Cities and the knowledge-driven economy

The second keynote speech of the day was delivered by Charlie Leadbeater, an independent consultant and author of Living on Thin Air: the Power and Peril of the New Economy.

The theme of Charlie Leadbeater's thought-provoking talk was centred on the role of cities in a knowledge-driven economy and how cities can create a sense of excitement around their capacity to come up with ideas. He explained that today we live in an economy in which increasingly the way that we generate value revolves around the generation of ideas and their application. It is the generation of know-how and its combination with other assets, such as the ability to manufacture, to distribute and to finance, which is the key to competitiveness. The combination of knowledge capital and financial capital is critical for competitiveness, Charlie maintained, forming the basis of many new companies and the most dynamic regions, such as California's Silicon Valley.

Charlie Leadbeater went on to explain that cities and 'clusters' are important because they attract the necessary combination of assets, people, resources and ideas. He described cities as wellsprings of creativity, centres of learning, and centres of innovation which in turn depends on the rapid exchange of tacit knowledge. Cities also generate entrepreneurship and this depends on the support of networks and partnerships to succeed. "One of the things that we have to do in this country is to move well beyond the idea of the entrepreneur as a kind of lone maverick," he commented. "Most entrepreneurship these days in high-tech industries is partnership and team-based and it is the speed at which you can create those teams that really matters."

Charlie Leadbeater

Although Britain has had a long experience of creating 'clusters', these have not always proved successful. Too frequently they are based around a single industry or one large company. The critical question for cities, he thought, was not how to create a cluster but how to create a 'dynamic' cluster which would take off and grow. A distinctive and durable knowledge base, highly adaptive local institutions which enable people to share ideas, and the ability to look to the outside were important factors which could contribute to this. "All successful cities over history have always had large immigrant populations. They have always attracted an influx of new ideas and new people," explained Charlie. "Openness, diversity and immigration are absolutely vital to breathing life into cities."

A business creation platform, would allow people to rapidly turn ideas into businesses, and finally, citing the example of Bilbao, Charlie urged political leaders to think of themselves as entrepreneurs and to take risks to get cities moving.

In the ensuing question and answer session, delegates queried why Charlie had not dealt on the issue of regeneration and social inclusion, and commented on the downsides of the American experience, and the difficulties of smaller towns and cities in creating a culture of entrepreneurism.