What makes a city an ideal host for a company? GE’s move last year to Boston from the Connecticut suburbs and Amazon’s HQ2 contest to host a second headquarters – now winnowed down to 20 cities — puts a spotlight on how cities are remaking themselves to “win” companies and organizations. The corporate moves also show how intensely cities and their suburbs compete with each other.
Traditional hosting factors typically include access to an educated workforce, defanged unions, convenient transportation, favorable taxes, affordable real estate, first rate infrastructure, good schools and high end culture, sports, entertainment and restaurants. One factor that often gets overlooked is local synergy.
Nearby universities with dedicated research programs, foundations and a core of similarly-minded companies are essential components for supporting the modern company– much like Auto suppliers supported Detroit’s big three in the industrial era. That’s the argument of The Brookings Institute’s Bruce Katz and Jeremy Nowak in The New Localism,: How Cities Can Thrive in the Age of Populism.
Pittsburgh, Louisville and Indianapolis are just a few of the mainstream American cities that have come back from near death to create dynamic new economies based on their under-utilized infrastructures and state-of-the-art specialties such as robotics, fintech, virtual reality and medical technologies. Other cities are similarly positioned to remake themselves.
According to Katz and Nowak, the key is take a hard look at a city’s’ “inventory” –from lakes and rivers to old factory buildings and communication networks — and work in partnership with local decision-makers to accentuate local strengths, raise funds, and minimize hard core institutional shareholders that may be holding back a city’s progress. And it is all about the city and/or regional groups. The Feds have almost nothing to do with “The New Localism.”
Great companies can rise in any climate; they don’t need to be based in Silicon Valley. Revolution’s Rise of the Rest fund and contest from Steve Case, Ted Leonsis, JD Vance and co. shows that new entrepreneurs can come out of any market. (In fact, Revolution’s Playbook is an excellent survey that makes many of the same points as Katz and Nowak).
But to keep businesses in town, or attract new ones, cities need to refocus on their “soft power” and create a supply chain system that not only provides their moving parts, but all the “place building” factors of the modern economy.