What Happened?
Los Angeles Mayor Antonio Villaraigosa created a “Mayor’s Council on Innovation and Industry,” which is intended to drive innovation in Greater Los Angeles. The move was widely considered a challenge to the overwhelming draw of Silicon Valley.
Who Cares?
As Gov1 covered in May, recent studies and reports have demonstrated that innovation is key to a city’s economic success. Specifically, a city’s “distinctiveness”—its people, connections, infrastructure, capital, etc.—can drive success on many social and economic levels; as a result, cities like Los Angeles are seeking to leverage their uniqueness and capitalize on growth opportunities.
LA’s Challenge
PricewaterhouseCoopers recently ranked Los Angeles sixth in the U.S. for intellectual capital and innovation, and second for work/life cost; however, most don’t think of the region as an entrepreneurial juggernaut. Drawing national and worldwide attention to the thriving innovation economy in L.A. has been on ongoing challenge.
The Solution, Model
The Los Angeles Mayor’s Council on Innovation and Industry, clumsily known as “LAMCII,” will be developing actionable plans to facilitate growth in the region. Among the topics currently being deliberated in subcommittee meetings are:
- The Story: Developing a better narrative to promote LA’s entrepreneurial community
- Networking: Improving networking across geographically-dispersed clusters companies
- Facilitating: Determining actions the government can take to facilitate innovation and growth in Los Angeles
- Analysis: Comparing successes and failures in spurring innovation in other cities
- Education: Identifying ways to better leverage the city’s educational resources
- Capital: Helping Los Angeles attract more growth capital
Composition
The council, er, LAMCII (we’ll never get used to that), is comprised of 25 members, from a wide variety of industries. Established media like Fox Networks are involved, as are local startups, VCs, Internet companies, and advisory firms. A full list of LAMCII members was included in the mayor’s press release.
Other Approaches
The approach in Los Angeles, largely considered a “committee” approach, contrasts with other models deployed around the country, some of which were announced recently. We compare some of them below:
Detroit
The same week as Mayor Villaraigosa’s announcement, the city of Detroit launched a “Motor City Innovation Exchange,” which is ostensibly cofounded by Ford Global Technologies, the group that manages the company’s intellectual-property portfolio. The goal in Detroit is to build a marketplace for local technology, so the exchange will be more of a “showroom” that is open to the public. Ford is working with TechStop Detroit, which is a local hacker/incubator space. Several partners, such as Wayne State University’s business incubator TechTown, and Detroit-based non-profit AutoHarvest, will provide support to local entrepreneurs. So, unlike the committee-based strategic approach in Los Angeles, the Detroit model is a more grassroots, space-based, location-specific service model to encourage, support, and market local entrepreneurs and technologies.
Boston
Closer to Detroit’s model is Boston’s Innovation District, an experimental and regional approach, in which specific geographic boundaries identify a cluster of innovation supported by zoning laws and a vision for a walkable, technology-centric magnet. Modeled on Barcelona’s innovation district, and dubbed “Geekville” by the Boston Globe, the classic “cluster” strategy has sometimes been criticized as too broad, too vague, and too big. But the potential is certainly there: The district comprises 1,000 acres of Boston’s highly desired South Boston waterfront peninsula, now newly connected to the city with the completion of the Big Dig. Some of the city’s top restaurants are nearby, events are being held on a regular basis, and dozens of technology companies have already relocated to the district.
Research Triangle
The original U.S. cluster, as first coined by Harvard’s Michael Porter, is Research Triangle in North Carolina, which houses more than 170 global companies, and is strategically positioned between Duke, the University of North Carolina, and North Carolina State. Started in the 1950s, the project was the brainchild of business leaders who sought to leverage the region’s research universities to attract modern industry. However, unlike the Boston model, the endeavor was entirely private, eschewing government-sponsored action and instead leveraging private developers. Professor Porter published an excellent analysis of the dynamics contributing to Research Triangle’s success.
Lessons
Several studies have been conducted on regional centers of innovation, or clusters. These “holistic entrepreneurship ecosystems” are in place in Boston, Barcelona, London and Buenos Aires; even Mayor Bloomberg recently jumped onboard.
One such report was published in Science Progress back in 2009. According to that analysis, there are several key factors that help determine the success of regional innovation centers. Those include:
- Know Your Comparative Advantages: The regions must have some existing resources (i.e., talent) and the ability to capitalize on that advantage. Boston, for example, has myriad universities. Silicon Valley has a well-connected Web of startups and VCs. Detroit has an established auto industry to leverage. What does your city have?
- Make Sure Capital is in Place: Sources of seed capital and venture money are critical to sustain business incubation within the region; without them, you’ll encounter entrepreneurial flight. But municipalities shouldn’t provide the capital directly. This was recommended by numerous parties (see professor Isenberg’s recommendations, below).
- Ensure Networking: This includes not only entrepreneurial networking for recruiting and development purposes, but “policy networking” across the ecosystem, from universities and established companies, to startups and government agencies.
- Develop Space: This includes incubation space, research space, housing, transportation facilities, restaurants, coffee shops, and any additional infrastructure necessary to house an entrepreneurial ecosystem.
Professor Daniel Isenberg at Babson College also crafted an excellent article in Harvard Business Review that outlined additional recommendations for municipalities considering technology clusters:
- Develop a Vision: A coherent message needs to be delivered to all stakeholders, highlighting the multiple benefits of an entrepreneurial ecosystem.
- Facilitate, Don’t Control: According to professor Isenberg, Boston had no detailed plan, budget, organizational structure, or team when it launched its Innovation District. That means stakeholders could define for themselves the role they would play. The city was a facilitator, not a controller, and experimentation was considered vital to success.
- Define Principles, Not Clusters: Prioritizing a sector, like “biotech,” is a mistake. So avoid pigeon-holing your efforts, and focus on principles: Innovation, creativity, sustainability, entrepreneurship, inclusiveness. This actually runs counter to recent initiatives to build industry-specific hubs in Detroit and Milwaukee (both focused on agriculture).
- Invest Time, Not Money: Echoing others, professor Isenberg writes that cities should avoid providing direct funding, and should instead help persuade others to invest, either through competitions like MassChallenge, by visiting startups, by hosting monthly mayoral breakfasts, and generally making the initiative a clear priority.
- Draw Talent: Recruiting and cultivating innovators, students, entrepreneurs, and employees is paramount. Invite colleges and universities to run classes in the technology district, support a walkable community, and “make your city an amazing place for the most talented entrepreneurs, innovators, and creative people to come to seek their futures, to live, work and play in.”
More Reading
Myriad links are embedded in the article above, but many studies are also available, including one on the effect of innovation districts, and New York’s best practices review of high-tech clusters, focusing on Buenos Aires.
Harvard University hosts an entire resource center on cluster development, and the Brookings Institute recently published a large (59 page) paper on regional innovation clusters. The Small Business Association has made available development tools regarding clusters, consulting firm McKinsey hosts an interactive map that tracks innovation clusters.