Tuesday, April 6th, 2010

Carol Coletta: Innovative Cities

[ CEOs for Cities is a really fantastic organization you should get to know if you don’t already. Their work on the Talent Dividend and more is putting matters critical to future urban success on the agenda of national and international of urban leaders and advocates. Their president, Carol Coletta, kindly allowed me to share a portion of one of her recent speeches with you – Aaron. ]

CEOs for Cities is a U.S. network of urban leaders – mayors, corporate CEOs, foundation officials, university presidents, and business and civic leaders – who are building and sustaining what we call “next generation cities.” Our research is focused on uncovering new insights on what makes cities successful. But we don’t stop there. We spend a great deal of effort framing our findings in ways that help our partners build local constituencies to move from insight to action.

City Dividends

Let me give you a quick example of a recent piece of work that can illustrate four larger lessons about Innovative Cities.

We looked for ways in which cities could make small improvements in performance that would yield big financial gains. And we found three: the Talent Dividend, the Green Dividend, and the Opportunity Dividend. The Talent Dividend was a one percentage point increase in college degree attainment. The Green Dividend was a one mile per day reduction in VMT. And Opportunity Dividend was a one percentage point decrease in poverty. Together, we called these the “City Dividends.”

It turns out if we could make these small improvements in performance in each of the top 51 metro areas in the U.S. – the metro areas with a million or more people – it will yield an annual dividend of $166 billion every single year. The yield comes from $124 billion in additional personal income, $29 billion in money not spent on cars and gas that would then remain in local economies, and $13 billion saved on current government support payments to people in poverty.

As we toured 105 cities last year, we were able to show each metro area what their own local City Dividends amounted to. And in all cases, they were substantial. In Chicago, achieving the City Dividends – those relatively small improvements in performance in three key areas – is worth $7.2 billion. In Dallas, Texas, it’s worth $4.6 billion. In San Jose, home to Silicon Valley, it’s worth $1.4 billion.

In fact, in most communities, the Talent Dividend alone was worth more than the payroll of the largest private employer in the metro area.

Think about that. In the midst of this economy, the prospect of adding personal income equal to or greater than the payroll of your largest employer is quite a carrot.

Lesson One: Take Action, Don’t Just Talk

You might think, based on the power of the numbers and the relatively small improvements in performance required, we would have people clamoring to be first.

But that’s not the case. Not even close. In fact, the first question we were asked in almost every community was: “Who else has done this?” And the second question was, “What are the best practices?” Those, of course, were ridiculous questions in the face of a brand new idea. But this is what you get when you introduce a new idea.

In this world, there are a very few leaders and a whole lot of followers. And that is my first insight about innovative cities. The vast majority of us want to talk the innovation talk. We just don’t want to walk the innovation walk. Because innovation requires risk. It requires daring. It requires having enough confidence to invent your own best practices.

Gary Hamel is one of the great innovation experts, and I’ve had a number of opportunities to interview him. He told me that anything that is identified as a best practice probably isn’t, because it has been copied too frequently to be “best.” The best practices, he said, are at the leading edge of practice, not yet widely known or distributed.

That’s a good thing to keep in mind about innovative cities.

Lesson Two: Ask Better Questions

Let me use our City Dividends work to illustrate another lesson of innovation. Take the biggest dividend, the Talent Dividend. It can be tough to measure talent directly, so we use its proxy: college degree attainment. And we can associate college degree attainment with 58 percent of any city’s success as measured by per capita income. But we also know that when it comes to identifying talent and its potential, college degree attainment is a convenience at best.

But most people sadly assume that when we talk about “talent” we are talking about a special class of people. But I believe that all human beings have some kind of talent. They are just not all able to develop their talent and put it to work.

Now imagine what our municipal response would be if we were asked to build a system to develop all of the talent in our cities to its fullest and put all of our talent to work. Does anyone believe that our talent development would begin and end with schools? Or at age 22?

When you change the question, you get a whole different set of possibilities. And that is my second observation about innovative cities. We have to ask better and more imaginative questions to produce innovation.

Last week, I spent two days with people from across the US searching for ways to re-start the economies of shrinking cities and to reduce poverty. I was repeatedly struck by the limited nature of the solutions, in large part because of the limited nature of the questions.

I’ll give you an example: At one of these meetings, a number of people were calling for ways to reduce the debt burden American students incur when they attend college. As someone who graduated with no debt, it is astonishing to me that students today graduate with debt of $60,000, $70,000, or $100,000. But when I suggested to the group that instead of subsidizing debt, perhaps we should reduce the need for debt by redesigning college to lower its cost and therefore its price, the suggestion went unnoticed, unacknowledged. It was simply outside the solution set they had considered before. I was asking a different question, but no one was ready to hear it. And that is, unfortunately, what happens with a lot of would-be innovations.

Lesson Three: Make Fundamental Change

A third observation about innovation comes from our work on the Green Dividend. It is fashionable in U.S. cities to pretend that sustainability can be achieved with a few add-ons — a few green buildings, a few hybrid cars, a green roof here and there. But anyone who has looked at the challenge knows that the only way we can ever achieve serious reductions in carbon emissions will require, among other things, changing what I call the basic blocking and tackling of city making – how we use land and how we provide for transportation.

But no one really wants to change the basics of what they are doing today. Change is contrary to human nature. So we comfort ourselves that we can get what we want with add on’s. Add on’s require much less pain.

When we explain to urban leaders that they can achieve a substantial Green Dividend and put more money into their local economies by reducing driving by just one mile per day, the reaction too frequently is, “We can’t do that.” Really? Why not? Because we would have to change the way we do business around here. And nobody wants to do that.

So I suggest to you that while innovation often requires a change in fundamentals, the resistance to changing the fundamentals can be formidable.

Lesson Four: Span the Silos

A fourth observation about innovation is this: Innovation lies at the intersection of single issues and specialized organizations. We see this in our work at CEOs for Cities. CEOs for Cities was actually founded as a cross-sector organization, so working across specialists is in our DNA. It has spilled over into the way we tackle issues.

I talked earlier about our work on increasing Talent. Talent, in all its fullest, is not just about schools. It’s not just about early childhood education. It’s not just about workforce development. It’s also about entrepreneurship, volunteer opportunities, libraries, parenting, urban design, even the culture of a place – do we believe everyone is differently talented and all talent ought to be developed and put to work.

But we don’t think about these things as a system. These specialists don’t talk to each other. There is no sense of what each of these specialties is supposed to produce and how together their results add up to an overall Talent goal for a community.

It’s sort of like the U.S. health care system (and I use that word “system” loosely). We have great health care specialists but our overall health is on the decline. Three big reasons for that is that food, exercise and urban design are not considered to be our health system. We’re not including some of the biggest determinants of health in the health care system.

It’s been my experience that you have to be very determined to force this conversation. It certainly doesn’t happen naturally. Quick example. We know from our research that one of the most straightforward things you can do to reduce poverty rates is to make sure poor people don’t live in neighborhoods of concentrated poverty. If you’re poor, where you live matters. Why? Because if you’re poor and you live near people with higher incomes, you have much better access to opportunity in the form of jobs, education and networks.

But how many times are the planners and developers in the room when we talk about poverty? Yet, it is very clear that it is at the intersection of poverty and place that one of the solutions to poverty lies.

We have to ask more imaginative questions that span silos. We recognize that there are no best practices yet for the answers we will come up with. So we are attempting to orchestrate the development of vision and knowledge of next steps among constituents who deepen their belief as part of the process, thereby preparing to overcome resistance.

Adapted from a speech at the Global Forum on Innovative Cities in Curitiba, Brazil on March 10, 2010.

Carol Coletta is President of CEOs for Cities, a network of urban leaders dedicated to building and sustaining the next generation of great American cities. Follow the CEOs for Cities blog at www.ceosforcities.org/blog.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

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Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

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