Marshall Memorial Fellowship: Europe Offers Models to U.S. Cities to Counter Barriers to Innovation
Over recent years, policy and resources in U.S. urban areas have been grossly misdirected. Policy has been focused on compensating for a city’s geographical shortcomings via grand, top-down urban planning projects. Resources have been squandered by playing roulette with a city’s economy via lucrative tax incentives and related subsidies heaped on certain trendy industries. Grand expectations of job creation and economic growth are rarely ever met, resulting in a disenfranchised and cynical populous. Despite a growing tendency to use trendy new language – innovation, place, ethical redevelopment, community engagement, platforms – the tactics and outcomes remain the same. In this classic case where old habits die hard, more radical approaches are needed to reframe policymakers’ attitudes and actions towards developing policies and making related investments in cities that leverage human capital and advance human potential.
That radical approach involves two components: (1) substantial investments – agnostic to pedagogy or perceived growth potential – in education and programs to support establishing and growing small-to-medium enterprises; and (2) removal of institutional barriers to entrepreneurial opportunity via liberalized zoning and licensing requirements; simplified and transparent code enforcement; and clear tax policy.
As a 2015-16 Marshall Memorial Fellow of the German Marshall Fund, I have learned that examples of this activity abound, each standing ready to be scaled with appropriate investments and a desire to replicate en masse.
From an education perspective, German cities are rapidly adopting models that can be scaled in cities across the world. Gymnasium Hamm in Hamburg is a secondary school serving foreign students and displaced peoples; the focus is on language, comprehension and a traditional, rigorous college-prep curriculum. The Nelson Mandela School in Berlin is an international school with a focus on language, critical thinking and global studies. In both schools, students hail from around the world – some are in Germany by choice, studying ballet, playing sport or children of expat parents; others by necessity, escaping geopolitical conflict and the related socio-economic catastrophe that ensues. The pedagogy in each school remains different, reflecting the needs of the community as opposed to the theories of politicians, educational consultants or standardized test makers. As a result, regardless of background or reason for being in Germany, students graduate with the skills, confidence and – most importantly – self-awareness needed to be a global citizen and productive member of society.
From an economic development perspective, the core focus of investment needs to focus on growing small and medium enterprises. Hamburg Kreativ Gesellschaft seeks to grow employment and revenues for Hamburg’s creative sector through helping creative sector entrepreneurs build organizational capacity and connect with new clients. Hamburg Kreativ Gesellschaft was gestated by the Hamburg Ministry of Economy, Transport and Innovation as part of a larger strategy to reposition Hamburg’s economic development activities; a departure from the conventional economic development tactics of tax incentives and related corporate subsidies towards a series of industry-led and industry-specific economic clusters. The results: Hamburg remains one of the top German states in terms of economic growth, a recognized European capital of innovation and a city where opportunity is available to many.
Endeavor Turkey is a sector agnostic non-governmental organization, based in Istanbul, and charged with the mission of helping high-impact entrepreneurs scale business operations. Endeavor uses a simple, mentorship-based model, requiring few operational resources and delivering solid results. Coupled with the tactic of sharing success stories of high-impact entrepreneurs with the next generation of Turkish entrepreneurs, this model addresses the objectives of encouraging more Turkish adults to pursue entrepreneurial careers and creating jobs for the more than 12 million youth anticipated to enter the Turkish workforce.
From a planning perspective, a lack of planning and related enforcement drives opportunity. Case in point: Istanbul. A bustling metropolis of commercial activity, both formal and informal, occurring in every corner. A walk from Grand Bazaar to Taksim Square paints a fascinating picture: garment manufacturing facilities above retail shops; retailers and galleries in otherwise vacant and condemnable buildings; family owned cafes next to international chains; unlicensed street vendors selling mussels gathered from the banks of the Golden Horn under highway overpasses, outside of marketplaces and in public squares; underground arcades selling everything from cigarettes to firearms to cellphones to power tools.
This activity, though much of it unsanctionable in any U.S. city, is the stepping stone of entrepreneurship and economic empowerment. And any city seeking to be a human-centered, prosperous place for all of its citizens should take a close look at current zoning, licensing, inspection and taxation requirements – tools traditionally used by planners to influence growth and promote good societal behavior, but whose costs and effects often outweigh benefits. The lens for this closer look: clarifying, liberalizing and eliminating most zoning and licensing requirements; and clarifying inspection and taxation requirements.
The lessons taught through the Marshall Memorial Fellowship reinforced that there exist real, tangible opportunities for U.S. urban policy makers to offset structural barriers to opportunity while eliminating institutional barriers to opportunity. Structural barriers to opportunity removed through education and focus on entrepreneurship; governmental barriers removed through liberalized zoning and land use policies. No distractions. No fluff. The result: a human centered and prosperous city.
Matthew Clayson, Vice President and General Counsel, Detroit Trading, is a Spring 2016 American Marshall Memorial Fellow.