The clout of innovation hotbeds in a handful of cities is a dilemma for companies and countries that continue to embed their talent inside suburban industrial parks. Old silk road cities like Persepolis have long had an outsize influence on the global economy. But today the impact of top talent clusters like Boston is particularly pronounced. Following the money running after unicorn start-ups (those with billion dollar evaluations) and venture capital investments is a tour de force of a concentrated innovation geography of talent hotspots like New York, San Francisco, Hangzhou, Seattle, Shanghai, Los Angeles, Chicago and London. Firms in these cities are mining narrowly defined niches to produce phenomenal growth.
Twenty years ago, inventors in the top ten cities accounted for less than half of the patent applications filed by America’s 50 largest companies and most of the innovations happened inside corporate laboratories in smaller cities. In 2017, creatives working in the world’s top ten cites accounted for seventy per cent of the Fortune 50’s patent filings. This shift is reflected in the displacement of legacy companies in the Fortune 50 by up-starts like Alphabet.
E-commerce remains a fresh frontier and to hold a pole position, Walmart Labs moved to San Francisco to focus on advances in voice-enabled shopping and crowdsourced delivery. The packaged foods manufacturer Conagra, relocated to Chicago to attract brand-building talent from among Millennials wanting to work in hip downtown locations with sleek new offices, not aging suburban complexes that offer attractive parking.
The agile team methodology rollout at ING Netherlands that supplanted its industrial age organization structure went even deeper. The bank redesigned the built environment. The open floor plan had absolutely no offices for anyone- not even the CEO. The outcome is a fresh team spirit where talent flourishes and flows from the floor. At the time of the restructuring, ING was both profitable and stable. Nothing was broken. Nothing needed fixing. But, to refresh everything and to realize its fullest potential, the bank’s corporate immersion sessions at Spotify, Netflix, and Zappos created the mind shift that allowed them to craft a forward looking strategic nimbleness.
Vodafone takes this ING “agile lite” and “talent thick” model deeper. Every year 250 of its top employees are invited to London for a three-day training session. They are introduced to cutting-edge expertise mastered by its top 50 front-runners during Vodafone’s external executive immersion. To keep the top 50 leaders on the cutting-edge, Vodafone pairs each forerunner with a young “digital ninja” who provides mentoring and oversees the migration of innovations at viral speed. Vodafone believes that good ideas are worth spreading. So it incorporates the budding technology trends it has identified as useful to its purposes into personalized learning programmes which are then delivered to its staff on its digital Vodafone University platform.
Vodafone is not waiting for universities to output graduates to write the future of the firm. They have moved education and skills training out of the university lecture theatre into the workplace. At Vodafone, lifelong learning is now part of the future of work. The retooling of its workforce inside the workplace is knotted to appraisals, promotions, increments and bonuses. At Macy’s, a simple adaption to agile-work is the use of “spot bonuses” that recognize contributions as they arise. Rewards are not deferred.
The World Bank Policy Research Working Paper No. 7852 points to a global distribution of talent that is indisputably uneven and unequal. It also points out that the asymmetry is worsened by the variable resources available in each country to nurture the talents of their best and brightest. Human mining and migration of the brilliant tilts the deck even further.
Critical to the development of companies in newly industrialized economies and emerging markets, including the CARICOM single market economy, is the nurturing of capacity to navigate the tangled web of global talent flows. Firms on the periphery will perish if they can’t have access to intelligence from innovation hotbeds, innovation districts within cities and talent hotspots. The global competition for talent will continue to be fierce into the future and will remain unequally distributed. Stark inequalities in the concentrations of talent across regions and within cities will not vanish.
About three per cent of the world’s population lives in a country different from that of their birth. In 2013, one‐eighth of the total STEM employment in the United States resided and worked in Southern California, Silicon Valley and New York. In the same year, 56 per cent of these STEM workers and 70 per cent of software engineers in Silicon Valley were foreign born. London, New York, Paris, and Milan continue to maintain their positions as global capitals of finance and fashion.
Corporate venturing by setting up outposts in these talent and technology rich cities that display amazing levels of tolerance for diversity resulted in thirteen per cent of patents of large US firms upwelling from cross-border collaborative teams.
It is critical for companies in newly industrialized countries to have a presence in innovation hotbeds like San Diego and the narrow innovation districts in other cities to guarantee a better vantage point on advances along frontiers.
