Innovation Neighborhoods: An Inclusive Economic Development Parallel to Innovation Districts

When innovation districts and innovation neighborhoods are thoughtfully aligned, cities can expect more inclusiveness, educational opportunity and socioeconomic impact.

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In innovation neighborhoods, small businesses and tech startups mingle to create a unique sense of place and strong community. (Getty Images)

This is a guest post by David Sandel.

In the Brookings Metropolitan Policy Program report “The Rise of Innovation Districts: A New Geography of Innovation in America,” the authors describe an emerging urban model called “innovation districts.”

As described in the report, “these districts, by our definition, are geographic areas where leading-edge anchor institutions and companies cluster and connect with startups, business incubators and accelerators. They are also physically compact, transit-accessible and technically-wired, and offer mixed-use housing, office and retail.” These innovation districts also tend to be “where underutilized areas (particularly older industrial areas) are being re-imagined and remade.”

Because innovation districts generally appeal to people or organizations familiar with a university or institutional setting, they can be somewhat of an exclusive club utilized by persons of a higher educational or socioeconomic status.

Certainty, having institutionally-oriented innovation districts is of great value. They can create high-value jobs, accelerate the development of new companies, and attract public- and private-sector investment. However, given their cultural and socioeconomic dynamic, institutionally-led innovation districts can only capture a specific portion of a city’s innovation market capacity.

What is important for a city to understand about this dynamic?

For a city to maximize its socioeconomic output in the new economy, the city or region has to engage the greatest depth of its innovation market capacity. Implementing new forms of inclusion are central to achieving greater socioeconomic impact.

This leads us to a new vision for innovation neighborhoods.

Innovation neighborhoods function at the center of community life and are therefore organically inclusive in nature. They are neighborhoods that have a unique sense of place and are capable of attracting a diverse creative community that welcomes all comers, regardless of education level or socioeconomic class. Innovation neighborhoods thrive on talent without focusing on how it arrives.

For an innovation neighborhood to thrive, a deep understanding of the neighborhood – and its sense of place, socioeconomic potential, infrastructure and entrepreneurial ecosystem – is essential. When innovation districts and innovation neighborhoods are thoughtfully aligned, cities can expect more inclusiveness, educational opportunity and socioeconomic impact.

Want to learn more? Last year, NLC released a comprehensive report on innovation districts, highlighting the progress made in Chattanooga, Tennessee, and in this blog post, Chattanooga Mayor Andy Berke tells the story of how his city became a hotbed for entrepreneurship and innovation.

David_Sandel_125x150 About the author: David Sandel is the lead author for the St. Louis chapter in Smart Economy in Smart Cities, the president of Sandel & Associates and the founder of iNeighborhoods.

When It Comes to Innovation, Partnerships Are Key

NLC’s Brooks Rainwater examines federalism in the context of innovation and explains why the Small Business Administration is of critical importance to cities.

(NLC)

(NLC)

In the first installment of this series, we looked at the basics of federalism and why it matters to cities. Part two focused on how affordable housing assistance has changed with the interpretation of federalism, and what that means for cities today, while part three examined federalism in the context of the American educational system. Today we’ll look at how local-federal partnerships support innovation and entrepreneurship.

Cities are laboratories for innovation. It’s no secret that it is in cities where local leaders are continuously seeking out innovative solutions for tough problems. We have seen this exhibited particularly well in the small business and startup space. Local leaders are accelerating the unique ideas that make all cities thrive through the development of innovation districts, business incubators and shared working spaces.

The entrepreneurial ecosystems that have sprung up across the country enable cities to leverage existing business and draw in new companies that help foster creativity and technological breakthroughs in our nation’s urban places.

This type of innovation is exhibited in not only the largest metropolitan regions of the country, but also in places like Chattanooga, Tennnessee; Coralville, Iowa; and Kansas City, Missouri. Whether one examines the industry-leading app development in Coralville or the way Chattanooga and Kansas City are leveraging the power of gigabit speed internet as a backbone, these cities show that specialization and nurturing creative home-grown ecosystems works quite well.

In our own recent work on Chattanooga’s innovation district, we found that one of the critical factors for success was clear goals and close coordination between the city, the business community, the university, and the nonprofit sector in order to catalyze success and develop a critical path forward. Utilizing and reimagining the downtown of the city was just one key factor here, with another being the mayoral leadership of Andy Berke tied together with long-standing civic engagement in the community.

The fact that top-selling education apps are coming out of Coralville, Iowa, is not an accident – it took deliberate planning and partnerships. This community is just outside the area referred to as the creative corridor and is thus able to leverage the talent and resources needed to grow. In Kansas City, the Kansas City Startup Village is a great example of an entrepreneurial community that supports the city’s startup ecosystem. With the city’s rollout of Google Fiber tied together with its smart city initiative, there are a number of critical components in place. Thanks to the leadership of Mayor Sly James on these issues and many more, the city is doing the right things to promote entrepreneurialism and grow startup businesses.

This innovation that we observe in cities has a great deal to do with local partnerships. We also need strong partnerships at the state and federal level because they play such an important role in helping innovation and economic development thrive. One key example of this is found in the innovative companies in every corner of the country that are part of the U.S. Small Business Administration’s Growth Accelerator Fund Competition, which helps grow amazing companies nationwide.

History of Federal Funding for Small Businesses

The Small Business Administration (SBA) was established in 1953 by President Dwight D. Eisenhower as an independent agency with the signing of the Small Business Act. Since then, the agency has been responsible for delivering millions of loans, contracts, counseling sessions and other forms of direct assistance to small businesses. Throughout its history, the SBA has at times been somewhat of a pawn in political chess, with levels of support waxing and waning depending on the administration in power.

Most recently, Linda McMahon, co-founder of World Wrestling Entertainment, was confirmed as the SBA administrator. During her Senate confirmation hearing, Administrator McMahon walked back statements regarding folding the SBA into the Commerce Department, saying her priority in the first few months would be disaster relief programs. With the strong role the SBA plays in supporting entrepreneurialism in cities, the hope is that ongoing partnerships can be maintained and grown in the coming years.

Why the SBA Matters to Cities

The SBA matters to cities for a multitude of reasons. Connecting small businesses with the SBA and SBA-approved lenders is a critical role of many local economic development officials. The SBA has recently been supportive of entrepreneurs in cities by encouraging cities to sign on to Startup in a Day, an effort built in partnership between the SBA and the National League of Cities (NLC) to streamline city permitting and licensing procedures.

The SBA also serves a rebuilding role in cities. It has frequently been called on to revitalize cities struck by riots and unrest, from the Long, Hot Summer of 1967 to Los Angeles in 1992 and Baltimore in 2015. While the amount of support the SBA provides to cities is critical for a number of reasons, at the end of the day the economy of the country is reliant on cities. This is why the federal relationship is so important. The SBA has a loan portfolio of $124 billion, and these dollars are directly related to the nation’s growth. The SBA provides important counseling, educational and technical assistance to cities as well.

A Path Forward for Startups & Innovation in Cities

In thinking about a path forward for startups and growing innovation in cities, it is necessary to reiterate the importance of maintaining and strengthening the federal relationship. If instead of growing this support decisions are made to diminish it, the decreased federal funding available to small businesses will ultimately hurt cities and, therefore, national economic growth.

It is necessary to create a strong plan focused on increasing entrepreneurialism in our country. Statistics show entrepreneurialism is nearing a 40-year low and the pace of IPOs has slowed. However, the nation is in a good position to turn that around – according to a new survey from JPMorgan, the leaders of small- and medium-sized businesses are saying they are more enthusiastic about the U.S. economy in 2017. That survey found that 68 percent of respondents were encouraged about the outlook for local economic conditions, representing an 18-point increase from 2016.

Let’s leverage that potential for growth with startups and others in the entrepreneurial community. Innovation will continue to percolate from the ground up – but in order to truly grow this opportunity, cities need a partner in the White House and in statehouses nationwide to unleash economic dynamism and continue innovating.

To learn more about what NLC is doing in this policy arena – and make your voice heard at the federal level – join us at the Congressional City Conference in Washington, D.C., March 11-15.

About the author: Brooks Rainwater is Senior Executive and Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter @BrooksRainwater.

8 Ways Cities Can Prepare for the Future of Work

We know that automation and artificial intelligence will have a great impact on the future of work, play, and life – but we shouldn’t jump to the assumption that this will be a net negative.

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Advocates from the tech world tout a basic income as a way to counteract the economic blow of automation replacing jobs currently occupied by humans. (Getty Images)

This post originally appeared on Business Insider. The post was republished with permission.

Fundamental shifts in society are upending the current nature of work. With automation and artificial intelligence already permeating nearly every sector of the economy, disruption is happening at an accelerated pace.

Our recent presidential election made clear that workforce shifts are felt by a broad swath of the American public. People are looking to elected officials at every level of government for a new response to these changes.

We have to move the policy discussion away from job retraining towards job rethinking.

NLC’s latest report, The Future of Work in Cities, examines the rapid changes occurring in today’s workforce. Here are eight suggestions from that report on how city leaders — the most responsive government leaders — can approach the rapidly shifting future of work.

Rethink education and workforce training programs.

The strength of cities comes from the people that live in them. As cities prepare for the future of work, they must address talent development by collaborating with business leaders, educational institutions, and community-based organizations to ensure education and training programs match workforce needs.

Update policies to reflect the changing composition of the workforce.

Tomorrow’s workforce will be significantly more diverse. Women will continue to make up a larger portion of the workforce, and the racial and ethnic makeup of the workforce will change. The workforce is also getting older, as many elderly workers delay retirement and younger people delay working. These changes shift the fundamental needs of employees and, subsequently, the way employers should respond. Flexibility will be critical.

Support entrepreneurs and startups as a core workforce development strategy.

Innovation is the lifeblood of city economic growth. Local leaders need to create a strong startup culture through low tax and regulatory barriers, and strong regional networks with access to capital that allow startups to scale. As cities continue to lower barriers of entry for small businesses and support local startups, innovation will flourish.

Build equitable business development programs.

Equity is critical to building a strong workforce. Policies that promote equity in areas such as health and education often have positive effects on economic growth. Likewise, policies that address marginalized groups reduce political conflict and strengthen public institutions and social organizations, feeding into a virtuous cycle of growth.

Invest in digital and physical infrastructure that supports the workforce of tomorrow.

Investment in reliable, high-speed internet and expanded broadband services is critical to supporting a competitive workforce. In addition to digital infrastructure, cities must also invest in roads, bridges and transit systems.

In cities, people like to walk, bike, and take public transit, while single occupancy vehicle use continues to decline. This preference, combined with a move toward autonomous vehicles, means that cities will need to rethink investment priorities while considering new uses for car-oriented infrastructure like parking garages.

Ensure access to paid leave for families.

The United States is one of few developed countries that doesn’t offer some type of guaranteed paid leave for new parents. Yet companies that offer these policies retain more employees and avoid lengthy talent searches. Cities are leading in this space. The San Francisco Board of Supervisors, for example, mandates six weeks of paid parental leave for workers. This long overdue policy benefits everyone, giving parents the opportunity to maintain their careers, helping organizations retain employees, and bringing stability to the city’s workforce and economy.

Consider offering portable benefit systems.

As workers change jobs more frequently and contract work becomes more common, the policy environment around benefits needs to shift. Benefits that once accompanied most employment situations are becoming more elusive, and portable benefits, which are tied to individuals rather than employers, represent one potential solution.

These typically wrap together some form of paid leave, health insurance, worker’s compensation/unemployment, and retirement fund matching. Proposals for this type of system vary.

Some suggest that it should be universal and administered by government or a public/private institution created for such a purpose. Others think it should be administered by non-governmental community-based groups. Either way, portable benefits have the potential to support those who work outside the realm of the traditional nine-to-five economy.

Explore basic income and other broad-based social support systems.

Basic income, which guarantees every citizen a regular, unconditional sum of money, is gaining support in policy conversations. This is intended to serve the same function as a living wage by bringing all individuals up to an economic baseline. In some ways, this proposal resembles existing welfare systems, with the major exception that the benefit goes to everyone, regardless of age, ability, class status, or participation in the workforce.

Advocates from the tech world tout it as a way to counteract the economic blow of automation replacing jobs currently occupied by humans. Other supporters argue that basic income is more streamlined, efficient, and transparent than current social welfare systems. Finally, there are others who argue that a basic income might allow individuals to pursue more creative, enjoyable interests. A full-scale of examination of the cultural and financial implications of basic income will be key to implementing such a system.

We know that automation and artificial intelligence will have a great impact on the future of work, play, and life. However, we shouldn’t jump to the assumption that this will be a net negative.

Despite the evolving nature of the economy, people are still working, the economy is still growing, and indicators show that life has gotten better for the majority of the world’s workers. To stay on that path, these and other such ideas should be higher on the agenda of policymakers. Cities are the place where new ideas and opportunities happen first, so we should prepare for the technological shifts to come and usher in a future that works for everyone.

About the author: Brooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter @BrooksRainwater.

19 Tech Startups That Are Shaping the Future of the Sharing Economy

This is a guest post by Tristan Pollock.

The future of the sharing economy looks a bit like the past. Tristan Pollock explains how the technology we are seeing introduced to our cities is spurring a return to small town values and making our communities more social, localized and connected.

Technologies are shaping the future of the sharing economy in a way that’s enabling a return to small town life – and allowing for stronger connections to our neighbors, for better or for worse. (Credit: andrewgenn/Getty Images)

Right now, there are battles being fought in our cities. Ridesharing services are at war with taxi companies, homesharing apps are fighting to win customers from hotels, and carsharing services are battling for market share with car rental providers. But if we focus only on the negative consequences of these battles, I think we’re missing the bigger picture.

The technology we’re seeing introduced to our cities via sharing economy services is having a greater positive impact than we could have ever expected. It’s making our communities more social, localized and connected. In fact, we’re returning to the days of small town America when we left our doors unlocked, doctors made house calls, and we actually connected with our neighbors.

Here’s how 19 tech startups are changing the way you connect with your neighbors and your community:

You can leave your doors unlocked (and lock them remotely).

1) August and Lockitron are smart lock companies for your home or office. Now you can let your friend in without being home, or let your neighbor in to borrow an electric drill or some sugar.

And if you need to borrow something…

2) Rooster, Peerby and NeighborGoods help you borrow from, or share things with, the people on your block.

Doctors can make home visits again.

3) Heal and Pager bring doctors in your city right to your front door.

Neighbors are talking to each other more than ever.

4) NextDoor is connecting neighbors via a mobile app making it possible to to have more conversations between neighbors now than ever before.

5) VillageDefense is digitizing your neighborhood crime watch. The company was created after founder Sharath Mekala’s Atlanta home was broken into by a burglar. Now, in Atlanta and Detroit, VillageDefense has reduced home burglaries by up to 80 percent by notifying neighbors when a crime has happened nearby.

6) Lyft maintains the motto of ‘your friend with a car’ and aims to make inner city commuting more social. Lyft Line takes that a step further and allows you to simply share your ride with others going the same way.

Local government is listening to your needs (and responding).

7) SeeClickFix allows for seamless reporting of needed city improvements to local government officials.

8) Change.org allows for easy creation of online petition for local issues.

9) Neighborland empowers people to take action on local issues.

You can put your dollars to work locally.

10) StartSomeGood helps local changemakers crowdfund social impact projects.

11) Neighborly is a community investing platform that allows you to search and filter for bond issuances by community, cause, or yield.

12) HandUp helps you donate to homeless people trying to break the cycle in your city.

13) KivaZip allows you to easily support small business owners on your block.

You can share meals with your neighbors.

14) Mealsharing and Feastly bring locals together to share meals with each other or invite travelers to the table.

And that’s just a small sample of the services being created right now. More startups are launching everyday to bring us closer to our neighbors. One key takeaway from these developments is the idea that, even though technology can bring us closer, it’s not a substitute for face-to-face relationships. Online, humans can only build relationships to a certain point – we need to go offline to create deeper bonds with the community around us.

About the Author: Tristan Pollock is the co-founder of Storefront, the marketplace that connects makers, including Kanye West, with retail space. Previously, he co-founded SocialEarth, a social impact media platform acquired by 3BL Media. Tristan has been named to the Forbes “30 Under 30” list, and his street art was featured in a TEDx talk on creative cities. A Minnesota native from a family of makers, Tristan now lives and creates in San Francisco, California. Connect with him at tristanpollock.com.

Stories of the Sharing Economy: Denver

This is a guest post by Denver councilmember Mary Beth Susman. This post is the first installment of a new blog series that examines how the sharing economy is developing in different cities.

Statistics show about 2000 dwellings in Denver listed on various short-term rental websites – a sign that the sharing economy in Denver is booming. (Juli Scalzi/Getty Images)

Exciting things are happening in Denver these days! Our city is growing. Our economy is humming. Millennials are flocking to the region in overwhelming numbers. Denver is constantly appearing on or near the top of some great lists that extol the quality of life in the Mile High City. And have you heard about our little experiment with recreational marijuana?

Denver is also at the forefront of the on-demand economy, commonly known as the sharing economy. Colorado was the first state to legislatively re-regulate ridesharing, thus making their operations legal. Now we are immersed in considering whether to re-regulate homesharing and the short-term rental (STR) market. I say “re-regulate,” because it is currently illegal in Denver to rent a home or apartment in a residential zone for less than 30 days. But the business is booming. Our best statistics show about 2000 dwellings in the city listed on various STR websites.

Early last year, I formed a Sharing Economy Task Force of the Denver City Council charged with studying these innovations and what they might mean to our city. “Sharing” economy can be considered a misnomer, as the industry entrepreneurs rarely “share” in the strictest sense of the word. They charge for the goods or services. It’s also been referred to as Peer to Peer, On-Demand, Collaborative Consumption, The Mesh Economy and other terms, but “sharing economy” has stuck as the most widely understood term.

We started out with many questions. How would ride-sharing and car-sharing affect our established taxi industry? (Dramatically, it turns out.) Should municipal governments step in to place regulations on meal-sharing? (Probably not. How would we enforce?) With much of Denver’s general fund revenues coming from sales tax, how do these untaxed on-demand models that prize access over ownership affect our sales tax revenues? (The jury is still out on this one.) There is a lot to tackle.

The task force has spent the bulk of its time discussing STR’s. Each meeting features presentations from citizens, hosts, guests, city agencies and representatives of the industry (i.e. Airbnb, VRBO, corporate rental companies), in addition to a review of the literature and other cities’ ordinances. Generally, it leads us to more questions. How can Denver promote innovation and creativity without sacrificing the quality of life of our neighborhoods? How can we preserve affordable housing and prevent the gobbling up of diverse housing stock? Are short term rentals helpful to home affordability by giving homeowners extra income to meet a mortgage, or do they diminish the supply when multi-units are converted to short-term rentals instead of long term? What safety measures do we need and how do we verify that hosts are complying? If we regulate STR’s with lessened requirements for inspections, etc. does it have implications for modernizing regulations on the existing hotel and lodging establishment? We’ve even seen the emergence of cannabis-friendly home-sharing. That discussion was a trip!

As we’ve watched other cities pass laws on home-sharing, we’re cognizant of going too far: creating regulations so onerous that home-share hosts simply don’t register, something Portland and San Francisco are experiencing. Meanwhile, it is difficult to enforce our present ordinances against STR’s. A city inspector has to receive a complaint, visit the site, find the renter, ascertain that he/she is a renter and not a nephew or cousin, and then prove they are renting for less than 30 days. It takes weeks/months to do this. How could we ever have a workforce to handle 2000 dwellings? Anyway, we have no way of locating them without specific complaints. To put more perspective on this, we’ve only had nine complaints of an STR ever as of this writing.

We considered adding STR’s to the list of allowable home occupations, but with a requirement to get a permit. We discarded that tack because a) it would be the only home occupation requiring such; and b) since we intended to license for taxing purposes, it would mean several extra steps for the host. We are now proposing to add it as a use-by-right for all residential zones, but still require a business license, thus one step instead of two or three. We also are suggesting that it be limited to hosts’ primary residences to thwart the conversion of affordable units. This last component stymies some providers’ business models, i.e. VRBO (HomeAway) and corporate rental companies, who have objected.

We have taken the proposed regulations to neighborhood groups at each iteration to get their feedback. Their input has provided valuable suggestions which continue to inform our work. The discussions have led to our preliminary framework for regulating short-term rentals in Denver. We hope we have elegant solutions that will preserve our residential neighborhoods; promote innovation; ensure the safety of hosts, guests and neighbors alike; prevent the loss of affordable housing, and encourage registration and compliance by hosts.

We are next exploring the licensing process that would apply lodger’s tax to the home-share enterprise. This is a significant step to level the playing field somewhat for our traditional hotel and lodging industry. The task force heard from our Hotel and Lodging Association who opined that they don’t think the home-share enterprises are a serious threat to their business because it appears to draw a different customer, but their biggest request was that we at least apply the same taxes.

Ironically, traditional hotels themselves are now listing unsold rooms on Airbnb and the like.

We will be going back to the community with the licensing and taxation pieces of the regulations for their consideration. I have particularly liked this back and forth process that gives us both time and multiple viewpoints to consider carefully what we are doing.

About the Author: Mary Beth Susman is a Denver City councilmember who chairs the council committee charged with investigating the sharing economy. She also sits on the sharing economy advisory panel of the National League of Cities.

Cities’ Shifting Perceptions of Collaborative Consumption

This post was co-authored with Nicole DuPuis.

Revisit CitiesSpeak monthly to follow our new Sharing Economy blog series. These upcoming blog entries will further explore the ways in which the sharing economy works in different places with guest posts from city and industry leaders.

 

When people want something, they want it now – and more often than not, this trait is shared by millions of other city dwellers across the globe. We are all in luck, because with the tap of a smartphone there is a car on its way or a room is rented halfway around the world. Data is the key ingredient making this happen and cities make the sharing economy work.

With this ever-changing environment, what will the future hold for the sharing economy and how are cities responding to the current shifts taking place?

The on-demand economy feeds our wants and needs, and is reflective of a fundamental shift in our culture. Early on, the disruptive and abrupt approach many rapidly-growing sharing economy companies took as they entered cities created consternation and concern. Over time, the desires of people and the goals of cities have coalesced and become clearer, and confrontation has moved more toward collaboration.

City leaders want to capitalize on the new opportunities and innovation the sharing economy can bring to cities. This isn’t to say that the challenges have disappeared – there are still some significant issues to address. But our work has shown that city sentiment on the sharing economy is shifting.

Shifting Perceptions of Collaborative Consumption is our newest report on the sharing economy. This is the first national level analysis of local elected officials’ views on this topic, and this data can help further the larger ongoing conversation on how this new economy is affecting cities. We have identified a range of benefits and concerns that cities are experiencing as a result of the shift towards these collaborative models. Additionally, the survey research examines the growth of the sharing economy businesses in cities, whether local governments are supporting this industry, and the regulatory response that has taken place.

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The three key benefits and concerns that are at the top of the list for cities are improved services, increased economic activity, and increased entrepreneurial activity. Cities view improved services as the primary benefit, with 22 percent identifying this as important. The next most vital area is increased economic activity at 20 percent. Entrepreneurial activity rounds out the top three benefits at 16 percent. These numbers are a reflection of the economic activity afoot in cities as a result of collaborative consumption.

When we examined the concerns that cities had with the sharing economy, the primary issue that rose to the fore is public safety, and specifically the lack of comparable insurance and general safety concerns, with 61 percent identifying this as the top priority. The numbers two and three concerns are protection of traditional service providers and industry participants at 10 percent and non-compliance with current standards at 9 percent.

These numbers reflect many conversations we have had with city officials. We have held in-depth interviews with city leaders in a dozen cities and performed a sentiment analysis on large cities throughout America. This research identified and reinforced the notion that there is no one way for cities to approach the sharing economy. One of the beautiful things about urban areas everywhere is the inventiveness and uniqueness of place.

That earlier research identified a clear need for quantitative data. This Survey on the Sharing Economy approaches the data question and allows for a clearer, macro-level understanding of what cities are experiencing and what they hope to see from the sharing economy. There is no doubt that collaborative consumption thrives in cities and brings value to residents. And, of course no city leader wants to stand against the steady drumbeat of progress and innovation. But just as cities make the sharing economy work the sharing economy needs to work with cities.

The growth of the sharing economy has been enormous and quick. The current valuation of just Uber and AirBnB reaches over $50 billion. All of this has taken place startlingly fast. And, over half, or 55 percent, of cities in our sample reported some growth in the sharing economy, and 16% are experiencing rapid growth. The sharing economy is expanding far beyond transportation and short-term rentals, with myriad companies taking on peer-to-peer business models. While ridesharing and homesharing represent just a segment of the sharing economy, these two types of services are top of mind in cities. This is reflected in our numbers, which show that 53 percent of cities reported growth in ridesharing and 46 percent saw growth in homesharing.Sharing Economy Micro Content-02

Cities are more open to ridesharing than homesharing. Sixty-six percent of respondents indicated that their local government is supportive of ridesharing, while only 44 percent indicated support of homesharing. However, when asked whether local governments are supportive of rapid growth in the sharing economy more broadly, nearly 71 percent of city leaders responded that they were.

At the end of the day, sharing economy businesses are flourishing and sentiment is shifting for the simple fact that sharing represents value on the ground now. While challenges persist, the benefits are very real, and the pace of change is ever accelerating as we enter the sharing city of the future together.

About the Authors:

Brooks Rainwater bio photoBrooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter at @BrooksRainwater.

 

Nicole DuPuis bio photoNicole DuPuis is the Senior Associate for Infrastructure in NLC’s Center for City Solutions and Applied Research. Follow Nicole on Twitter at @nicolemdupuis.

How Startups Solve Problems at the Intersection of Urbanization and Climate Change

This is a guest post by Stonly Baptiste.

startups postCould startups be the secret weapon to make cities smarter and combat climate change in the face of ever increasing urbanization? (Getty Images)

When you see the word ‘startups’ in the news, you see headlines like “Meet the Hottest Tech Startups,” “Snapchat Could Become One of the 3 Highest-Valued Startups in the World,” or “Why Startups Want This 28-Year-Old to Really Like Them.” But the most interesting startups may be the ones working on problems that can directly help cities.

The Problem: More People + More Energy Consumption = Climate Change

People are moving to cities at rates never before recorded. The urban population of the world has grown rapidly since 1950, from 746 million to 3.9 billion in 2014. This represents a shift from two out of 10 people to five out of 10 people living in cities. The motivations behind this migration vary, from the search for more employment opportunities and increased earning potential to better health care and improved living standards; social factors like better education opportunities also play a role. Whatever the cause, there is no denying the rapid rate of global urbanization.

So what does this mean in terms of climate change? Energy consumption is the biggest contributing factor to global climate change, and more people means more energy consumption. In fact, 75% of global energy consumption occurs in cities. That consumption is likely to increase as we experience the shift from 54% of the world’s population residing in urban areas in 2014  to 66% by 2050. The environment around us will simply not be able to support this kind of growth and the increased level of energy consumption. Managing climate change seems more and more like a city efficiency challenge.

The Challenge: Redesign Cities

“No challenge – no challenge – poses a greater threat to future generations than climate change.”
– President Barack Obama, State of the Union, Jan 20, 2015

The challenge is to create a fast, widely-adopted, effective and lasting impact on the future sustainability of cities; to redesign cities in response to climate change. Previously, the burden of these issues fell on the government. However, due to the increasing budget constraints of so many of the world’s economies, government can no longer afford to take on all of that responsibility.

The Solution: More Urbantech Startups

Technology has always helped shape urban and suburban environments. “Urbantech” describes the emerging technologies that are being used to solve problems at the intersection of urbanization and climate change, from reducing energy use and greenhouse gas emissions to reducing crime and increasing government efficiency.

Over the last 18 months at Urban.Us, we’ve analyzed hundreds of startups that are working on Urbantech problems. We wanted to understand what problems they are solving as well as their customer focus (consumers, businesses or governments). By creating the Urbantech radar, we were able to visualize companies according to their customers and problems they are trying to solve.

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The visualization reveals some interesting patterns about where founders and investors have chosen to focus – but it also shows where there is open space and opportunity.

The radar also provides strong evidence that the challenge of redesigning cities to positively impact climate change could very well lie in the hands of the consumer, therefore circumventing the government-first approach. By reaching mass consumer adoption, these startups are able to make cities sustainable through channels like the Apple Store, Home Depot and Amazon.

No one can predict what the future of cities will look like – but we can get a glimpse of what’s possible by looking at some of the fastest-growing startups currently reshaping the way people live and work in cities:

  • DASH, a hardware plugin tool that syncs to your mobile phone to turn any car into a smart car, unlocking enhanced performance, cost savings and social driving.
  • OneWheel, a one-wheeled electric skateboard to quickly and easily get you to and from mass transit.
  • Whill, an all-terrain wheelchair that makes hard-to-navigate obstacles like stairs a thing of the past for people with disabilities.
  • Radiator Labs, a radiator cover that converts old cast-iron radiators into precision heating machines with climate control, operational efficiency and safety comparable to any radiator, transforming steam heat into a comfortable and efficient solution.
  • Hammerhead, a handless device that enables cyclists to safely navigate streets.
  • Rachio, a smart sprinkler controller that automatically adjusts your watering schedule based on weather or seasonality to save on water consumption.
  • Zuli, a plug-and-play smart outlet that enables users to control appliances, dim lights, set schedules, and conserve energy from their mobile phones.
  • Lagoon, a smart water sensor that alerts you when there is a leak, tracks usage, and saves money on water bills.

These startups have found a way to impact climate change by leveraging consumers’ need to collect data, save money, and enjoy the user experience. The climate change aspect may not even be a factor for consumer adoption – but through new crowdfunding platforms, distribution channels and government procurement initiatives, these startups could change the future of our cities and the environment.

The Next Step: Local Government as the Coach vs. Quarterback

The way cities work with emerging technologies is entering a new paradigm in which the city is not always the customer but, more often, the regulator and promoter of the best ideas. We are excited to be hosting 100 of the most promising Urbantech startups at this year’s Smart City Startups event – and, thanks to the support and partnership of the National League of Cities, we will introduce local government officials from Tel Aviv, San Francisco, New York, Boston and elsewhere to the innovations these startups offer.

We have all seen the battle between Uber and regulators – and it’s likely that no local government made an attempt to discuss regulating Uber before the battle occurred. We’ve also seen the impact that Rachio is having on water consumption around the country – and in most cities, this shift is still under the radar. Recently, we’ve seen police departments fighting against some of the information shared on Waze.

Our goal is to enhance awareness and increase partnership between local governments and startups working to solve the same problems, so that the best solutions can be promoted and cities can begin to preemptively manage the impact of regulation. Urban.us and NLC are joined by Direct Energy, the Knight Foundation and others aligned with the goal of sharing experiences that cities are having as they work with startups to build new relationships that will forge the future of urbanization and climate change.

stonly_baptiste_headshotAbout the Author: Stonly Baptiste is the Co-Founder of Urban.Us, where he leads investment research, community management and platform development for the fund, which now works with 16 startups around the world solving urban challenges. Additionally, he is co-organizer of Smart City Startups, a multi-day, multi-track event based in Miami that recruits 100 of the the most promising startups from around the world who are working to solve challenges at the intersection of climate change and urbanization. Additional participants include officials focused on innovation and economic development from local governments in Tel Aviv, San Francisco, New York, Boston and more. Investors such as Vast Ventures and Fontinalis Partners, and global companies such as Direct Energy, EDF, and Canary Wharf join to further government efforts to work with startups and promote innovation in cities.

Workforce Development, Jobs Report, and Broadband: This Month in Economic Development

Our monthly roundup of the latest news in economic development filtered through a city-focused lens. This month’s roundup features stories from NLC’s Congressional Cities Conference. Reading something interesting? Share it with @robbins617.

"Photo by Jason Dixson Photography. www.jasondixson.com"President Obama announces his new TechHire initiative, which calls for a partnership between cities, higher education and the private sector to expand access to tech jobs in communities across the country, at NLC’s Congressional City Conference in Washington, D.C. last week. (Jason Dixson Photography)

White House announces TechHire initiative to expand skills training for tech jobs. President Obama addressed NLC’s membership at the Congressional Cities Conference and asked for cities to partner with him on TechHire, a new workforce program designed to train low-skilled workers for well-paying information technology jobs like software development, network administration and cybersecurity. The new initiative will include $100 million in competitive grant funding as well as private sector resources and support for 21 communities selected to participate.

Skills gap: myth or reality? Meanwhile, the ongoing debate continues over whether or not a skills gap actually exists in our country’s workforce. Tom Snyder, President of Ivy Tech Community College, wrote a piece for The Huffington Post about leveraging community colleges for skills training on emerging technologies. New York Times columnist Paul Krugman recently challenged the idea of a skills gap, arguing there’s insufficient evidence to prove a skills gap is holding back employment. However at the local level, where job opportunities are returning but going unfilled, mayors are responding by developing workforce programs to meet the specific hiring needs of area businesses (like in Missoula, Mont., and Heath, Ohio).

The latest employment trends in local government. NLC’s latest Local Jobs Report analysis by Christiana McFarland found slight gains in overall public sector employment, with local government responsible for the majority of those new jobs last month. But this positive news is tempered by the fact that the local government workforce is still smaller today than it was at its peak in 2008. Another local government trend highlighted by the Emerging Local Government Leaders (ELGL) network is the lack of growth in the percentage of chief administrative officers that are women. That number still stands at 13 percent – the same today as it was back in 1984. The thought-provoking ELGL “13 Percent” blog series features personal stories from city employees.

Municipal broadband could be coming to a neighborhood near you. In case you missed it, the Federal Communications Commission (FCC) voted to allow the municipal broadband systems in Chattanooga, Tenn., and Wilson, N.C., to expand outside their existing borders. This is encouraging news for other cities that are considering building their own broadband systems, like Seattle. The decision also affirms NLC’s position that municipal broadband systems can play an important role in supporting local growth and opportunity. More info from the FCC can be found here.

Cities are making the sharing economy work. NLC released a new report, Cities, the Sharing Economy, and What’s Next, at the Congressional Cities Conference. The report provides analysis from interviews with city officials about the impact of the sharing economy (and companies like Uber, Lyft, and Airbnb) on innovation and economic development and how cities are managing safety and implementation considerations. NLC’s Brooks Rainwater explained how this new resource will assist city leaders as they understand, encourage, and regulate the sharing economy in their cities.

For a laugh. Not to start a dog-versus-cat war, but how great would it be if every economic development strategy included plans for a cat café? Meanwhile in Boston, a GoFundMe campaign aiming to raise $300 million to fix the struggling local transit system first started out as a joke but is now receiving national media attention. The campaign is unlikely to reach its goal, but if you donate $50, the fund’s creator will scream your name on the orange line for 45 minutes during rush hour.

Idea of the month: Life experience as college credit. Getting a degree later in life is hard, but Pennsylvania’s community colleges are making it easier by now counting life experience as college credit.

What we’re reading. There were a few solid reports this month on workforce, wages, and jobs. Brookings released a report identifying the advanced industries with the greatest prospects for long-term economic growth (Governing provided a solid overview of the key findings). The Boston Consulting Group found that the top three reasons companies bring manufacturing jobs back to the U.S. are better access to skilled workers, lower shipping costs, and shorter supply chains. Finally, the Economic Policy Institute testified before Congress about government actions needed to create jobs and grow wages. The testimony said that local governments should implement targeted employment programs and also invest in broadband, education, transportation and other infrastructure projects.

(Last month’s roundup is here.)

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About the author: Emily Robbins is the Senior Associate, Finance and Economic Development at NLC. Follow Emily on Twitter: @robbins617.

Expanding on the President’s TechHire Initiative: How Innovation Districts Catalyze Jobs, Creativity & Growth

"Photo by Jason Dixson Photography. www.jasondixson.com"President Barack Obama, seen here speaking at NLC’s Congressional City Conference on Monday, March 9, revealed his new TechHire initiative to expand access to tech jobs in communities across the country. NLC has just released a new research brief on Innovation Districts that explores the President’s ideas in more depth, specifically reinforcing the important intersection where business, education, technology, and city leadership meet.

With President Obama’s announcement at the NLC Congressional Cities Conference of the new TechHire initiative, the White House will make available $100 million in grants to expand the number of Americans in well-paying tech jobs. The program will include city leaders, universities, community colleges, and the private sector with a special focus on underserved population, working together to expand tech jobs. At the same time as TechHire ramps up in the initial 21 cities, it is increasingly apparent that place in the 21st century economy matters more than ever. City leaders know that the tech sector of today is increasingly gravitating away from suburban office parks towards central cities and innovation districts.

Cities incubate creativity and serve as labs for innovative ideas and policies, and the place where this is happening more and more is in Innovation Districts. These districts are creative, energy-laden ecosystems that focus on building partnerships across sectors. Innovation Districts attract entrepreneurs, established companies, and leaders from all walks of life, providing them with the space and the place they need to create unexpected relationships and find transformative solutions.

From established environments, like the Boston Innovation District to the newly developing innovation district in Chattanooga, one of the founding TechHire cities, there is an increasing focus on catalyzing economic growth through “spatial clustering.” These districts share similarities with traditional economic clusters, but differ in key ways. Placemaking is central to innovation districts, and there is a focus on being sited in high-density areas with a cross-section of employees that want to share ideas instead of being cloistered apart from one another. These urban ecosystems foster collaboration and bump and spark interactions between workers that might just create the next big idea.

NLC’s Center for City Solutions and Applied Research (CSAR) has just released a new research brief on Innovation Districts that explores this concept in more depth, specifically reinforcing the important intersection where business, education, technology, and city leadership meet. Further work will be forthcoming in this space, including an in-depth look at the innovation district forming in Chattanooga, as well as work in partnership with other key players. Innovation districts can encourage experimentation and serve as a key strategy for cities as they further urban economic development and pave the way for new job opportunities through initiatives like TechHire.

Brooks Rainwater bio photoAbout the author: Brooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter at @BrooksRainwater.

The Best Lifestyle Might Be the Cheapest, Too

This is a guest post by Scott Adams, the creator of Dilbert. It originally appeared here.

If you were to build a city from scratch, using current technology, what would it cost to live there? I think it would be nearly free if you did it right.

This is a big deal because people aren’t saving enough for retirement, and many folks are underemployed. If the economy can’t generate enough money for everyone to pay for a quality lifestyle today, perhaps we can approach it from the other direction and lower the cost of living.

Consider energy costs. We already know how to build homes that use zero net energy. So that budget line goes to zero if you build a city from scratch. Every roof will be intelligently oriented to the sun, and every energy trick will be used in the construction of the homes. (I will talk about the capital outlay for solar panels and whatnot later.)

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I can imagine a city built around communal farming in which all the food is essentially free. Imagine every home with a greenhouse. All you grow is one crop in your home, all year, and the Internet provides an easy sharing system as well as a way to divide up the crops in a logical way. I share my cucumbers and in return get whatever I need from the other neighbors’ crops via an organized ongoing sharing arrangement. My guess is that using the waste water (treated) and excess heat from the home you could grow food economically in greenhouses. If you grow more than you eat, the excess is sold in neighboring towns, and that provides enough money for you to buy condiments, sauces, and stuff you can’t grow at home.

Medical costs will never go to zero, but recent advances in medical testing technology (which I have seen up close in start-up pitches) will drive the costs of routine medical services down by 80% over time. That’s my guess, based on the several pitches I have seen.

Now add Big Data to the mix and the ability to catch problems early (when they are inexpensive to treat) is suddenly tremendous.

Now add IBM’s Watson technology (artificial intelligence) to the medical system and you will be able to describe your symptoms to your phone and get better-than-human-doctor diagnoses right away. (Way better. Won’t even be close.) So doctor visits will become largely unnecessary except for emergency room visits, major surgeries, and end-of-life stuff.

 

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Speaking of end-of-life, assume doctor-assisted-suicide is legal by the time this city is built. I plan to make sure that happens in California on the next vote. Other states will follow. In this imagined future you can remove much of the unnecessary costs of the cruel final days of life that are the bulk of medical expenses.

Now assume the city of the future has exercise facilities nearby for everyone, and the city is designed to promote healthy living. Everyone would be walking, swimming, biking, and working out. That should reduce healthcare costs.

Now imagine that because everyone is growing healthy food in their own greenhouses, the diet of this new city is spectacular. You’d have to make sure every home had a smoothie-maker for protein shakes. And let’s say you can buy meat from the outside if you want it, so no one is deprived. But the meat-free options will improve from the sawdust and tofu tastes you imagine now to something much more enjoyable over time. Healthy eaters who associate with other healthy eaters share tricks for making healthy food taste amazing.

Now assume the homes are organized such that they share a common center “grassy” area that is actually artificial turf so you don’t need water and mowing. Every home opens up to the common center, which has security cameras, WiFi, shady areas, dog bathroom areas, and more. This central lawn creates a natural “family” of folks drawn to the common area each evening for fun and recreation. This arrangement exists in some communities and folks rave about the lifestyle, as dogs and kids roam freely from home to home encircling the common open area.

 

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That sort of home configuration takes care of your childcare needs, your pet care needs, and lots of other things that a large “family” handles easily. The neighborhood would be Internet-connected so it would be easy to find someone to watch your kid or dog if needed, for free. My neighborhood is already connected by an email group, so if someone sees a suspicious activity, for example, the entire neighborhood is alerted in minutes.

I assume that someday online education will be far superior to the go-to-school model. Online education improves every year while the classroom experience has started to plateau. Someday every home will have what I call an immersion room, which is a small room with video walls so you can immerse yourself in history, or other studies, and also visit other places without leaving home. (Great for senior citizens especially.) So the cost of education will drop to zero as physical schools become less necessary.

When anyone can learn any skill at home, and any job opening is easy to find online, the unemployment rate should be low. And given the low cost of daily living, folks can afford to take a year off to retool and learn new skills.

The repair and maintenance costs of homes can drop to nearly zero if you design homes from the start to accomplish that goal. You start by using common windows, doors, fixtures, and mechanical systems from a fixed set of choices. That means you always have the right replacement part nearby. Everyone has the same AC units, same Internet routers, and so on. If something breaks, a service guy swaps it out in an hour. Or do it yourself. If you start from scratch to make your homes maintenance-free, you can get close. You would have homes that never need paint, with floors and roofs that last hundreds of years, and so on.

Today it costs a lot to build a home, but most of that cost is in the inefficiency of the process. In the future, homes will be designed to the last detail using CAD, and factory-cut materials of the right size will appear on the job site as a snap-together kit with instructions printed on each part. I could write a book on this topic, but the bottom line is that home construction is about 80% higher than it needs to be even with current technology.

The new city would be built on cheap land, by design, so land costs would be minimal. Construction costs for a better-than-today condo-sized home would probably be below $75,000 apiece. Amortized over 15 years the payments are tiny. And after the 15th year there is no mortgage at all. (The mortgage expense includes the solar panels, greenhouses, etc.)

Transportation would be cheap in this new city. Individually-owned automobiles would be banned. Public transportation would be on-demand and summoned by app (like Uber).

And the self-driving cars would be cheap to build. Once human drivers are out of the picture you can remove all of the safety features because accidents won’t happen. And you only summon a self-driving car that is the size you need. There is no reason to drag an empty back seat and empty trunk everywhere you go. And if you imagine underground roads, the cars don’t need to be weather-proof. And your sound system is your phone, so the car just needs speakers and Bluetooth. Considering all of that, self-driving cars might someday cost $5,000 apiece, and that expense would be shared across several users on average. And imagine the cars are electric, and the city produces its own electricity. Your transportation budget for the entire family might be $200 per month within the city limits.

The cost of garbage service could drop to nearly zero if homes are designed with that goal in mind. Your food garbage would go back to the greenhouse as mulch. You wouldn’t have much processed food in this city, so no cans and bottles to discard. And let’s say you ban the postal service from this new city because all they do is deliver garbage anyway. (All bills will be online.) And let’s say if you do accumulate a bag of garbage you can just summon a garbage vehicle to meet you at the curb using the same app you use for other vehicles. By the time you walk to the curb, the vehicle pulls up, and you toss the bag in.

I think a properly-designed city could eliminate 80% of daily living expenses while providing a quality of life far beyond what we experience today. And I think this future will have to happen because the only other alternative is an aggressive transfer of wealth from the rich to the poor by force of law. I don’t see that happening.

Scott AdamsAbout the Author: Scott Adams is the creator of the Dilbert comic series. He can be reached on Twitter at @ScottAdamsSays. You can also find Dilbert on Facebook.