evolving districts.
Innovation districts are still an early trend that has yet to get a systematic analysis because of its multi-dimensional nature, but it undoubtedly has a unique potential to spur efficient and sustainable economic development.
Top Tech & Entrepreneurial Cities
A report called the CITIE Framework, the result of a collaboration between Accenture, Nesta, and Catapult, attempts to find answer to the question of how cities can truly embrace technology to provide better public services and support innovation and entrepreneurship.
The report compares 40 cities, assessing their openness to new ideas, the infrastructure for high growth businesses, and the innovativeness in their own operations. Accenture, Nesta and Catapult identified nine axes of tech development that might be beneficial for cities, including cities as “connectors”, “investors”, “hosts”, “customers”, and “regulators”. Currently, New York City, London, Helsinki, Barcelona, and Amsterdam score best across the nine metrics.
New York City prioritised innovation and entrepreneurship more than other comparable cities, and has provided support for local start-ups across a wide range of activities from funding to community building. New York City’s one area of relative weakness is that it is struggling to find the best way to accommodate the new sharing economy business models such as the one of Airbnb.
London has proven its reputation as an open and global city, as well as a customer of new ideas. An energetic advocate for the local tech sector, London benefits from a flexible approach to regulating new businesses, primarily driven by national government. However, London lacks some of the internal leadership and digital capability that New York has. For instance, it doesn’t have functions like a chief technology or digital officer or an innovation unit.
Helsinki’s third place shows that smaller-scale cities are equally capable of developing the policy promoting entrepreneurship. The city adopts a highly collaborative approach to working with local businesses and makes data (e.g. transport data) openly available to entrepreneurs to develop new service offerings.
Barcelona, like New York, has used the innovation and entrepreneurship agenda to reinvent itself over the last few years. The city is now actively promoting itself as an urban playground for experimentation by entrepreneurs and supports a range of now world-leading conferences, such as the Smart City Expo World Congress and Mobile World Congress, giving local innovators opportunities to display their solutions to a global audience. The area of weakness for Barcelona is its poor adoption of disruptive business models – examples are ban on Uber in Madrid and the fining of Airbnb in Catalonia.
Amsterdam further demonstrates that the medium-sized cities are capable of developing the right policy conditions for innovation and entrepreneurship to flourish. All civil servants are encouraged to become changemakers, and to work alongside the Chief Technology Officer’s team.
At the corporate level, many successful technology giants, including Google, Facebook, Samsung, and Tencent, have plans to create “action” offices that stimulate people to interact and collaborate – in order to spark innovation through collision.
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