I’m at the Living Cities 20th Anniversary today, liveblogging on the discussions that panelists are having here. This post, a little out of the vein of the topics we typically talk about at Market Urbanism, originally appeared at Next American City. Steven Johnson and Paula Ellis, of the John S. and James L. Knight Foundation, discussed some of the themes in his new book, Where Good Ideas Come From: The Natural History of Innovation, including the unique environment for innovation that cities provide. Johnson draws on the work of Jane Jacobs and Geoffrey West to demonstrate that innovation is most likely to happen in places where humans are densely clustered because entrepreneurs rely on the work of others. Both to see through the uncertainties of the future to realize profitable ideas, and to overcome the challenges of product development, entrepreneurs need to live in urban areas. Johnson began his conversation explaining that many of the ideals that emerged in the Scottish Enlightenment came out of coffeehouses, through the spontaneous conversations that many brilliant men had, and the evolution of their ideas in this urban space. Looking back to these Enlightenment ideals, we can see that Adam Smith, perhaps one of the original urbanists, explained that the division of labor is limited by the size of the market. Continued urban growth provides individuals with growing opportunities to specialize, as both the consumers and technological developments that fuel the market process are consolidated in the same place. In West’s work that Johnson referenced, he explains that, unlike firms that become increasingly bureaucratic and inefficient as they grow, cities continue to become more productive as they grow in size and density. As Johnson explained, cities have a “liquid property because they have the convergence of diverse people sharing a space. This is an incredible asset.” […]

I’m at the Living Cities 20th Anniversary today, liveblogging on the discussions that panelists are having here. This post, a little out of the vein of the topics we typically talk about at Market Urbanism, originally appeared at Next American City. Patrick McCarthey of the Annie E. Casey Foundation articulated one of the missions of the Living Cities collaboration as helping Americans in the bottom 40 percent of the income distribution. As the collaboration seeks to help cities develop, it also seeks to improve the development of human capital in these communities. To this point, Dudley Benoit of JP Morgan Chase suggested that improved efficiency in capital markets is key to achieving this goal. While microfinance has flourished in developing countries, investors have not been as eager to provide small loans to small businesses in the United States. While philanthropic organizations focused on community development have often focused on the making top-down improvements to the physical landscape of urbanities, Benoit brings up that the human capital that allows cities to facilitate economic innovation is more important than their physical components, and that economic development must be a bottom-up process. Living Cities’ President and CEO Ben Hecht points out that no one individual can solve the problems that a city poses – as Jane Jacobs and Friedrich Hayek both identified, complex human systems must draw on decentralized knowledge that cannot be centrally compiled. Access to capital for urban entrepreneurs is essential for the economic rebirth of cities that Living Cities fosters.