September 26, 2016
Is it any surprise that the Web Summit decided to head to Lisbon? I am in the amazing Portuguese capital today speaking at a conference. It seems that the entire city has decided that hosting conferences is sufficiently important for the modern brand of the city, that everything is designed to make the attendees feel special.
While I am talking at a small economics conference, the Web Summit doubling its size to nearly 50,000 attendees, tells us that tech conferences and tech is where it is at.
According to the latest European Digital City Index, in terms of tech, Lisbon is quite a way behind Dublin, but it is catching up. Dublin ranks eighth out of 35 European cities when it comes to being a place to do business in the tech sector, whereas Lisbon is 17th. Lisbon is only moving one way, however. That’s upwards.
Unfortunately, according to the index, Dublin’s infrastructure is dragging us down. Have a look at digitalcityindex.eu for the details.
While we rank very highly in terms of entrepreneurial culture, our provision of broadband, our telecoms infrastructure and our psychical infrastructure, such as housing and traffic, let us down badly.
The reason all of this counts from a business perspective is that all cities are now in competition with each other for talent, capital and innovation. And the most creative cities, the ones that offer the best combination of lifestyle and commerce, will win.
In our age of globalisation, the creative economy is the most elevated state of grace a region or city can attain and the more the region scores on what the Americans call a “creative index” the more likely it is to be wealthy.
We are now in the third great era of economic growth, where rewards go to those regions with the highest percentage of creative people who use their brains rather than brawn to make a living.
For centuries, we all lived in the agricultural era when land, land ownership and the produce of the land determined wealth.
Increase in human wealth came via breakthroughs in land productivity and innovations in cultivation.
So finding new crops, new ways of growing them and new machines to increase the yield per acre determined the wealth of the region.
The second great economic era was the industrial age when hard economics came into its own. Hard labour was fused with industrial capital to create the industries of the last century, such as railroads, cars, consumer goods and steelworks. Initially, the new industrial world was located where energy and labour was cheap, easy to extract and plentiful.
So the industrial development of the world was dictated by geography and, more accurately, geology.
In the past 20 years, this industrial world has migrated to a place where labour is cheap. So, for example, the great shipbuilding ports of the world are now in Korea rather than in Europe. We are also seeing the rapid hollowing out of manufacturing in the West as it ups and leaves for China.
Today, the real action for rich countries like Ireland is in the creative industries and the long-term way to protect our standard of living is to foster a creative class.
A few years ago, the American academic Richard Florida identified those people who work with the creative side of the brain.
He believes, and with some compelling evidence, concludes that the US cities with a high proportion of these types – musicians, artists, writers, software engineers, architects, designers, entrepreneurs and the like – are the cities with the strongest growth rates, the highest standards of living and the most satisfied citizens.
He suggests that creative people cluster around each other, in tolerant, open cities. So over the coming years, a crucial factor in attracting them is to create the right urban environment for this tribe.
In making up their minds about where to live, work and make their talents available, they consider the cultural attractions, the nightlife, the atmosphere of the restaurants, bars and cafés, the number of pleasant parks and open spaces.
They will also consider the high-arts, the theatres and whether the national concert hall is up to scratch.
And what about the city’s architecture? What about transport – is it efficient and clean?
We are talking about designer cities here – but designer cities with culture, heritage and a sense of difference.
The great advantage that Ireland has as a region, and Dublin has as a city, over many other places, is that we have a brand.
Whether it is justified or not, Ireland has a brand and it is probably our strongest selling point. It has been carefully cultivated and should be guarded at all costs.
It means many different things to many different people, but compared to other countries with bigger populations – like Belgium, for example – Ireland has a much stronger international brand. Therefore, the IDA should continue to build on this to try to attract in both the creative industries and the creative people.
The arts is a particular case in point. Our state must invest not just in physical or human capital but cultural capital, too. This can be literature, dance, theatre – anything that elevates the cultural edge of the place. This week’s Dublin Theatre Festival is a good example.
But it doesn’t have to be the performing arts; investment in great architecture can be extremely important too.
A great example of this type of cultural dividend is the Guggenheim in Bilbao. The Basque capital has long been associated with the industrial heartland that is the Basque country.
However, in 1997, the city commissioned Frank Gehry, the renowned American architect, to build a new museum based on the Guggenheim in New York.
The ambition was immense, but the statement bigger still. It was signalling to all that Bilbao took its culture seriously. The reaction has been swift: tourist numbers have gone through the roof and Bilbao is now seen as a potential home for Spain’s creative class.
Walking around Lisbon, this capital not just of Portugal but hub of the Portuguese speaking world – the fifth most spoken language in the world – it is not difficult to see that the Portuguese are taking the creative class seriously. There are galleries, museums, beautiful buildings, the nightlife is extraordinary, transport is excellent and rent is cheap.
Once, when Portugal ruled the waves, this was the centre of the world. It may not ever get there again, but it will certainly give other cities a run for their money.
Dublin is in competition with places like this. The Web Summit’s move here is clear evidence of this fact. We’d better take notice, up our game and embrace the creative class.