Cities around the world have been trying to replicate the success of Silicon Valley and create innovation ecosystems that result in a thriving startup scene. Often these efforts can focus primarily on building glitzy new facilities, but as new research from the University of Indiana reminds us, it’s often an open-minded population that is far more important.
The researchers analyzed data from over 350 American cities to understand the prevalence and importance of human agency, entrepreneurial spirit, and ultimately economic growth. The results suggest that when people felt empowered in their city lives, they played a more active role in shaping the vitality of the area.
Entrepreneurial activity
The analysis unsurprisingly reveals that Austin and San Francisco were driving the most entrepreneurial activity and especially in terms of activity that drives economic growth. Other cities scoring highly include Dallas, New York, Sacramento, and Los Angeles. The researchers are keen to test their approach in other countries.
“Our study describes an ideal and what cities should strive for,” they say. “Future research could provide a more nuanced picture on how local populations with their unique psychological makeup interact with a structural city environment.”
It’s a people-focused approach to entrepreneurship that leans on the work of Jane Jacobs, whose groundbreaking book The Death and Life of Great American Cities highlights so effectively what makes a city great. The study aims to build on this thinking and examine what features support growth-oriented entrepreneurship. The results highlight the importance of empowering open and agentic people.
“They are empowered by a physical and industrial city landscape that enables them to act in more innovative and entrepreneurial ways,” the researchers say.
Looking at the people
The researchers argue that by focusing excessively on the built environment, researchers have overlooked the important role people play in the vitality of cities.
“The core message and spirit of Jane Jacobs has been overlooked,” they say. “The most compelling finding of our study suggests that a strong open orientation of people in cities, designed to be dense and diverse, results in high impact entrepreneurship with start-ups that have the potential to grow significantly.”
By building a psychological profile of a city, the researchers believe they’re able to spot geographic personality traits. For instance, those cities that were able to facilitate agentic tendencies among residents tended to have people who were more creative, learning-oriented, and open-minded, which significantly boosted entrepreneurial activity.
“One secret of great entrepreneurial cities seems to be that open-minded people are empowered by a city environment, bringing many similarly open-minded people together in dense and diverse places to interact, share new ideas and knowledge and inspire creativity,” they continue.
“Empowering people liberates their imaginations and not only is the human spirit lifted through interactions among people in a city, but the flow of new ideas inspires vital new innovations.”
The key is not just to focus on the diversity of people but also on the diversity of economic activity within the city. This will help to develop a fertile breeding ground for the sharing of knowledge and ideas.
