CityReads | How the Innovation Complex Has Changed Our Cities?

295

How the Innovation Complex Has Changed Our Cities?

The city’s innovation complex is the “next act” of global capitalism.

Sharon Zukin, 2020. The Innovation Complex: Cities, Tech, and the New Economy, Oxford University Press.

Sources: 

https://global.oup.com/academic/product/the-innovation-complex-9780190083830?cc=ca&lang=en&#

https://blog.oup.com/2020/03/how-new-york-city-became-a-technology-hub/

Recently in New York, as in other cities, the coronavirus pandemic has spurred an urgent shift from working in offices to working at home and given a massive boost to digital platforms for telecommuting, teleconferencing, and online teaching. Yet the tech industry has also generated some of the most significant spaces for face-to-face interaction of recent years. These are the hackathons, meetups, startup accelerators, and innovation districts that make up a globally hegemonic innovation complex.

As the second-largest startup ecosystem in the world and a superstar city of jobs using digital technology, New York hosts many of these spaces. Numbers vary according to who is counting, but both city government officials and organizations that represent the tech “community” claim the city has more than 9,000 startups and between 150,000 and 300,000 tech workers, half of whom work in non-tech companies. There are 70 tech accelerators, some specializing in fields like health or finance, 44 coding schools, and more than 500 programs for tech training and education. While Big Tech titans like ‘Amazon, Google and Facebook’ are expanding their footprint in Manhattan, each by one million square feet, a recent study showed the Brooklyn waterfront to be the second fastest-growing “innovation economy” in the United States.

How New York become a city of the innovation complex? This is one of the questions that Sharon Zukin, an urban sociologist at Brooklyn College and the City University of New York Graduate Center, attempts to answer in her new book, The Innovation Complex: Cities, Tech, and the New Economy, published in February 2020. Having interviewed with over 60 venture capitalists, startup founders, and economic development managers to explore the world of hackathons, meetups, accelerators, and innovation districts, Prof. Zukin explains how New York has become a supercity of the tech economy, presents a critical first look at urban economic transformation in the digital age, shows how the startup economy, tech ecosystem, and politics of innovation really work, and connects actions of government, business, and universities to expose the powerful underside of the new urban economy.

Here are some excerpts from the book.

Cities today are crucial sites for both the creation of—and resistance to—a powerful interplay of land, labor, culture, and capital that forms the base of the new economy: the “innovation complex.”

The new economy has material as well as symbolic dimensions. On the material side, city leaders build multiple sites or “complexes” of buildings for technological innovation to occur; symbolically, they manifest a psychological “complex” or cultural anxiety about controlling innovation without losing power. They are following the modern narrative of economic growth: with government support, new ideas thrive, businesses invest, and jobs are created. These “fictitious” expectations allow them to imagine a landscape of innovation where everyone prospers.

The reality is riskier and more complex. Under the radar, the city government plays a major role. It subsidizes business investment and specialized education so that tech companies will create jobs. It sets up tech hubs and innovation districts for real estate developers to thrive. And it deals with tech-related “disruptions” in local markets and communities: ride-hailing services and short-term housing rentals, self-driving cars and electric scooters, and collection of private data by companies that offer “smart city” gear. Even if they try to ride the tiger of digital innovation, mayors are held in thrall by a larger context: the reshaping of global capitalism.

Local lives and fortunes are inextricably linked to global capital. You see this best in big cities like New York that have emerged as “superstar cities,” centers of the new economy. In these cities, startups bloom, jobs of the future multiply, and a meritocracy trained in digital technology, backed by investors who control deep pools of capital, forms a new, tech-financial elite. But you must know where to look for it. Significant individuals whose names you don’t know and events you’ve never heard of are claiming influence, forging the rules, and shaping the mindset of a young generation.

This connection may remind you of the power elite, the term coined by the mid-twentieth-century sociologist C. Wright Mills to describe a new, unified structure of individuals at the top of business corporations, government, and the military—a structure broader in scope, more deeply embedded in national institutions, and more powerful than any local rulers and influencers in history.

For Mills, the power elite that developed in the 1950s, after World War II, responded to the risks of all-out nuclear war and the riches of national markets. Today, a similar elite, based in the ranks of the tech industry and among financial investors, responds to the risks of all-out economic competition and the riches of global markets. Operating through public-private-nonprofit partnerships, a tech-financial-governmental elite and its related meritocracy are remaking cities for a new age of global capital.

The more successful the innovation complex, the less livable the city becomes. One reason is that private investors reap most of the rewards. They justify their gains because of their willingness to take risks. Yet, as the economist Mariana Mazzucato says, while governments deserve both moral credit and financial rewards for backing innovation, private equity managers and venture capitalists get too much of both. The great wealth amassed by these investors, and by startup founders and early employees who cash out their equity in an initial public offering (IPO) or sale, floods the city’s housing market. Land values rise too high and too fast for most of the “native” workforce to afford to live there

Time after time, we see city governments that are unable or unwilling to capture enough of the financial rewards of innovation to pay for an adequate supply of affordable housing, a smoothly functioning mass transit system, and equitable public schools. At worst, the investment boom in a city’s startup ecosystem depends on an unsustainable bubble of real estate speculation, financing by sovereign wealth funds, and visa programs for overseas investors.

Yet, in the past few years, the public has awakened to the yawning gap between the wealth of tech titans and workers’ economic insecurity, and between the power of social media platforms and users’ exposure to risk. Awareness of the dark side of the innovation complex has stoked resistance.

With its expansive resources and equally outsize liabilities, New York offers a key testing ground to use innovation for the common good. To begin, we must look at how the innovation complex has been built in that city, brick by byte, since the economic crisis of 2008. For this I offer both a layered history and a critical interpretation, showing how a new economy is put in place, reshaping the city in our time.

As centers of power, cities mobilize economic resources and turn them into investments on a grand and even global scale. First in factories, then in skyscrapers, and now in incubators, accelerators, and coworking spaces,

cities literally put in place new ways of organizing production. At the same time, as centers of culture they create new ways of imagining, justifying, and adapting to these changes—and often resisting them as well.

Today’s city visionaries and elected officials imagine a landscape of innovation where technology creates new digital platforms, marketable products, and—most important for politicians—jobs. They hope this imaginary will drive an urban renaissance.

Renaissance is an apt metaphor for these changes. Imagining innovation, at least in the West, is rooted in the cultural Renaissance of fifteenth-century Europe. In the city of Florence at that time, aristocratic patrons recruited talented artists and supported workshops that created projects of staggering originality. The combination of disruptive genius and collaborative production elevated the city to be the cultural capital of Europe in that time and a world capital of art history.

Half a millennium later, the imaginary of innovation conjures up another archetypal time and place: Detroit in the early 1900s, at the dawn of the modern industrial age. Bicycle, carriage, and wagon makers clustered in the city, creating new products—automobiles—and building factories to make vast numbers of them. The combination of original design and assembly-line manufacturing transformed a small Midwestern city into a world capital of mass production for more than fifty years, from the era of Henry Ford to his postwar heirs.

Most important in the twenty-first century, though, is a more recent time and place where innovation bloomed: the threshold of the post-industrial age, between the 1950s and the 1980s, when engineers, investors, and entrepreneurs from Bill Hewlett and David Packard to Steve Wozniak and Steve Jobs merged ideas and capital in electronics workspaces in northern California. This hive of experimentation and collaboration near Stanford University grew into the hegemonic hotbed of technological innovation called Silicon Valley.

What cities are envisioning today is nothing less than the urbanization of Silicon Valley, an imaginary based on placing new digital technologies in dense, strategic clusters, creating new cultures of innovation and production, and capturing the economic rewards.

All cities share this vision. Within each of these cities—and in nearly every other big city around the world—businesses, elected officials, and real estate developers are building “hubs,” “ecosystems,” and “habitats” for innovation. In the global toolkit of a newly charismatic capitalism, “innovation” is both a rhetorical device and an operational mode, an irresistible and apparently inevitable strategy for cities facing an uncertain future.

The term innovation became popular in the 1940s, when the economic historian Joseph Schumpeter used it to describe entrepreneurs’ uncanny ability to take advantage of a new technology or new conditions to reorganize production. But its meaning has changed since then. In the early twenty-first century, the cultural historian John Patrick Leary points out, the term is not only a recognition of but a capitulation to “the dynamic turbulence of the capitalist marketplace.” The pervasiveness of innovation discourse—and the spread of innovation spaces— testify to cities’ nagging anxiety that they may not be able to weather this turbulence.

There is plenty for city leaders to worry about: their businesses won’t survive against global competition, their quality of life doesn’t attract the right “talent,” their failure to generate entrepreneurial startups will cause investors to pass them by for more dynamic places. Pressed by these concerns, city leaders develop a two-sided “innovation complex” that is both instrumental and ideological. They build multiple sites or “complexes” of buildings for innovation to emerge, and they manifest a psychological “complex” or cultural anxiety about technology and power. Shared by cities as different as Shenzhen, Copenhagen, and New York, the innovation complex reinforces global capitalism’s power. The innovation complex is fueled by both crisis and growth.

I aimed to follow in the footsteps of Margaret Mead and C. Wright Mills, towering figures of mid-twentieth-century anthropology and sociology who strove to understand cultures and social hierarchies and interpret them to a broad public outside of academe in terms of larger structures of meaning and power. But I have kept my focus on telling a story about culture and power: how the culture of a new post-industrial economy is put in place in New York and how these processes join different kinds of actors, in different circuits of capital, in a shared pursuit of power.

As an admirer of Mills, I tell a story about how tech shapes, or reshapes, the city’s “power elite”: the group of allies, collaborators, and often also opponents that makes the most important decisions about land use and economic development. Although they don’t plan economic development with the force of, say, the government of China, this loosely bonded group of people in top institutional positions connects the most important spaces in the city where the innovation complex is imagined, located, and funded. Their collective strategies flow through partnerships that link the public, private, and nonprofit sectors. Within this framework, I document how a tech “community” forms, develops a common identity and interests, and advocates for those interests in public arenas. I connect these changes to the geographical spaces of cities, organizational spaces of contemporary capitalism, and discursive spaces of the innovation economy.

Each chapter examines a production space where cultural forms and economic norms are enacted, performed, and put in place. In these processes, the whole innovation complex—buildings, districts, and the city as a whole—develops scale, shape, and meaning. Readers may not be familiar with the places they visit in this book. But it is important to know them because they create a spatial imaginary and a social narrative that shape the way the builders of the innovation complex see the world.

The chapters move from smaller to bigger spaces, beginning with a hundred people writing computer code on a Saturday morning at a hackathon in DUMBO. After the hackathon, the narrative scales up to eight hundred people watching demos at a monthly tech meetup at NYU. The narrative continues with accelerators, that work as both a laboratory and a training school for startup founders who have already raised some investment capital. The story of the innovation complex then moves into the offices of venture capitalists. The next chapter scales up to the North Brooklyn waterfront, where fifty thousand people work in tech and creative offices and advanced manufacturing facilities. The last space in the innovation complex is both institutional and metaphorical. It’s the set of educational “pipelines” that form a new tech-financial meritocracy. The final chapter focuses on conflicts between the innovation complex and the city’s embedded industries, existing land uses, and long-standing political alliances.

I ask different questions: How does the “comprehensive infrastructure” of a new economy based on digital technology emerge? How does the innovation complex change the cities in which we live?

The halo of innovation numbs us to its social costs and blinds us to how technology is used to pull the levers of social change.

Innovation is a political category. In today’s “global economy of innovation,” two prominent researchers say, “a small number of actors who can credibly claim insider knowledge of ‘best practices’ wield disproportionate power.” These actors are the companies, organizations, and people who put the innovation complex in place.

The city’s innovation complex is the “next act” of global capitalism. It moves in ever-widening circles from local to global scale, from technology, money, and jobs to culture, politics, and society at large. Although today’s new economy is called a digital age, it’s a unit of space as well as of time, an empire of organizations, discourse, and physical places. Like other capitalist empires, this one has scaled worldwide.

Today the cultural hegemony of “Silicon Valley” is both urbanized and globalized. The same startups and incubators, deploying the same narratives and aesthetics, and often funded by the same investors, are everywhere. Just as earlier networks built modern cities’ railroad stations, subway lines, streetlights, and sewers, today’s innovation complex is emerging, brick by byte, in cities all over the world.

This does not happen without conflict or contradictions. The new infrastructure challenges but also depends on and ultimately merges with the city’s existing power structure. Whether we call this assemblage a “triple helix,” a “growth machine,” or a “power elite,” it melds a tech meritocracy, moneyed investors, elected officials, and real estate developers into an alliance of self-interest that shapes the new economy on the ground.

Related CityReads

（Click the title or enter our WeChat menu and reply number ）

CityReads ∣Notes On Cities

"CityReads", a subscription account on WeChat, 

posts our notes on city reads weekly. 

Please follow us by searching "CityReads"