Len Brown made a big deal in his first term about making Auckland the world’s most liveable city and projects like the CRL are key to that vision. But when it comes to business and Auckland’s economy is that vision worth it or should we instead be focused on keeping rates as low as absolutely possible – as the likes of Cameron Brewer would have us do.
Well a study just released out of the US suggests the focus on liveability is exactly what we should be doing if we want to build the economy and attract entrepreneurs. Richard Florida writing at the Atlantic Cities:
Creating high-growth, high-impact entrepreneurial enterprises has become a common goal of cities. Metros and states have cut taxes, implemented entrepreneur-friendly business policies, launched their own venture capital efforts, and underwritten incubators and accelerators – all in the hope of creating the next Apples, Facebooks, Googles, and Twitters.
But what really attracts innovative entrepreneurs who create these economy-boosting companies?
The answers: talented workers, and the quality of life that the educated and ambitious have come to expect – not the low-tax, favorable-regulation approach that many state and local governments tout.
These are the findings in a new report from Endeavor Insight, the research department of the non-profit Endeavor, which focuses on fostering and mentoring “high-impact” entrepreneurs. Based on surveys and interviews with 150 founders of some of the country’s fastest-growing companies, the report answers the basic question, “what do the best entrepreneurs want in a city?” It offers basic evidence that cities should focus on factors and conditions that attract the talented, educated workers that fast-growing entrepreneurial enterprises need.
Looking at this sample of America’s most successful new businesses, Endeavor identified two fundamental patterns.
For one, size matters. These top business-creators gravitated towards cities with at least a million residents in the metro area. This offered the scale and diverse array of offerings needed to attract talent.
A city also needs to be able to appeal to the young and the restless. The entrepreneurs surveyed were a highly mobile bunch when they first started out. They moved often and easily in the early phases of their careers, following personal ties or certain lifestyle amenities while also seeking the right environment to launch their enterprises. But eighty percent of respondents had lived in their current city for at least two years before launching their companies, meaning that cities had to catch them early. And once they started their first company, these business leaders rarely moved. So attracting this mobile group at an early age is key.
That talent is the most important aspect is common sense but the key is that it’s much easier to attract talented workers to an liveable city than one that’s not – although in Auckland’s case we probably have to be even more liveable to make up for our geographic isolation. Of course the idea that talent is key is something many larger businesses have understood for some time and in a local context it’s one of the reasons behind a number of big corporate office developments in recent years. EY is one of the companies that falls into that bucket and this video from just over a year ago talks to some of these factors for why they chose to be where they are.
Other important factors included access to transport networks and proximity to customers/suppliers. And at the bottom of the list of most important
Perhaps even more interesting from the perspective of urban policy are the location factors that did not make the cut – those that high-growth entrepreneurs found to be of little consequence in their location decisions. At the very bottom of the list were taxes and business-friendly policies, which are, unfortunately, exactly the sorts of things so many states and cities continue to promote as silver bullets. Just 5 percent of the respondents mentioned low taxes as being important, and a measly 2 percent named other business-friendly policies as a factor in their location decisions.
To drive this point home, Endeavor tracked more than 100 of the most common descriptive words that entrepreneurs used to answer the question, “Why did you choose to found your company in the city that you did?” Tax doesn’t make the top 50, falling below “rent,” “park,” “restaurants,” and “schools.” In fact, it barely manages to edge out the word “girlfriend.” Of the top ten most popular words, “lived,” “live,” and “living” all make the cut. Talent takes the first slot.
Here’s the list of the top 100 words.
Of course having a vision for the most liveable city is one thing, it’s a completely different thing to actually deliver on that and that’s something that’s still seems a long way off in Auckland.