What makes a city innovative? - Business Works
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What makes a city innovative?

Lizzie Crowley of The Work Foundation C ities outside of London and the South East are at risk of being left behind by the economic recovery unless the government adopts a less centralised growth and innovation policy. This is according to a report (Streets Ahead: what makes a city innovative?) just published by The Work Foundation. With the economic development of cities crucial to our recovery, the report calls on the government to boost funding and autonomy to Local Enterprise Partnerships (LEPs), so that many cities in the North and Midlands can fulfil their potential.

"We know that high-performing, competitive cities, such as London and cities in the South East like Guildford and Cambridge, are more successful," said Lizzie Crowley, report author. "This is because their economies have established strong networks between the public and private sector - what we call an 'innovation ecosystem'. In these cities, businesses and public institutions, such as universities, regularly work together collectively to drive growth and job creation. This helps them attract world-class businesses and nurture home-grown entrepreneurs."

The research argues that current innovation policy needs to reflect the localism agenda and cities must be able to tailor policy to fit their unique challenges. The strength of business, technology and high-tech manufacturing services varies from city to city and many face a tough economic landscape, worsened by public sector spending pressures and the fragile state of the national economy.

"We need a place-based innovation policy which recognises that not all cities are the same," continues Lizzie. "Economies, such as Bristol, are rooted in the knowledge-intensive services of software and design so they need a very a different set of policy responses compared to cities like Preston and Derby, which have a strong high-tech manufacturing base."

"The Chancellor seems to think that many cities outside London are still stuck in the 1980s and can only be turned around with outdated policies like Enterprise Zones. What this one-size-fits-all policy ignores is that our most successful cities, such as Milton Keynes, have economies driven by strong business services. Many cities outside London have a huge amount of economic potential, but they need the freedom to build on their own strengths and to develop a unique appeal to businesses.

The report makes further recommendations for firms and institutions to help facilitate economic recovery. Struggling cities need to create effective 'ecosystems' which will see private sector businesses and public sector organisations work more effectively together, for example through public procurement agreements. Cities also need to look at ways of developing skilled workers if they are to attract and retain flourishing businesses, while universities need to strengthen their links with business. Taking these important steps now will help prevent regional economic disparities in the years to come.

The report, Streets Ahead: what makes a city innovative?, calls on the government to give more power to Local Enterprise Partnerships (LEPs) through an innovation fund, by which cities can co-ordinate inward investment, innovation and business support. A copy and more information can be obtained from: www.theworkfoundation.com

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