The city as an incubator for innovation
Entrepreneurial cities are open to innovation
Entrepreneurial culture is a basic prerequisite for innovation and economic growth. The success and the implementation of innovative ideas does not only demand the combination of necessary know-how – the accumulation of universities and research institutes – and a venture capital, but also an innovation-friendly matrix, in other words a place for unconventional or even outlandish ideas. What characterizes entrepreneurial culture is its huge openness to dealing with innovation and its strong orientation towards facing and upcoming obstacles. To be crucibles of innovation cities need opportunities for education in order to guarantee leadership and technical skills. Moreover, they also need a well-developed infrastructure providing high quality of life. According to CITIE, City Initiatives for Technology, Innovation and Entrepreneurship, cities do not only need a certain openness towards new ideas and a good infrastructure for being incubators of innovation, what they especially need is a pro-innovative city hall leadership.
The relation between innovation and policy-making
The strong reciprocal relation between innovation and policy-making is important for the development of innovation-friendly environments. To enable the growth of innovative entrepreneurship and start-up businesses, cities need to open their policy toward new ideas and unconventional solutions. Nevertheless, traditional policy-making in city halls is characterized by complex bureaucracy and inertia, which hampers implementing new and innovative ideas. However, not only does inert bureaucracy often prevent the development of innovative entrepreneurship, it is also the cities’ scepticism about unproven ideas that creates barriers to new players entering the market. Opening policy-processes to entrepreneurial culture enables the development of innovative entrepreneurship. Moreover, also the cities’ government profits from new approaches. According to an article on Accenture.com, a start-up ecosystem is important for economic growth since innovative businesses enrich the local government with new solutions to complex problems.
What makes cities innovation-friendly?
The same article represents strategies how cities can encourage economic growth by integrating the interests of technology-oriented businesses into local policy-making.
- Openness: An important factor for innovation is being open to new ideas and unconventional approaches. To attract entrepreneurs the city has to regulate the market in a way that enables start-ups to enter with new solutions. The city also has to promote itself as an innovation hub and communicate its entrepreneurial culture. Furthermore, it is important to make procurement accessible to small and innovative businesses.
- Infrastructure: Besides an entrepreneurial culture, a well-developed infrastructure is crucial for attracting entrepreneurship. In order to create opportunities for high-growth companies space should be used efficiently. Moreover, the city needs to facilitate physical and digital connectivity between various stakeholders.
- Leadership: The city is its own leader concerning innovation strategies. Therefore, the municipality has to guarantee its internal capability required for supporting innovation. Using digital channels, the city can foster high-quality engagement with citizens. Furthermore, innovation-friendly cities use data to optimize services and provide the raw material for innovation.