It’s business time in the city
In the newly released Networked Society City Index report, produced in collaboration with the Stockholm School of Economics and Improvement Labs, we continue to explore the correlation between cities’ ICT maturity and their triple-bottom-line development.
The City Index reports aim to develop a comprehensive index comparing cities’ ICT maturity and their social, economic and environmental development (the triple bottom line). Previous reports in the series have studied 25 urban areas around the world from the city and citizen perspectives while this final installment looks at cities from a business perspective.
Our research confirms the strong correlation between ICT maturity and triple-bottom-line development, with New York, Stockholm and Seoul topping the list of business-friendly ICT cities. That said, even cities with a shorter track record of ICT investment have made significant progress relative to their ICT maturity. These include moderately mature cities such as Sydney, Buenos Aires and Istanbul as well as less mature cities such as Jakarta, Dhaka and Karachi.
One of the key takeaways is that businesses thrive in cities that invest in ICT. For example, we found that a 1 percentage point increase in broadband penetration increases new business registration by 3.8 percent.
We also found that cities with well-developed ICT strategies and implementation programs are fertile ground for business and entrepreneurship. Top-ranking New York City, for example, has opened 16 business incubators to support entrepreneurship and encourage start-ups. Similarly, its Applied Sciences NYC initiative is connecting major academic institutions in the city with international universities and global industry partners.
This makes sense considering that cities with higher concentrations of colleges and universities are more likely to encourage entrepreneurial activity (Maddock and Viton, 2008).
Programs that make the most of ICT are a foundation for successful business in cities, as are clear legal and fiscal frameworks. But we still need to go further. New urban developments such as the Skolkovo Innovation Center on the outskirts of Moscow, and Stockholm Royal Seaport are examples of the new mindset that is needed for meeting city challenges head on.