The great innovative power of crowded streets

Ed Suominen / Flickr

The more connected a city, physically and digitally, the more inventive it becomes.

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Great cities promote social interactions, both planned and spontaneous, through inclusive policies and attractive public spaces. Across history, when diverse sets of people have clustered together in urban areas, the result has been spectacular innovation. That’s been from the design of ancient monuments to the creation of modern patents.

Part of what makes cities such powerful engines of innovation is the exchange of ideas that occurs face-to-face at the street level. People bump into each other and trade thoughts. Those thoughts evolve into newer and better technologies. Those advances reach more companies, whose employees each hit the streets with their own ideas. And so on with the intellectual explosion.

You might think this sort of sidewalk innovation would be confined to a specific industry, a la Hooli stealing Pied Piper’s compression algorithm in “Silicon Valley.” But a new analysis suggests that’s not the case. In a new paper in the American Economic Review, a trio of business scholars report being the “first to document” a clustering of invention across a range of industries in a single metro area.

In other words, cities don’t just boost innovation in a particular specialty field — they boost innovation, period.

For the study, the researchers mapped patent authors to their home counties and metro areas across the U.S. from 1976 to 2008, with a focus on the Bay Area. During that time, the Bay Area’s share of all U.S. patents soared from 4 to 16 percent, despite only a slight relative rise in its population. (The Bay Area surpassed New York as America’s top patent creator in the mid-1990s.)

(Via Forman et al. 2016, American Economic Review)

They found that patents related to information and communication technology (ICT) did increase the most. That’s to be expected from a metro area that includes Silicon Valley. But patents in five other classes also spiked in the Bay Area during this time, including those related to chemicals, drugs and medicine, and mechanics.

Some of these non-ICT innovations still clearly have information and communication technology to thank. The researchers found a rise in non-ICT patents that cited an ICT-related patent — evidence that non-ICT inventors have adapted ICT work for their own purposes. Most impressive of all, even patents showing no relationship at all to ICT increased their share over that time.

The researchers conclude (my emphasis):

We have documented an increase of the fraction of US patenting of all kinds that occurs in the Bay Area that is disproportionate to population growth and occurs within a variety of patent classes. This partly results from the agglomeration of invention near the production of firms who use the invention, and who themselves agglomerate in one area. We also think it offers evidence of coagglomeration, the clustering of invention from many distinct types of invention into one geographic area.

While coagglomeration may be a new empirical insight, the source of knowledge spillover in cities is no mystery: it’s packed sidewalks and personal interactions. More consumers, colleagues, and competitors in a given location mean more opportunity for entrepreneurial risk, work specialization, and idea theft. A 2012 study by Wei Pan of MIT found that “social tie density” explained the explosive patent creation and economic growth found in U.S. cities.

[A]s a consequence of proximity and easy face-to-face access between individuals,” Pan and company wrote, “communication and ultimately productivity is greatly enhanced.

Combined with people-first street policy, technology can unleash the urban social interactions that give rise to this great intellectual energy in countless ways. Free public Wi-Fi kiosks and park reservation systems can draw people outdoors for business or leisure. Outcome-based building codes and sensor technologies can encourage mixed-use, walkable development that gathers many minds in one place. Shared autonomous taxis can reduce the need for parking, freeing up room to be rededicated to public space.

The more connected a city, in both physical and digital senses, the better for all.

This post was originally published on Medium.

May 23, 2016