Tag: martin prosperity institute

• The scale and scope of urban tech

  “Cities have become the basic platforms for global innovation and economic growth, supplanting the corporation as the fundamental organizing unit of the contemporary economy.” -Richard Florida

  Richard Florida and Patrick Adler of the Martin Prosperity Institute here in Toronto have been doing some research on what they are calling “urban tech.” They define it as encompassing the following industry sectors: co-living and co-working; mobility; delivery; smart cities; construction tech; and real estate tech.

  Here are the largest urban tech startups based on the amount of VC investment they have received:

  

  Below is how the space breaks down by sector. Mobility / ride hailing is the behemoth, receiving 61% of all VC investment. Food delivery is next. And “proptech” is at the bottom.

  

  Finally, here are the top “urban tech” cities. Beijing is right up there with San Francisco.

  

  For more information on the study, click here.

  Tables: CityLab

  2019.05.31

• Top 10 city regions by GDP (and comparable countries)

  Below is a mapping (by Taylor Blake of the Martin Prosperity Institute) of the top 10 metro economies in the world by GDP at purchasing power parity. In brackets, is a country with a comparable GDP.

  

  Tokyo is the world’s largest metro economy with ~$1.6 trillion in GDP. This is greater than the GDP of all of Canada. New York City is number 2 with ~$1.5 trillion in GDP, which is only slightly less than Canada.

  The point of all of this – which Richard Florida argues here – is that the global economy is, today, powered by metropolitan areas. And yet our governance structures do not reflect this new reality.

  Here’s an excerpt from Florida’s article:

  “Cities really are the new power centers of the global economy—the platforms for innovation, entrepreneurship, and economic growth. But when it comes to fiscal and political power, they remain beholden to increasingly anachronistic and backward-looking nation-states, which has become distressingly obvious with the rise of Trumpism in the United States and populism around the world.”

  Florida has been arguing this for years and I’ve really gotten behind it. The above chart is a good reminder just how big and wealthy some cities have become in today’s economy. 

  2017.03.17

• Where the world’s billionaires live

  The Martin Prosperity Institute here in Toronto recently published an interesting report called The Geography of the Global Super-Rich.

  What they did was use the Forbes 2015 Billionaire List to chart billionaires and billionaire wealth by location and by industry. They also looked at the wealth gap in each location and whether the wealth was self-made or inherited.

  A correlation analysis was also done to see what key variables – such as population, density, economic output, global city standing, VC investment, and so on – were positively correlated with a greater concentration of super rich people.

  There are 1,826 billionaires across the world according to Forbes. The researchers were able to match 99% of them to a specific metro area / primary residence.

  Here are the top 20 metro areas in terms of the number of billionaires:

  

  Look at Miami at #9. 

  I suspect that this may surprise some of you. But Miami has grown into a significant global city. As one of my friends from Miami likes to tell me: “The best thing about Miami is that it’s a Latin American city that’s so close to the United States.”

  Here are the top 20 metro areas in terms of total billionaire wealth: 

  

  A bunch of changes on this list because of extremely wealthly people and families in places like Bentonville (Arkansas) and Omaha.

  One of the conclusions of the report is that the size of the city generally matters:

  “The geography of the super-rich is a function of larger cities. Both the number of billionaires and their net worth are positively associated with the population of global cities, with correlations of 0.56 for the number of billionaires and 0.44 to their net worth.”

  Here is a chart comparing population to the number of billionaires:

  

  Cities such as New York, Moscow, and Hong kong, which sit far above the blue line, have more billionaires than their population size would predict.

  Here is a similar chart comparing venture capital investment to the number of billionaires:

  

  Once again, there is a positive association.

  Finally, here are a two charts that show which industries have produced the most billionaires:

  

  If you’re interested in this study, you can download the full report here. All of the charts were sourced from the report.

  2016.08.07

• The top 20 US neighborhoods for venture capital investment

  There’s a lot of talk about how venture capital investment has shifted from the suburbs to cities and how it is also concentrated in certain metro areas. But a new report from the Martin Prosperity Institute has dug even deeper to look at the top 20 neighborhoods (zip codes) in the US for venture capital investment.

  Here’s a summary of what they found:

  “The top 20 neighborhoods or zip codes for venture investment include nine in San Francisco, five in San Jose, three in Boston-Cambridge (one in suburban Waltham and two in Cambridge close to MIT) and one each in San Diego (close to the University of California, San Diego), Dallas, and New York (close to New York University).”

  And here’s the full top 20 list:

  

  Initially I looked at this list and thought that neighborhoods such as Menlo Park and Redwood City shouldn’t be labeled as San Francisco, since they are outside of the county. But technically they still fall within the San Francisco Metropolitan Area. 

  It’s amazing how San Francisco dominates this list.

  2016.06.17

• In support of a super-metro

  

  I just got home from a couple of coffee meetings, an afternoon bike ride and an impromptu basketball shootaround. Toronto is a different place in the summer. And it feels great to be biking everywhere.

  But Toronto is more than just Toronto. Toronto is at the center of a much larger urban agglomeration. And our continued success is going to partially hinge on our ability to work together in a coordinated way.

  Greg Spencer of the Martin Prosperity Institute recently published an interesting article called: Is it time to create a super-Metro? Here’s what it’s about:

  Our research at the Martin Prosperity Institute shows that economic competition is now primarily between cities rather than countries. To be successful in this environment, Toronto and its neighbours need to find a way to erase local divisions and solve their problems together. 
  

  Toronto is a wildly successful city, world-class in many respects. When our current institutional arrangements were forged, no one predicted the level of growth the region is experiencing. Status quo local government arrangements cannot adequately deliver the level of co-operation and collaboration needed to cope and plan for the future.

  Greg believes that the answer is a new regional authority that could give “democratic legitimacy to the very important decisions being made for the benefit of the wider region.” 

  I’m not going to comment on how all of this should be executed, but I fully agree that we need to think and act as one consolidated urban entity.

  Cities are the economic driver of the new global economy, but many (most?) of our governance structures do not properly reflect that reality. And the risk is that we are allowing arbitrary municipal boundaries and lack of coordination to hinder our ability to compete globally.

  This goes for Toronto and it goes for every other city region around the world.

  2016.05.22

• Top 20 cities for venture capital investment

  The Martin Prosperity Institute here in Toronto recently published a new report that looks at worldwide venture capital investment by city. The report is called Rise of the Global Startup City.

  The data is from 2012, because that’s what was available from Thomson Reuters, so keep in mind that there might be some variation in the rankings if we were to look at more recent data. Some of the cities sit fairly close.

  Nonetheless, here are a few of the broader takeaways (from the report page):

  “The United States accounts for nearly 70 percent (68.6 percent) of total global venture capital, followed by Asia (14.4 percent) and Europe (13.5 percent).”

  “Just two broad regions — the San Francisco Bay Area and the Boston-New York-Washington Corridor — account for more than 40 percent of global venture investment.”

  “Global venture investment is highly uneven and spiky — it is concentrated in a small number of large cities and metros around the world.”

  Here are the top 20 cities by total venture capital investment (in USD millions):

  

  And here are the top 20 cities according to venture capital investment per capita:

  

  Given the variation in these two lists, you realize that some cities are largely benefitting from sheer size. London, for example, drops off the list when you look at venture capital investment per capita. 

  In fact, in this second list, 19 of the 20 cities are in the United States. The only non-American city that remains is Toronto.

  2016.01.28

• Balancing oil and ideas

  

  https://500px.com/embed.js

  Canada is a resource rich country. And one of the things that commonly happens to countries with a lot of resources is that they begin to myopically focus on the immediate gains from resources at the expense of long term innovation and economic development. 

  This is known as the “resource curse.”

  The Martin Prosperity Institute here in Toronto recently published a report that looks at this exact topic: Canada’s urban competitiveness through the lenses of its resource economy and its knowledge economy. In the end, Richard Florida and Greg Spencer conclude that two can and should work together, but that we need to stop neglecting our cities:

  “The oil and gas industry is not necessarily a constraint on the creative economy, but in the past decade or so it has come to dominate thinking around economic development policy-making. It is time to use the resources from the energy economy to build a more secure future as an urban knowledge economy. We can also use
  talent and technology to deepen and expand the resource economy.”

  And one of their key recommendation is something I have argued for many times here on Architect This City:

  “A New Federalism for Cities: It is time to give cities the taxing and spending powers they require. Cities must be given more control over their own destinies if they are to prosper
  in the 21st century.”

  Now, here are a few interesting charts from the report.

  This first one looks at the relationship between a city’s population and its creativity levels. The two are positively correlated, which means that, in this context, bigger is better.

  

  This second one splits Canada in half – east and west – and then looks at how average income levels are affected by creativity levels (the knowledge economy). Here we see that in eastern cities, income levels are positively correlated with creativity levels. But in western cities, changing creativity levels have almost no impact on income levels. 

  

  Finally, this third chart compares the relationship between oil and gas employment (LQ = location quotient) and average income levels. What it finds is that income levels and oil and gas employment are positively correlated in the west, but there’s almost no relationship in eastern cities. 

  The way to read this chart is to think of the LQ as the employment multiple relative to the national average. So for example, a LQ = 10 means that the oil and gas employment levels are 10 times the national average. As you probably guessed, the pink dot way out on the right is Fort McMurray.

  

  If you’d like to read the entire report, you can do that here. I hope that our new Prime Minister, Justin Trudeau, will read reports like this and spend more of his efforts investing in our knowledge economy – which means investing in our cities.

  2015.11.08

• The most segregated cities in North America

  The Martin Prosperity Institute here in Toronto just released a new research study called Segregated City: The Geography of Economic Segregation in America’s Metros. 

  The report looks at the physical sorting and separation of advantaged and disadvantaged groups within cities. And it did so across 70,000+ Census tracts in the US and in terms of 3 different dimensions: income, education, and occupation.

  Here are the most segregated “large metros” in the US:

  

  Table Source: MPI

  And here are some of their broader findings – taken verbatim from page 9 of the study (click here for the full report):

  Economic segregation is positively associated with population size and density. It is also positively correlated to two other sets of factors that follow from metro size and density: how people commute to work and the breakdown of liberal versus conservative voters.

  Economic segregation tends to be more intensive in high-tech, knowledge-based metros. It is positively correlated with high-tech industry, the creative class share of the workforce, and the share of college grads. In addition, it is associated with two key indicators of diversity, the share of the population that is gay or foreign-born, which tend to coincide with larger, denser and more knowledge-based metros.

  Economic segregation is connected to the overall affluence of metros, with positive correlations to average metro wages, income, and economic output per capita.

  Race factors in as well. Economic segregation is positively associated with the share of population that is black, Latino, or Asian, and negatively associated with the share that is white.

  Economic segregation is associated with income inequality and even more so than with wage inequality. Its effects appear to compound those of economic inequality and may well be more socially and economically deleterious than inequality alone.

  The research team also looked at how Canada’s 3 largest metros – Toronto, Montreal, and Vancouver – compare to those in the US in terms of segregation. 

  The finding was that Canadian cities are overall less segregated than US cities, but that it should still be considered an area of concern. The most segregated of Canada’s 3 largest metros was found to be Montreal.

  

  Image Source: MPI

  My view is that our economy is going through a profound shift right now. We’re transitioning from the industrial age to the information age. And in its wake, we’re seeing a number of disruptions, one of which appears to be rising inequality and segregation. 

  That’s not to say that I think this transition is a bad thing (I don’t think it is), but I do think we should be carefully considering and designing our future.

  2015.02.25

• Are startups causing inequality?

  Earlier this week Richard Florida published on article on CityLab talking about the relationship between tech innovation (in cities) and inequality. Specifically, the article deals with the correlation between venture capital investment and a variety of factors, such as monthly housing costs, wage and income inequality, and so on.

  The intent of the piece was to address the growing backlash against tech workers – in places like San Francisco – who have become the symbol for the growing gap between the rich and poor.

  The strongest correlation appears to exist between venture capital investment and housing costs. As the amount of venture capital goes up, so do housing costs – which probably shouldn’t surprise you. The rich start outbidding the poor for housing. Note: The two outlying dots at the top right, in the graph below, are Silicon Valley and San Francisco.

  

  But when it comes to inequality, the relationship isn’t so clear. For wage inequality, there seems to be a relationship. But for the broader income inequality measure, the relationship is fairly weak. Here’s the graph:

  

  So this is not as black and white as it might seem. Regardless, Florida ends the piece with the following statement (that I think is spot on):

  It’s time to stop pointing fingers and get on with the far more important task of harnessing the urban tech revolution to create a new urban middle class and a more inclusive urbanism—one in which many more workers and residents can participate, and one from which many more can benefit.

  The answer is not to stop innovating. That would be counterproductive. We should be be encouraging innovation, but at the same time figuring out how best to harness it for society as a whole.

  Tomorrow, I’ll touch a bit more on how we might go about doing that. I have a post planned that I think will tie in really nicely to this discussion. So stay tuned.

  2014.12.11

• Does the world need a Global Parliament for Mayors?

  Earlier this month a team consisting of Benjamin Barber (who is author of If Mayors Ruled the World: Dysfunctional Nations, Rising Cities), Richard Florida (who is Director of the Martin Prosperity Institute here at the University of Toronto), and Don Tapscott (who is a leading authority on innovation) released a research report advocating for a global network of cities that they’re calling a “Global Parliament for Mayors.”

  Here’s a snippet from the press release:

  “Nation-states work together through multi-lateral agreements and global institutions in an effort to solve global problems. But states have limitations, and their cooperative efforts in our new era of interdependence and globalization are increasingly insufficient and even ineffective and outmoded,” say the three prominent researchers. A Global Parliament of Mayors represents a new type of governance network – one with enormous potential.

  “Our proposed parliament would operate as a global urban network with a vibrant online community that collaborates on key issues 365 days a year,” they say. “Multi-stakeholder governance has come of age and is now fully independent from control by any government, or governmental organizations like the UN.”

  And if you dive into their report, you’ll find the following 5 reasons for why they believe a Global Parliament for Mayors (GPM) makes sense:

  1. Global migration to cities. Most people live in cities, so it makes sense to concentrate problem-solving capabilities there.
  2. Urban predisposition for problem-solving. Cities are entrepreneurial, close to the people and richly connected to a wide variety of stakeholders. They have a history of cooperation and pragmatic problem-solving. 
  3. A need for experimentation with new governance models. Traditional models of state-based global governance have struggled to advance effective solutions to many global problems, so there is an urgent need to experiment with new models. The GPM is the most promising. 
  4. Digital networks. Online collaboration technology makes it possible to operate a largely virtual parliament that would not only be more cost-effective, but more transparent, inclusive and productive.
  5. Digital citizens. There is a large, educated and motivated population of digital citizens that could be tapped to improve urban governance.

  In principle, I agree with the direction. And I feel that way because of the two major shifts outlined above: More people are living in cities (a trend that all urbanists talk about ad nauseam) and digital networks are having a disruptive effect on the way we run companies and live our lives.

  I’ve talked before about how the internet is causing a decentralization of value creation (see Airbnb, YouTube, and so on) and so I think it only makes sense that our governance structures will inevitably go through a similar transformation.

  The governance models that we are living with today were put in place during a time when the world was a different place. At one point, nation-states were the de facto way to effectively organize ourselves on a global stage – probably because there wasn’t any other reasonable alternative.

  But today, we are connected and interdependent in entirely new ways. And so the opportunity in front of us is to create a governance structure that leverages the progress and innovation that’s happening in cities, everywhere.

  If cities are our most important economic unit, then mayors are arguably some of our most important leaders. So it behooves us to figure out how to give them the frameworks and forums to best do their job.

  2014.08.13