Build Your Own Talent Magnet
As the world's biggest cities attract more talent, it becomes increasingly difficult for them to remain productive. This is why policymakers should focus on diffusing the development process geographically by embracing a broader and deeper process for nurturing innovation ecosystems.
WASHINGTON, DC – Around the world, the creation of good new jobs is increasingly concentrated in some of the largest cities. Innovative people want to work and live in close proximity to one another. This process of talent agglomeration has accelerated in recent decades and shows no signs of abating. It has also produced some increasingly glaring adverse side effects: worsening congestion (of roads, schools, and social services) in megacities; economic segregation as lower-income people are pushed out of big cities by rising housing costs; and potentially deeper social polarization as people elsewhere feel excluded from the best opportunities.
One response to the urban boom has been to introduce congestion pricing. Urban tolls that vary with traffic levels are already in use in places like London, Singapore, and Stockholm. New York City will introduce a version for the busiest part of Manhattan in 2021, Seattle is watching closely, and Northern Virginia is already implementing on major arteries. It can cost up to $25 to take Interstate 66 inbound to Washington, DC, during rush hour (it’s free off-peak). However, congestion pricing raises the cost of living and further reduces middle-class families’ access to places with the best opportunities.
An alternative approach is to focus on building innovation ecosystems that are not necessarily in the largest cities. Some of my colleagues at MIT run a Regional Entrepreneurship Acceleration Program (REAP), which helps local leaders construct viable coalitions, including universities, government, the existing private sector, actual entrepreneurs, and venture capital. This approach, pioneered by Fiona Murray and Phil Budden, has proved to have great appeal around the world.
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