CITIE, which confusingly stands for “City Initiatives for Technology, Innovation and Entrepreneurship,” is a (somewhat) recently released report that details how cities can become more amenable to, you guessed it, “Technology, Innovation and Entrepreneurship.” Their newest report, available here, is a very useful and informative guide of best practices for cities looking to boost their profile as “tech hubs.”
The CITIE framework is unique in that it focuses on the intersection of city governance and startups. The people at Nesta, Accenture and Future Cities Catapult identified three areas in which cities can be help to startups: Leadership, Infrastructure and Openness. Within these areas, they identify roles that the city can play. Thus, within “Openness,” a city can play the role of Regulator, Advocate and Customer, within “Infrastructure,” Host, Investor and Connector, within “Leadership,” Strategist, Digital Governor and Datavore.
The report proceeds to detail each of these roles and call out cities or organizations that are doing exceptional things in this area. I found this section especially interesting, since it brought to my attention initiatives from as far afield as Helsinki, Barcelona and Tel-Aviv. This represents, to me, the most exciting thing about urbanism right now: the free exchange of ideas between urban areas all over the world. I would highly recommend the report to anyone interested in civic entrepreneurship.
If I have critiques of the CITIE framework, they are largely of the ideology that underpins it and not the execution of this report, which is superb. I take issue in particular with the creeping startupistic glorification of failure and the exaggeration of the value of “high-growth” companies (startups).
Throughout the report, the authors praise city policies which, like startups, “aren’t afraid to fail.” This glorification of failure is one of the more dire side effects of the media exposure of startups. What is lacking here is a firm explanation of the origin of this “fail fast” idea.
The insight that failure is tolerable came from the legitimate insight that, in the transition from installation-based software (remember the DVDs that came in a box) to web-based software (or SaaS), there was a much smaller marginal cost to fixing errors. If customers didn’t like a feature, it could be reworked, since software updates can be deployed almost continuously.
What this means is that the “fail fast” ideology comes a world where both marginal cost of errors and the marginal cost of fixing those errors is low. If twin.ly, my social network for twins, doesn’t work, who cares? And the cost to fix it is basically more Cheetos and beer for my programmers. “Fail fast” comes from a world of consumer, web-based software and should be extended to other domains with care.
The question is: What is the marginal cost of getting a city service wrong? What is the marginal cost of fixing it? Answer for both: A whole lot more than RateMyDog.com. Not only are you messing with potentially foundational systems, but they often involve physical assets (remember those?).
I would not at all dispute that governments should be more agile (as in the traditional adjective, before “agile" was turned into a pseudo-religion). But I would caution, very much, the blind adoption of Silicon Valley articles of faith like “fail fast.”
I also dispute the valorization of the “high-growth” business above all.
First of all, let’s examine the term “high-growth.” It’s delightfully puffy. What, exactly, is growing so highly? Is it revenue? With the way startups operate now, probably not. Is is staffing? Also: probably not. AirBnB for all its media froth only employs a few hundred people. Usually what is growing is “users,” and users of free services are worth exactly zilch.
My point is that I am yet to be convinced that the single-minded support for startups is in the long-term good of a given city. They employ very few people, drive property values up and are funded almost entirely at the whim of the global elite without a drop of revenue in site, which makes them fragile to those same whims. I’m not sure that driving the less-educated out of a city to fill it with programmers who make something that no one pays for is a great civic good.
To be fair, I work in technology and very much benefit from these global trade winds. And I would love if Los Angeles implemented a lot of suggestions in the CITIE report. But I do think that we do need to balance our startup mania with support for SMEs, apprenticeships in high-tech manufacturing and education for a variety of lifestyles. I like the internet as much as everyone else, but what makes cities vibrant is their openness to all types of people: high-growth, low-growth and everything in between.