By Kevin L. Baker, MBA
I recently moved to Sydney, Australia from Buffalo, New York USA after marrying an Australian. My personal life afforded me the great opportunity to not only expand my business portfolio into the Great Southern Land, but to also get to know the Aussie approach to life and business. When I started traveling back and forth between Sydney and Buffalo in 2015, I quickly became aware that growing cities and businesses experience similar “growing pains” as they scale up. Listening to my fellow “Sydney-Siders” talk about the challenges of life in a growing city was quite different than the revitalization discussions of my rust belt home town in New York. Surprisingly, the discussions about the growth challenges in Sydney sounded very similar to the discussions that go on within growing businesses! In this article, I first will discuss why growing cities are the necessary environment for businesses to growth. Then, I will present three short lessons businesses can learn from growing cities. Finally, I ask you to finish this article by offering additional thoughts in the comment section about what business can learn from cities–positive or negative.
Why City Growth Is Vital for Job Growth
Sydney, Australia is a growing world city that should not stop growing. Even though the debate rages locally about the effect of growth on traffic, housing, and other vital infrastructure resources, if the country is to remain competitive globally and see job growth, cities like Sydney must continue to grow. The argument is always there is not enough money or resources to do hard things like urban planning and city growth. Yet, this is exactly what causes economic and job growth.
According to Innovation and Science Australia (ISA) innovation performance is determined by three key activities: how well we create knowledge, how well we transfer that knowledge to different parts of the system, and how well our businesses apply knowledge in developing new goods and services and bringing them to market. ISA finds that while the Australian system has points of strength, Australia is lagging behind international competitors in key areas and much work must be done to break into the top-tier of innovation nations.
This is where city growth becomes important. According to futurist Peter Diamandis:
- In the 1950s, 7% of the population lived in cities.
- Today, a little over 38% of people live in cities.
- By 2050, 70% of the world’s population will live in cities.
What we now know is, as the rate of urbanization (and the density of a group of people) increased since 1950, so too did the rate of invention – one study suggests that doubling a city’s population drives a 15% increase in income, wealth and innovation. So if Australia, or any country is to grow their economy, the growth of cities is what grows innovation, which is in turn what grows jobs.
What We Can Learn from City Growth to Expand Our Businesses
- CITIES ARE FORCED TO INNOVATE AS THEY GROW. When faced with constraints of limited money and resources, a majority of people will say hard things like growing a business cannot be done. This is when leadership rises up and necessity becomes the mother of invention for those who are courageous enough to have a vision and the optimism to try.
- CITIES BRING PEOPLE TOGETHER. We are living through an era of city growth. In just over 50 years, there has been a 31% increase of people living in cities. That rate is about to double with 32% more people worldwide will live in cities in just 25 years. As people live and work more together, invention, innovation, and development skyrocket. As businesses bring people together in employee interaction spaces a culture of innovation can develop. If people are kept apart in closed cubicles only, communication diminishes and ideas slow to a trickle.
- CITIES ARE ACCOUNTABLE. City budgets and spending is public information and taxpayers hold those in charge accountable for spending and investment. While controversial, the more businesses open the books to their employees and educate employees in financial management skills, a culture of accountability creates an environment of invention and innovation. When people at all levels know the numbers and care about their budget, ideas on how to “do more with less” abound. When this kind of thinking is rewarded, companies thrive.
As cities and business grow together, innovation nations grow into world leaders, as do the businesses within their borders. What will you do as a result of reading this article? Please share it with others and talk about innovation with the people in your community and workplace!