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Why some cities thrive as economic engines

Shift to trust

If the US election is about raising and broadening economic growth, then candidates must look at why certain cities thrive as innovators – and then help other cities do the same. One key: civic trust.

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If Hillary Clinton and Donald Trump agree on one thing, it is the need to speed up the US economy. Slow growth is a global issue, too. Yet both candidates give little attention to a major driver of national growth: cities with high innovation and strong social cohesion. A new report from the Brookings Institution might help voters to ask which candidate can better help unlock the potential of all US cities.

The Brookings report looked at the world’s 123 largest metro economies to define their distinct competitive positions. Together, these cities have 13 percent of the world’s population but produce a third of its economic output. Of the 123 cities, 19 have the highest rate of venture capital investment per capita. Among their population over 15 years old, more than 4 out of 10 have college degrees. And these cities have produced 16 percent of global patents.

They are, in other words, centers for new ideas, or “knowledge capitals.” As the report stated, “the world is disproportionately reliant on these metros to fuel the innovation engine.”

Here’s the good news for Americans: 17 of the 19 cities are in the United States. They are Atlanta; Austin, Texas; Baltimore; Boston; Chicago; Dallas; Denver; Hartford, Conn.; Houston; Minneapolis; Philadelphia; Portland, Ore.; San Diego; San Francisco; San Jose, Calif.; Seattle; and Washington, D.C. The two non-US cities are Stockholm and Zurich, Switzerland.

What can other cities learn from these “knowledge capitals”? A few common threads are a high level of university research, good governance and infrastructure, and strong connectivity between many levels of society. Rather than simply chase for outside investors to boost the local economy, these cities have learned to grow within. They have expanded their strongest capabilities and better employed their particular assets. This can include converting abandoned industrial buildings into places for tech start-ups and artists. Or making sure innovative research is diffused into the metropolitan area, including poorer neighborhoods.

One key is a high level of citizen engagement. In a study sponsored by the National Conference on Citizenship, researchers looked at American cities with similar economic circumstances to find out why some recovered better after the 2008-09 recession than others. Those cities with high social cohesion regained jobs at a 20 percent higher rate.

Social cohesion, also called social capital, is measured by many factors, such as a high number of nonprofits and a high rate of volunteering. In work by Harvard researcher Robert Putnam, social capital in the civic life of a community was a better predictor of student success than many of the usual inputs in education, such as money, parental income, or class size.

In the current issue of Stanford Social Innovation Review, urban specialists Myung Lee and Peter Levine make a case for increasing the number of community volunteers in local groups while also helping such groups better partner with local government.

“Civic relationships require certain essential attributes, including loyalty, trust, and hope. In the United States, these attributes have become less and less prevalent,” they write. They note that the proportion of people who follow local news has declined while institutions such as Congress are more polarized. But they add: “[I]t is not too late to reverse that trend. By connecting with their fellow citizens, Americans can rebuild the sense of trust that helps create strong communities.”

More than half of humanity now lives in cities. If America’s election can focus on how cities might become better innovators and how their citizens can be more engaged as volunteers, it could help the world create many more thriving cities – the very engine of economic growth the world seeks.

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