Any colour as long as it’s green

The Wall Street Journal tells me that Tesla has now overtaken Ford as the second largest car maker in the US by market value. General Motors is ahead but may now be glancing in the rear view mirror. 

Is this a “seismic shift” in the industry as WSJ puts it – a “growing belief that internal-combustion engines will be replaced by electric motors as the primary power source for automobiles”? Others disagree, seeing more hype than substance. Currently, Tesla produces fewer than 100,000 cars a year, compared with Ford’s millions. But are we on the brink of a major innovation-led change? 

Cities, Data and Digital Innovation: My new paper

My paper on Cities, Data and Digital Innovation is published today by the University of Toronto. You can read more about it here, and download the paper here.

I wrote the paper last year while on sabbatical at the University of Toronto. I enjoyed living, working  and writing the paper in Toronto. I hope you enjoy reading it.

BIG CITY, BIG IDEAS: Data Innovation and City Governance

Earlier this year, as part of my sabbatical at the Munk School of Global Affairs, I gave a public lecture in Toronto on the theme “Data Innovation and City Governance”. This was part of the University of Toronto’s ‘Big City, Big Ideas’ series, and I was following in the distinguished footsteps of speakers such as Richard Florida, Mayor Naheed Nenshi, Michael Storper, Meric Gertler, and others.

You can view the webcast of my talk here.

What’s left to disrupt?

Jill Lepore’s article in the New Yorker, “The Disruption Machine” is already creating a stir. I shall not try to summarise what is an excellent and provocative essay, but rather urge you to read it and also to read some of the interesting reactions to it, such as those by Will Oremus in Slate, Andrew Leonard in Salon, Timothy Lee at Vox and Kevin Roose in New York magazine. One of Lepore’s starting points is the current ubiquity of the ‘disruptive innovation’ paradigm, citing and critiquing Christensen’s work: “Ever since ‘The Innovator’s Dilemma’, everyone is either disrupting or being disrupted. There are disruption consultants, disruption conferences, and disruption seminars.”  Has the term being empted of all meaning? Lepore doesn’t go quite that far, but does argue that “Disruptive innovation is a theory about why businesses fail. It’s not more that that. It doesn’t explain change.” Timothy Lee, in response to Lepore, accepts that the concept is overused and sometimes misused – but it retains merit and explanatory power: “Disruption is a dumb buzzword. It’s also an important concept.”

We have been here before. Thomas Kuhn’s book, the Structure of Scientific Revolutions, had an enormous impact on how we think about science and social change, and introduced the important term ‘paradigm shift’. Sometimes ideas can perhaps be too impactful: for Kuhn, a paradigm shift was a rare, epoch-changing event, but the term in the 1980s had become a buzzword. Suddenly, there were paradigm shifts everywhere one looked. (See John Naughton’s article here for a good analysis of the importance of Kuhn’s book).

I think the more general issue that lies behind this and similar debates is how much any theory of change can actually be a practical guide to action, whether that action is by firms and corporations in terms of business strategy, or by government agencies in the form of policies and programmes. When I was an academic, I puzzled over this as a point of theory; now as a policy leader and bureaucrat, I continue to puzzle over it as a practical concern. For example, we know quite a lot know about why economic clustering is important for growth and – yes – innovation, and we even know something about how and why clusters grow (or don’t grow). But it’s a long step to move from that analysis and understanding to a ‘cluster strategy’ or ‘innovation policy’. We can perhaps define some general characteristics of what government – at both national and city level – can do to create the general conditions supporting innovation, creativity and growth, and we can certainly make a (fairly long) list of things not to do. But I think we need to be cautious in going further, and I get distinctly nervous when I see innovation turned into a government programme, with milestones, deliverables, bar charts and the rest of the bureaucrat’s tool-kit ( a tool-kit which I believe is essential for other types of government activity, let me make clear). I have much less experience with business strategy in the private sector, but I suspect that the situation is similar, as convergent evolution means that large organisations, whether public or private, end up resembling each other more than either of them resembles anything else.

There is clearly something in the concept of ‘disruptive innovation’. It has strong links back of course, to Schumpeter’s ‘creative destruction’, and shares with Schumpeter the emphasis on the importance of entrepreneurship and the vital role of innovation (products, marketing, business practice). For Schumpeter, change in capitalist economies was ceaseless, oligopolies and imperfect competition were the rule not the exception, and capitalism was characterised by instability, cycles and crises, not equilibrium – indeed it was this very instability that generated economic growth, although Schumpeter was gloomy about the long-run survival of capitalism as a system, for social rather than economic reasons.

Expo Real Munich 2013

I spoke at Expo Real in Munich last Monday. This was the first time I had attended this huge European property conference, which is, as its website  says  “A three-day get-together of decision-makers and experts from the entire sector—from all around the world”  –  or put more simply  ‘MIPIM without the yachts’. The conference was impressively well organised, and is truly vast – it took me 15 minutes to walk from the main entrance to the location of my panel, even with the aid of several travelators. Getting to my hotel the previous afternoon was also easy – it was less than 10 minutes from disembarking the plane at Munich airport to standing in front of the S-bahn ticket machine offering instructions in several languages re purchasing the correct ticket. This was in contrast to the first part of my journey from Cambridge to Stansted Airport where the hourly train which was already in the platform and humming to itself in that bus-like way that cross-country diesel trains do, was cancelled (with no notice) due to ‘staff shortages’. Although, Cross-Country trains have a twitter account, and indeed tweet relatively frequently, they make it clear that they do not respond to tweets or replies, which seems to miss the point of what social media is all about. Interestingly, Cross-Country is owned by Arriva which is owned by – err – Deutsche Bahn.

I spoke on two panels which formed part of a very interesting series on cities and urban development convened by international cities expert (and member of the London Enterprise Panel) Greg Clark together with Expo Real Exhibition Director Claudia Boymanns.  You can see my slides on the previous post.  My fellow panelists were from Amsterdam, Zurich, Edinburgh, Helsinki, Glasgow and Munich. Some observations (in no particular order) :

  1. The future is probably hyphenated: It is customary on these occasions to remark on the similarities between the various cities in terms of the issues faced. In this instance, it was undoubtedly true. I was struck for example by the fact that all of us in the first session spoke about the need to diversify the economic base in each city – we shared an analysis that looked to a varied economic base as the most likely route to economic prosperity rather than trying to pick winners in terms of sectors. I think this is a welcome change from what would have been accepted wisdom a few years ago, and perhaps reflects the gradual diffusion of ideas of agglomeration economies and spillover effects from the academic into the policy sphere. Certainly in the case of London, we see cross-over sectors –  fintech, creative-tech, screen-based convergence technologies etc as important sites for innovation and growth; the growth sectors of say 2030 or 2050 may not have been invented or hyphenated yet.
  2. New ideas in old buildings:  Jane Jacobs’s mantra is alive and well. While the conversion of former industrial and manufacturing spaces into small workspaces for creative, tech and digital firms is now well-known and almost conventional, we are now seeing the conversion of former commercial office development into such spaces.  This presents challenges for the property development industry  – the new occupiers are not looking for conventional office space but something more cutting-edge, creative and consistent with their work practices and brand values.
  3. Cities *heart* banks: That is putting it too strongly, but for cities like London, Zurich, Edinburgh, financial services remains an important – although probably less dominant – part of their economic futures. I was fascinated to hear that in Edinburgh, since the crisis, the level of FDI has increased rather than decreased. Previously, rapid internal growth and full employment had restricted opportunities for inward investment, but with the easing of the labour market, conditions had changed.
  4. Competition and co-operation across cities: Nothing new here, but it is clear that while in general the economic growth of other European cities can only help London and other UK cities – their imports are our exports and the reverse; the growth of the market brings integration, innovation and efficiency gains – there are also other aspects where winner-takes-all. So, to take one example, there is unlikely to be more than one European city that will be a player in  the rapidly growing offshore Renminbi market.