The New Localism: Think Like A System, Act Like an Entrepreneur

Bruce Katz, Royal Society for the encouragement of Arts · March 29, 2018


In February 2017, I visited London for an Inclusive Growth Forum sponsored by the Rowntree Foundation and the Royal Society for the Arts. I had just started writing a book, The New Localism, with Jeremy Nowak to chronicle the structural shift in the way we solve problems in the 21st century: bottom-up rather than top down (led by cities), multi-sectoral rather than exclusively government (driven by networks) and interdisciplinary rather than specialized (drawing from diverse expertise and experiences).

Our aim was to show the evolution of cities from being the indisputable engines of national economies and centers of global trade and investment to being the vanguard of pragmatic and innovative action in the world around some of our toughest economic, social and environmental challenges.  Our intention was to position New Localism in sharp contrast to the rise of angry populism (Trump in the U.S., Brexit in the U.K.) as a means for affirmatively designing and delivering effective solutions rather than cynically exploiting grievances.

At a dinner at the RSA, Matthew Taylor offered some framing advice for the forum: “Cities must think like a system and act like an entrepreneur.”  This sharp insight stuck with Jeremy and myself as we began to research new models of growth, governance and finance that were emerging in cities like Pittsburgh, Indianapolis and Copenhagen.

The Pittsburgh story aptly reflects Taylor’s guidance.  In the aftermath of the collapse of the steel industry in the late 1970’s, Pittsburgh’s network of public, private, and philanthropic institutions – and its globally significant universities, Carnegie Mellon and the University of Pittsburgh – initiated a multi-decade process of recovery and renewal.  These institutions willed Pittsburgh to once again be at the forefront of making things that are complex, intricate, and multidimensional.  They created academic centers of excellence as well as intermediary organizations to commercialize research and sharpen the ties between universities, research institutions, mature companies, start-ups and scale-ups, investors, business incubators, community colleges and other providers of skills training.

The result: Pittsburgh is now a virtual playground of innovation with real competitive advantages in next generation technologies like robotics, autonomous vehicles, machine learning, artificial intelligence and genomics.  Leading technology firms like Google, Uber and Amazon are flocking to Pittsburgh to be near the “secret sauce” of advanced research, talented people and hungry entrepreneurs, all concentrated and co-located in vibrant, authentic urban core.

The Pittsburgh story is exemplary of a new growth model that is increasingly being practiced by U.S. and global cities. It reflects a change in how many places think about economic growth, from a disproportionate concern with subsidizing consumption and tourism to a new focus on accumulating and leveraging distinctive productive and innovative assets.

The Pittsburgh story fundamentally reflects Taylor’s advice.  “Thinking like a system” enabled Pittsburgh leaders to take a long and broad view of the regional economy, including identifying and cultivating distinctive innovative assets and core regional competencies; investing in education, workforce development, and talent attraction; and creating quality places by maximizing historical downtowns, distinctive neighborhoods, and, in Pittsburgh’s case, a confluence of rivers and a unique topography.

“Acting like an entrepreneur” enabled Pittsburgh’s leaders to make sizable, strategic bets on next generation technologies that were, at the time, untested, unproven and little understood.  Like individual entrepreneurs, they showed a penchant for tenacity, passion, flexibility and the ability to tolerate risk.  They were structured enough to set a strong, stable institutional foundation for innovation and agile enough to move quickly to leverage market and demographic dynamics.  They also exhibited a culture of “positive reinforcement,” celebrating individual and collective wins and striving to build an ecosystem rather than an ego-system.

Both sides of Taylor’s advice are crucial: without a system view, cities pursue a reckless course to be the next Silicon Valley; without the spirit of an entrepreneur, even cities with a solid economic foundation can be left behind in the modern economy.

As the U.K. imagines a future in the aftermath of Brexit, the Pittsburgh story offers a roadmap for rejuvenating great Victorian cities like Birmingham, Liverpool, Manchester and Sheffield.  National policies and resources obviously matter to set the platform for innovative and inclusive growth.  But Pittsburgh demonstrates that local organized leadership can elevate the distinctive assets of a place in ways that transcend the confines of the past, building linkages throughout the national and global economy.  It represents the triumph of the public, private, and civic sectors working consistently in tandem, of communities recognizing and leveraging their own special assets, and of places perfecting a culture of collaborative action.

Pittsburgh, in short, reflects the new, networked urban order that will define the 21st century as much as large, compartmentalized central governments defined the 20th.

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