News David McWilliams

Thursday 21 August 2014

Capital needs an elected mayor to act as a playmaker in the economic World Cup

Published 02/07/2014 | 02:30

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'We need someone pulling the strings, setting out the vision'
'We need someone pulling the strings, setting out the vision'

Ireland is involved in a competitive fight with the rest of the world, for every piece of business, all day, 24/7 in every market. Unless we appreciate this, we will not create the right environment to foster companies that can design products that are good enough to sell for a profit.

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Watching the World Cup made me think of how similar global economics is to sport. If you want to compete with the best, you have to aspire to be the best. The teams that progress are playing the game at an intensity rarely seen before, but it is not just about intensity and fitness levels, it's also about creativity, guile and subtlety. It is about playing to your strengths and preventing the opposition playing to theirs.

Companies are involved in a similar struggle and so, too, are you. If you are not aspiring to be the best at what you do, a combination of technology and competition will cut you down. The same goes for companies and, ultimately, for countries, regions and cities.

Without economic profit, without being able to sell your services for a profit, the region where you live will not be able to generate the revenues to pay for the hospitals, schools and safety net people aspire to. We can't go on like Ireland indefinitely, borrowing and thus enjoying a lifestyle that is rented not earned.

Central to this idea of sustainable prosperity for all is productivity for all. That means producing better stuff per hour worked than your competitors do. This means being innovative. It means coming up with products that are better. It implies undercutting the existing players, deploying disruptive technology which makes their products obsolete or, better still, create a demand that was not there before.

In order to do this, you need the type of people who want to take risks. You need the people who don't want a wage, an insurance policy, who don't necessarily think their job is good because it has a permanent pension. These type of people are not everywhere, and it is not for everyone, but without the people who want to build companies you simply have no economy.

Government can't do this. It can foster the environment which may be conducive to these type of people but it can't do it. Encouraging self-starters doesn't mean anything as idiotic as suggesting there is no role for the public sector, it simply means working together.

The State is crucial. After all who created the Internet? The American military did, financed by the tax dollars of millions of ordinary people. The chief R+D agency of the US is not Silicon Valley, but it is the US government and the millions of bright American students who are educated in the state system, who drive on state roads, who breathe fresh air guaranteed by state legislation on the environment. I could go on but you get the point.

Where is this innovation and creativity happening?

It is happening in cities in what the Americans are now calling "Innovation Districts." I have just read a very interesting paper by Bruce Katz at the Brookings Institute in the US. Katz is one of the foremost experts on how cities pick themselves up off the deck, dust themselves down and re-emerge in this new technological age stronger than ever.

I was lucky enough to hear him at the Dalkey Book Festival where he suggested that, contrary to much local opinion, a town like Dun Laoghaire could be on the cusp of a brilliant regenerative spell.

His angle on cities is this: that if we look around the world from Barcelona, Montreal, Stockholm, Pittsburgh and even Detroit, we are seeing a new type of industrial hub emerging which is in the old city districts, well connected by rail and buses, where people can live, love, work and hang out with each other, these are the districts which are thriving. Silicon Valley is not the future; it's the past. The notion that we'll drive out to a new suburb like Silicon Valley in the future, even if it is beside a great university, is passé.

The Americans are talking about an "anchor-plus" model of development in an innovation district. The anchor in this case is a well-recognised name such a Google or Facebook. Around these anchors, smaller companies can set up, many initially sell their services to the anchor tenant. As the large anchor employs people, there will be a market for the right sort of people and this will of itself attract more people of the same outlook. This is what Dublin's Silicon Dock is all about. But we are in competition with other cities.

Take Detroit, for so long the dystopian landscape of Eminem's angry rap; once the wealthiest city in the US now shorthand for decay, with some suggesting it was "a microcosm of everything that is wrong with America".

But Detroit is moving again. For example, this city of just over four million had a GDP of $220bn (€161bn) for 2014, greater that Ireland's total income, one year after the city declared itself bankrupt, defaulting on its municipal debts – the biggest bankruptcy in American municipal history.

Detroit is now emerging as a competitor to Dublin. Like Dublin it is host to a whole range of companies in emerging technology fields, such as life sciences, R&D, IT and advanced manufacturing. Michigan State has over 568,000 high-tech workers, including 70,000 in the auto industry. The mini-boom in Dublin's Grand Canal Dock mirrors that of Detroit's downtown area – home to the likes of Google, IBM, GM, GE, Verizon, JP Morgan, Bank of America and KPMG.

So, Dublin has to keep doing the right thing. This is why it needs a directly-elected mayor with executive powers to run the city. It needs someone who gets up in the morning and is thinking about the city when he or she is brushing their teeth. Without someone putting the city first, and understanding that cities drive economies not the other way around, Ireland will slip backwards again.

We are in an economic World Cup competing to be the best. We need someone pulling the strings, setting out the vision and taking responsibility. A city with a powerful mayor is like a team without a brilliant manger. Can you imagine entering the World Cup without a manager? Need I say more?

www.davidmcwilliams.ie

Irish Independent

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