Dear 2015: The Future of Competitive Cities Lies Within Entrepreneurship

By Jim Clifton

Jim Clifton has served as CEO of Gallup, a global leader in consulting and public opinion research and analytics, since 1988. Under his leadership, Gallup has expanded from a predominantly U.S.-based company to a worldwide organization with 30 offices in 20 countries and regions.

Oct 6, 2015 | Smart Cities | 0 comments

This blog post is a response to the Dear 2015 group blogging event prompt:

The year is 2050. Write a letter to the people of 2015 describing what your city is like, and give them advice on the next 35 years.

For more responses, see the Dear 2015 Event Page.

Demographic trends show that by 2050, a majority of the world’s population will be concentrated in cities. This emerging trend means city leaders are going to have to start creating new strategies for their economic ecosystems — and fast.

At Gallup, our data tells us that for cities to meet the growing economic needs of their rapidly expanding populations, local leaders have to focus now more than ever on using behavioral economics to create a culture of entrepreneurship.

The entrepreneurship story in the United States presents a great case study.

As we’re seeing in the U.S., local leadership is far more important than national leadership when it comes to creating economic growth and good jobs. Forget seeking answers from Washington — look instead to cities.

This is largely because cities, like companies, exhibit wide variation in economic outcomes. There are examples of this variation all around the country. Austin and Albany are both capital cities in big American states. Neither city is located by a port or a natural tourist attraction with beaches or mountains. They’re pretty much alike, except that economically speaking, Austin wins big and Albany loses big. One city is a drain on America, and the other continues to save it. Sioux Falls is booming, while Sioux City is not.

Think how different Detroit’s outcomes are from San Francisco’s. Detroit went from being one of the richest cities in the world to being one of the most spectacular failures. One could even make the argument that citizens in the San Francisco area saved the republic and national job creation by leading the tech-entrepreneurship boom.

The difference is that cities such as Austin, Sioux Falls and San Francisco have deeply caring and highly engaged business, political and philanthropic leaders. Those leaders understand how to build a thriving, growing economy — one that welcomes business and entrepreneurship. Albany, Sioux City, and Detroit have the opposite: leaders with principles, policies, values, and beliefs that discourage business and entrepreneurship, if not outright scare them away.

The good news is, strong leadership teams are already in place within cities. A natural order is already present in the government and local business and philanthropic entities. Most cities have strong, caring leaders working on numerous committees and initiatives to fuel their local economic growth and to create good jobs. Those leaders should attract innovators, yes, but they’ll fail if they don’t identify and develop entrepreneurs as well. Simply put, local leaders have to find out who in their town is a high-potential, blue-chip entrepreneur with the God-given talent to build a big, booming business.

A big part of this effort is getting local businesses involved as well as aligning the strategies and will of all the great local organizations. To find and develop blue-chip entrepreneurs, cities needs all institutions and organizations involved.

Ultimately, the war for jobs and sudden economic growth will be fought city by city around the world — San Francisco vs. Seoul, Brooklyn vs. Berlin, Cleveland vs. Cologne. Each city needs its own highly individualized plan because each city has its own unique entrepreneurial talent — and each must find it, maximize it, and retain it. Early identification of rare entrepreneurial talent will be the most significant turning point in recent human history. And this talent is out there today, undiscovered.

There are nearly 30 million students in U.S. middle and high schools right now. Imagine the tens of thousands of future blue-chip entrepreneurs in fifth through 12th grade, more in college, and more adult potential business builders out there. City leaders should find them all and make their entrepreneurial growth as systematic and intentional as intellectual and athletic growth are. Great business builders are like great scientists or great quarterbacks — they will respond and accelerate with high-quality attention. Furthermore, without it, their potential is at risk of being underdeveloped, or worse, never developed at all.

The potential of these individuals is unlimited in terms of the economic fortunes they can and will bring to your city. As off-track as our American future appears today, a sudden spectacular turnaround is 100% doable if we change our leadership’s thinking and strategies.

So as we look the horizon over the next 50 years, the playbook has to change. City leaders must place entrepreneurship at the heart of their economic and policy agenda. The old ways just won’t work.

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