Local Economies of the Future: How Do Cities Thrive in the Digital Age?

Which of the world’s leading cities are best prepared to grow and thrive in the digital age? And just what does it take for a city’s economy to be “future ready”? ITIF held a discussion on these and other questions about how cities can make themselves future ready.

The discussion began with each of the panelists describing how they see digital innovation today and in the future, and how cities can best prepare for the ensuing changes. Amit Midha, president of the Asia Pacific and Japan region for Dell, described the need for a collaborative environment between government and the private sector that focuses on three main areas—human capital, ecosystems, and infrastructure. The coming technological revolution will bring exponential change and is bringing with it a wide range of opportunities and challenges for cities.

Moving the conversation toward how to actually implement innovation at the city level, Christy McFarland, the director of research at the National League of Cities, explained that cities which are effectively moving toward being future ready all have three key characteristics: They are data driven, open and engaged, and are customer-service focused. All the panelists agreed that infusing innovation and using technology throughout an entire community is vital for being future ready. The senior director for emerging issues and research at the U.S. Chamber Foundation, Michael Hendrix, acknowledged that a big concern for most city governments is avoiding disruption in their cities’ everyday work, but asserted that the answer is found in the people. Open, dense social networks are essential features of helping a community move efficiently toward embracing the digital age, especially when building within knowledge-rich environments such as urban economies.

Megha Mukim, an economist at World Bank Group, pointed out that one of the key challenges faced by local governments who want to integrate digital technologies within their infrastructures is that, often, reality remains different from the planned strategies. Overall, collaboration will be vital to overcoming such challenges. There is also a strong economic imperative for governments to innovate and adopt technological advancements, because becoming future ready is a tremendous opportunity for job growth.

The question and answer session was enlightening on a number of subjects, but particularly in regard to regulation and experimentation, respectively. Reducing red tape in business permitting is one critical way that cities can encourage innovation. Another important facet of moving toward creating sustainable, future-ready cities, McFarland said, is that a balance develops within the regulatory environment between local governments and state and federal governments. Hendrix pointed out that reducing barriers to the immigration of entrepreneurs in all sectors will create more opportunities for others within those communities, and Midha pointed out that cities do not and should not have to do everything by themselves. Working with other cities may help provide examples and assistance for many of the above concerns.

When asked about how society can overcome the pervasive attitude that technological experimentation—which is essential for advancement—is not an adequate use of taxpayer dollars, McFarland asserted that seeing effective examples will do much to change peoples’ minds. Midha agreed, and added that public-private partnership can help demonstrate these benefits to communities as a whole. Experimentation is an essential, risk-reducing activity in a time of profound technological and social change. Ultimately, the panelists all emphasized collaboration as a key factor in helping cities to thrive in the digital age, in addition to encouraging technological innovation and adoption.