TY - JOUR
AU - Indergaard,, Michael
AB - Abstract This article develops the concept of the “developmental network city” (DNC) to link the literatures on neo-developmental states and urban economic innovation. Applying the developmental network state (DNS) model to the case of New York City, it shows how the American DNS contributed to the rise of a New York DNC, which features localised discovery and governance. Most important here was that New York’s developmental agencies created a knowledge economy alternative to the “global financial centre” path by selectively adapting DNS ideas and resources to fit the city’s landscape of applied innovation. industrial policy, city economies, innovation, New York City Introduction In the wake of the 2008 financial crisis, two spatial trends in socio-economic organisation are coming together in the global economy. On the one hand, national governments and the EU are supporting innovation-based industrial policy. For example, the Obama Administration undertook historic initiatives in alternative energy, advanced manufacturing and smart cities; the EU has created Smart Specialisation strategies for regions; the UK is embracing industrial policy; and a “Made in China 2025” strategy aims to make China the leader in artificial intelligence (AI), robotics and advanced manufacturing. One the other hand, researchers report that cities such as New York, San Francisco, London, Vancouver and Singapore (Hutton, 2008; Scott, 2010; Storper, 2013) and global cities in general (Kratke, 2011; Wolfe, 2016) are taking knowledge economy roles as they become the frontlines for developing applications of technology. Yet there is little understanding of how national industrial policy and urban innovation intersect. A literature on neo-developmentalist states is changing views on what industrial policy might do in developed nations seeking to revitalise old industries and generate new ones (Bailey et al., 2015b). The idea that states can help direct change has rebounded since the Great Recession, although governance models have shifted from the top-down model of developmental states towards more decentralised forms. Decentralised systems have helped generate new industries (for example, software, biotech, telecom) in small developing nations such as Ireland (O’Riain, 2004), Israel, Taiwan (Breznitz, 2007), Denmark and Finland (Ornston, 2012). In the USA, a “developmental network state” (DNS) (Block, 2011; Block and Keller, 2011) supports many approaches to solving cutting-edge challenges. This multiplicity of developmental pathways is consistent with influential models of “recombinant innovation”, where existing combinations of technological elements are reassembled in new ways (Brynjolffson and McAfee, 2016; Hargadon, 2003). Finally, context is crucial for how different agencies embed themselves in their societies and the developmental paths that result (Breznitz, 2007). There are hints that cities have a role in the US system, but that remains unstudied. That is a serious gap since cities are distinctive contexts for innovation and for creating developmental pathways. In fields such as economic geography, a critical question is what sorts of cities are, or could become, innovative enough to weather assorted challenges. That raises issues about capacities for adaptability, such as the ability to change paths of economic development or add new paths (Sunley et al., 2017). Only some manufacturing cities have been able to upgrade their industries (Kratke, 2011), while a relatively small number of large cities have become global knowledge economy centres (Wolfe, 2016). Some have proposed that national governments influence the development of innovative urban economies (Wolfe, 2016). Yet there has been little more than passing comment by researchers (for example, Storper, 2013; Storper et al., 2015) or policy analysts (Katz and Wagner, 2014; Mulas and Gastelu, 2016). We offer a case study of the impact of federal innovation-based industrial policy on New York to bridge gaps in the theoretical literatures. It is reasonable to think that the American DNS has embedded itself in New York’s economic and research base, and that New York’s own developmental agencies have done the same. That poses a problematic of double embeddedness. How do the two systems interact? Is the city a developmental programme implementer or is it limited to adjunct roles in the national system? We use the NYC case to show that there are multiple possibilities. We deem NYC a developmental network city (DNC) because it directly implements programmes that create decentralised networks. The next two sections examine the literatures on neo-developmental states and urban economic innovation so as to inform our DNC model and methods. That is followed by two segments on DNS initiatives in NYC and evolving DNC roles there. Three sections then explore the varieties of DNC embeddedness, real estate challenges to its autonomy and neighbourhood projects. We end with thoughts on an urban perspective for DNS work. Comparing forms of embedded autonomy The book Embedded Autonomy by Peter Evans (1995) underpins neo-developmental work by economic sociologists (Block, 2008, 2011; Block and Keller, 2011; O’Riain, 2004), political scientists (Breznitz, 2007; Ornston, 2012) and economists (Mazzucato, 2014; Rodrik, 2004). Evans argued that the success of East Asian developmental states was largely due to embedded autonomy. They were embedded through making ties to society that abetted information exchange and the creation of consensus; they had autonomy through internal structures that allowed them to develop and implement their own agendas. Yet, top-down developmental states are ill-suited for tech industries. New forms of embedded autonomy are warranted. New conceptions of embedded autonomy infused a series of studies on the ability of less centralised developmental states to generate tech industries, beginning with O’Riain (2004). With the exception of economists who stress selected policy mechanisms (Mazzucato, 2014; Rodrik, 2004), much of the literature (Block, 2008; Block and Keller, 2011; Breznitz, 2007; Ornston, 2012) follows Evans in showing how differences in state structures, politics and state-society relations bring varying developmental structures, strategies and outcomes. The latter sensibility drives the analysis of the highly decentralised US system by Block and collaborators. Their studies of diverse actors and programmes (for example, Department of Defense, National Science Foundation [NSF], CIA) reveal the potential of “coordinated decentralization” (Block, 2011, 20) where there is a multiplicity of organisational and governance arrangements. Decentralisation “is better suited to the unpredictable world of innovation…because it offers opportunities for multiple technical pathways to be pursued simultaneously” (Block and Keller, 2011, 28). The “overlap and redundancy” increases the chances that promising ideas will attract some funder (Block and Keller, 2011, 15). Yet, elements of centralisation remain essential, as federal agencies play four crucial functions in supporting innovation. First is “targeted resourcing”, where agencies often bring together actors to do “road mapping” of problems to overcome in commercialising a technology (Block, 2011, 21) and provide resources to competing groups with promising solutions; agencies distribute information among the groups regarding what works. Second is “opening windows” for grassroots initiatives to apply for funding. Third is “brokering”, to connect different technologies or to link technologists with firms hoping to commercialise a novel product. Fourth is facilitation, which entails clearing obstacles such as a lack of particular skills, research facilities or other infrastructures (Block, 2008). The famed Defense Advanced Research Projects Agency (DARPA) pioneered these roles, which many federal agencies now use. However, diverse governance approaches have resulted. Federal R&D programmes are “spread across different agencies” and “often uncoordinated” (Block and Keller, 2011, 27). Block’s (2011) outline of the system’s structure hints at roles cities might play. One segment consists of university scientists whose work is mostly funded by federal agencies and networks of dozens of federal labs and myriad university-based centres that specialise in issues cutting across multiple fields. This research supports a second segment, which consists of firms seeking to commercialise technologies and networks of institutions that support them: tech transfer offices at federal labs and universities, local manufacturing extension offices and financing sources for startups. This second segment includes “an increasingly rich mixture of local, state, and nonprofit programs that serve as technology incubators providing a variety of services and supports for start-up firms” (Block, 2011, 18). The local here surely includes cities. Urban landscapes of innovation We need to sort out the actual capabilities and potentials that different types of cities have to participate in, or be helped by, place-based industrial policy (Bailey et al., 2015b). This article is concerned with the case of large central cities, which have innovation dynamics and possibilities not found in their regions. Some, but hardly all, are thriving in a “growing bifurcation of cities”, based on potential for learning and knowledge (Wolfe, 2016). Advantages that cities are assumed to have due to size, population density and geographic proximity (Glaeser, 2011) are actually conditional. Large size and density matter if they are associated with the presence of multiple sectors, which gives cities diverse prospects. Moreover, that can produce agglomeration based on urbanisation economies if there are institutional and relational supports for innovative collaboration. That such supports exist in a given city requires that geographic proximity has “triggered” other types of proximity there: cognitive, institutional, social or organisational (Ramella, 2016). That is problematic in manufacturing cities which formed around localisation economies in the past. They struggle to be innovative unless their specialisations are upgraded through ties to knowledge networks (for example, research institutes) and skilled workers, or they diversify. Some have done so (for example, Hannover-Braunschweig-Gottengen, Lyon, Barcelona, Nantes and Bologna) (Kratke, 2011). Such resources are plentiful in localisation economies found in other sectors and cities: high tech and software in the San Francisco area, film in Los Angeles, fashion in Paris and Milan (Scott, 2010). What distinguishes some cities is a growing interweaving of localisation economies with urbanisation economies. Cultural products, tech and business services now interact in New York, London, San Francisco, Vancouver and Singapore (Hutton, 2008; Indergaard, 2009; Pratt, 2009; Storper, 2013). This is abetted by global city agglomerations of finance and business services (Sassen, 1991), which create large pools of skilled workers and diverse, innovative firms (Wolfe, 2016). Importantly, these spaces of experimentation (Hutton, 2008) may spark alternative paths of development to that of global command and control (Kratke, 2011). In New York, the focus of tech industries is to “apply technology” to “advertising, media, fashion, finance and healthcare” (Bowles and Giles, 2012, 9). Like some other cities, NYC also hosts mixes of applied science, creative fields (for example, media, industrial design and graphic art) and specialised small batch manufacturing. A growing convergence in tech and content production creates hybrid firms, workers and products; commercialisation of innovation is closer to customers and other users (Katz and Wagner, 2014). Finally, the World Bank (Mulas and Gastelu, 2016) touts New York’s urban innovation strategy as a model, even to developing countries! There is a new urban innovation context and process. The developmental network city A useful point of reference for conceptualising how cities might become landscapes for developmentalism is recent efforts to envision how national industrial policies should incorporate cities in the UK. Bailey et al. (2015b) propose that a major challenge will be for national policy to find a way to spur localities to participate while allowing local actors and knowledge to inform the discovery process. A complementary analysis by Bailey et al. (2015a) asks how a governance system could create significant local roles in activating diverse actors in “networks of mutual dependence”. The first suggests “localized discovery”, the second implies “localized governance”. Might a DNS contribute to a city apparatus gaining developmental capacities much like its own? The NYC case shows there are multiple ways that the DNS might embed itself in a city’s economy and a city’s economic development apparatus may respond. The DNS supports research institutions in a city, but the city’s economic development agencies do not capitalise on this to fuel local economic development. Second, a city agency brokers more efficient ties between local actors and Federal funders (for example, the SBIR) or does some facilitation of gaps in infrastructure. Third, a city is a DNC, a direct program implementer for innovation endeavours that rely on decentralised networks within which it takes roles in targeting resources, opening windows, brokering and facilitation (Block, 2008). There are a multiplicity of localised discovery processes and governance forms, some of which are supported in various ways by the DNS and many of which are not. This study uses the New York case of innovation-based industrial policy to explore: (i) how the DNS influenced the rise of a DNC in New York, (ii) how the DNS and DNC compare and (iii) the consequences for development. Mixed methods were used to gather data. Documents about innovation policies and initiatives (many of them online) were collected that had been published by the Obama Administration and New York City. The study also draws on coverage of NYC initiatives by the business press (for example, New York Times, Crain’s New York Business). In addition, this study draws on 12 interviews conducted between 2015 and 2016 with strategic informants (for example, NYC economic development officials, incubator staff and manufacturing advocates). The study seeks to determine the impact of federal policy during the Obama era (January 2009–January 2017) on NYC policy by studying innovation strategies and narratives at both the federal and city level as well as federal funding in NYC. It analyses the governance structure for industrial policy that resulted in New York by examining the apparatus created by city government as well as sectoral initiatives (media, advanced manufacturing). The analysis of governance focuses on embeddedness with a tentative examination of autonomy. Embedding the DNS in New York Beginning with the American Recovery and Reinvestment Act (ARRA) of February 2009, the Obama Administration pushed the DNS into new territory with big funding increases, bold statements on the federal role in the economy and more place-based policies. Its 2009 innovation strategy (National Economic Council, 2009, 1) stated that the US government must develop a strategy to catalyse innovation. Stressing DARPA’s role in providing “the foundation for new industries like optical networks, super computers, and design tools for computer chips” (National Economic Council, 2009, 7), it justified the $787 billion ARRA as an “innovation” strategy: there was “over $100 billion in investments in energy, basic research, education and training, advanced vehicle technology … health research” and the like (National Economic Council, 2009, 8). A 2015 update stressed the development of “local and regional innovation ecosystems” (National Economic Council, 2015, 5) while the White House issued a separate call for Smart Cities ideas from cities. This resulted in $160 million for Smart Cities initiatives in 2015 and $80 million in 2016. Most R&D funding for New York went to green energy, life science research facilities and smart cities. The Department of Energy sent $123.5 million to city agencies for building retrofits, smart grids and solar projects (NYC.gov, 2018), while the National Institutes of Health (NIH) gave $45 million for four health research labs/centres and $40 million to make the New York Genome Center a national lab. Regarding smart city initiatives, the Department of Commerce gave $42 million to NYC for broadband projects, the Department of Transportation sent $20 million for a connected mobility project and the NSF provided $12.5 million for an advanced wireless pilot project. However, none of these initiatives sought to promote an immediate burst of local economic development around a R&D investment. A Department of Energy Regional Innovation Cluster competition that did have such aims spurred formation of a NYC coalition to collaborate with an upstate group to submit a clean tech proposal. It was unsuccessful, but many NYC participants said they wanted to continue. Obama’s Smart Cities call led Mayor de Blasio’s team to submit a neighbourhood innovation hub vision. Did anything come of all this? In the USA, the crucial issue is whether a city actively seeks to making something out of the DNS. NYC had failed for years to respond to flows of NSF and NIH funds to city medical research institutions, which at around $1.5 billion annually placed NYC second only to Boston among US cities. What was the effect of Obama’s discourse, which began well before the funding? Talk of innovation was in the air after the financial crisis. Obama’s words, however, had the weight of a forthcoming stimulus package that was expected to be near $800 billion, with epic R&D components. This was presaged before his 20 January 2009 inauguration, as his 8 January economic speech featured “a clean-energy economy”, infrastructure projects to “retrofit America” and efforts to “invest in the science, research and technology that will lead to…new discoveries, creating new industries” (Federal News Service, 2009, 4–5). The next day, his team released a document estimating that the stimulus would be $775 billion. New York’s innovation turn Facts from New York’s end add to the strong circumstantial case that the Obama strategy, and the existence of the DNS more generally, strongly influenced New York’s turn to innovation-based economic development. Before 2008, New York Mayor Michael Bloomberg had promoted market-oriented policy (for example, real estate redevelopment) and resisted demands for industrial policy from emerging sectors (Indergaard, 2009). But Lehman Brothers’ bankruptcy in September 2008 was a shock. As one of his top economic development executives recalls, “…we thought we were looking at the end of the world. It was unprecedented” (interview, 20 June 2015). The city expected that it would lose at least 300,000 jobs. A former consultant brought in to help rethink the city’s economic development strategies remarks, “It’s like Rahm Emanuel [Obama’s chief of staff] says, ‘never waste a good crisis’” (interview, 13 August 2015). As a top city development official, he played a lead role is shifting strategy towards innovation. A week after Obama’s 8 January 2009 speech, Bloomberg gave his State of the City address, declaring, “we’ve been pushing Washington to focus the federal stimulus on ‘ready to build’ infrastructure…they’ve finally come around” (NYC.gov, 2009a, 4). He reported that New York would grow “green industries” and “green jobs” by investing $900 million over the next nine years to “retrofit” city buildings with new energy systems; if New York “became the leading city in sustainability”, it could “become the global center for a host of green business” and “the Silicon Valley of Sustainability” (NYC.gov, 2009a, 5). In October, Bloomberg unveiled a project to invest in green buildings, he said would leverage “federal stimulus funds” (NYC.gov, 2009b, 1). Bloomberg’s acceptance of industrial policy was based on pragmatism, not conversion, and staff tasked with rethinking strategy started a process that would go in unexpected directions. That effort began in late 2008 as the city’s nonprofit development arm, the NYC Economic Development Corporation (NYCEDC), began to convene meetings of representatives from city industries. An EDC executive reports initially, “We were betting on entrepreneurship” (interview, 20 June 2015) to create startups that would retain “talent” displaced from finance. The EDC started to support development of “co-working spaces and incubators, early stage financing, community and talent-building”. Yet, the strategy soon moved towards innovation. “Cross-pollination between tech, nascent tech, and the legacy sectors. That is what we started to do in 2009”. The city still supported incubators, but now as parts of initiatives in media, clean tech, bioscience, advanced manufacturing and urban tech. In February 2009, the EDC launched an effort to upgrade NYC’s media sector (Media New York 2020). They convened media giants, startups, venture capitalists and universities to discuss challenges the sector faced and what should be done. The challenges turned out to be digitalisation, a shortage of software engineers and a need for a MIT-style Media Lab. A similar process was used to develop a 2009 NYC Green Economy Plan and to revise strategy. The ARRA strongly impacted early green economy strategy. The EDC executive who oversees the area recalls “The initial strategy in 2009 was very wide…there had been a lot of hope and hype. There was a lot of momentum, a lot of dollars flowing. Then federal level polices became to be slower to develop” (interview, 23 June 2015). He reconvened stakeholders, including some who had submitted the unsuccessful clean tech hub proposal; the group devised a 2.0 strategy that featured digital assets that could support clean tech development to meet city needs. “The EDC had a competition for Green 2.0, the digital side of clean tech to address urban challenges. The winning proposal became the Urban Futures Lab”. Thus, we see the outlines of a DNC forming. City officials in an economic development agency were taking the sort of roles performed in the DNS (Block, 2008): devising strategies after bringing sectoral reps together to map problems, leading the way in addressing obstacles identified and brokering collaborative ties between researchers and firms. Yet, there were differences reflecting the distinctive problematic of urban innovation. They opened windows through competitions whose main purpose was to build community: Big Apps for media, New York’s Next Top Makers, and similar small competitions in clean tech and bioscience. More importantly, mapping was revealing the serious difficulty in accessing “real” public spaces for collaboration, which is problematic in cities with high land costs. Thus, as part of its targeted resourcing the EDC offered Requests for Proposals (RFPs) to solicit competing plans for developing and operating collaborative facilities. What began with the New York Media Lab and Urban Futures lab was repeated numerous times and peaked with global competitions for an applied science campus and, more recently, a life sciences campus. The new developmental apparatus was built around the EDC, whose staff of 400 had helped with real estate projects and managed city-owned property. In 2010, it created a Center for Economic Transformation (CET). A top CET executive said its role is to talk with industry stakeholders and use other data to find out “What areas can be transformed only by our intervention?” (interview, 2 June 2015). By 2011, the CET’s mission was to help established sectors “transition to 21st century business models” and “attract and support emerging industries like bioscience, green services and technology” (NYCEDC, 2011, 17). To accelerate change, the CET saw a need to link firms with academics and reduce “barriers to innovation”, such as shortages of in “affordable space, training, [and] provision of capital” (NYCEDC, 2011, 12). There was a big barrier regarding the universities: elite research universities (Columbia and New York University or NYU) had done little to build local economic infrastructure around Federal funding (O’Grady and Bowles, 2009). A means to motivate them was unveiled in December 2010 when Bloomberg declared a global competition to find an applied science school that would be interested in building a New York campus. The city would supply a city-owned property and $100 million. The result was a flurry of proposals (27 institutions from seven countries) with the winner being a joint proposal by Cornell University (whose main campus was 240 miles away) and an Israeli institute. There was a bonus according to a CET director: without the competitive threat, NYC’s “other universities would not have readily expanded” (interview, 2 June 2015). Moreover, they were bridges to Federal resources, which was a pillar of the innovation strategy—according to the ex-consultant who helped develop that strategy. The reality of Cornell-Technicon is this…What makes that possible is the federal research dollars Cornell gets…The locus of innovation is still the federal government. I think they spend $100 billion on R&D each year. It dwarfs anything else in the world. But the trend if you look at where national labs were, research parks and universities, was in suburban locations…for whatever reasons, there is a trend of the locus of innovation moving to cities (interview, 13 August 2015). There is nuance in the DNS–DNC relationship, depending on whether a sector targeted by the DNC needs DNS research funding. “In cleantech, there is certainly a role for cities to come up with programs and platforms. But any major source of funding is the federal government”. Varieties of embeddedness The EDC’s ubiquitous presence might suggest that New York’s developmental system is more centralised than the DNS. In fact, New York’s DNC entails a multiplicity of city offices that embed themselves in a multitude of targets, which have resulting in the creation of many provisions for governance and discovery. This DNC is characterised by the varieties of its embeddedness. There are nearly a dozen city offices (including nonprofit arms like the EDC) that initiate development projects. Most are in the EDC, which reports to the First Deputy Mayor for Economic Development and a board of directors. The CET was under the EDC umbrella, as are eight current industry “desks”: (i) Creative & Applied Tech, (ii) Cybersecurity, (iii) Fashion, (iv) Food Manufacturing & Retail, (v) Healthcare, (vi) Industrial (that is, manufacturing), (vii) Life Sciences and (viii) Urban Innovation & Sustainability. Other offices include the Mayor’s Office of Media & Entertainment, the Mayor’s Office of Technology and Innovation and the Brooklyn Navy Yard Development Corp (BNYDC), which is a nonprofit that operates the city-owned Brooklyn Navy Yard (BNY). The BNYDC has a board and also reports to the First Deputy Mayor. The diversity of sectors and research institutions, governance arrangements and discovery processes can be seen in Figure 1. It allows one to compare two initiatives within media (New York Media Lab and Made in New York Media Center by Independent Film Project [IFP]) and two within advanced manufacturing (BNY New Lab and Futureworks). Figure 1. Open in new tabDownload slide Selected DNC Initiatives in New York City. Figure 1. Open in new tabDownload slide Selected DNC Initiatives in New York City. New York Media Lab Formed in 2010, the New York Media Lab is distinctive in being dedicated to the R&D needs of corporations, its formal governance structure and mechanisms for disseminating knowledge. The lab is a consortium of universities, led by NYU, Columbia and the EDC. A lab executive (interview, 3 August 2015) notes that NYU and Columbia responded with a joint proposal to the EDC’s RFP: NYU is the financial sponsor and hosts the lab. It is governed by an oversight committee composed of two representatives of NYU and one each from Columbia and the EDC. There are four other universities in the consortium. Member firms pay annual fees ($300,000, $50,000 or $25,000), based on which of three levels of engagement they seek. There are currently 20 firm members, including Hearst, Verizon, A&E Networks and Publicis. They may issue prototyping challenges, access information generated during lab R&D, attend roundtables on tech issues and sit on an advisory panel. The universities own the intellectual property created. The lab holds a large annual summit to publicly distribute R&D highlights as well as hackathons. Prototyping solves firm problems with devising applications of technologies such as Virtual Reality/Augmented Reality (VR/AR), AI and machine vision. The media lab executive sees the lab as “a connective tissue”. Regarding its role in local development, he says, intellectual property “is being created and commercialized. Industry is being transformed. There is a lot of growth in tech that is actually a conversion of what were once called media jobs”. He notes, “we aren’t like the MIT Media Lab”, which gets “tens of millions of dollars in government funding” and for whom “media is any interface between man and machine”. We “are closer to the media and communications industry as it exists in New York. Our curiosity is constrained by those stakeholders” and our “ecosystem is so much larger”. His firms are interested in “new understanding of technology, where things are going, access to talent and networking with each other”. He adds, “another thing driving this is their reliance on new tech firms. If Google or Facebook didn’t exist the old media firms would still be blood rivals. There is a much bigger elephant in the room now”. Employees of “Google, Yahoo and Twitter participate in our events”, but they “have huge R&D teams…different R&D problems”. Media firms are responding with “open innovation” and hiring those “who understand the startup ecosystem”. Thus, in 2016, the lab created a programme to spin off and develop startups from its prototyping teams. Made in New York Media Center by IFP The Made in New York Media Center by IFP was created in 2012 after the IFP submitted the winning proposals in response to a RFP, beating some 20 other cultural nonprofits. The centre’s goal is to bring together professionals from various media, tech and creative sectors to develop new forms of storytelling using various sorts of new media. It offers collaborative workspace, classrooms, conference rooms and a theatre. Class topics include writing for indie films, storytelling through use of VR/AR and do-it-yourself distribution, while events cover issues such as designing for the “internet of things”. Membership fees for workspaces range from $150 for “community workspace” (shared desk space, private networking events and access to experts in residence) to $450 a month for a dedicated space in the “incubator”, that also includes use of editing equipment and conference rooms. The experts help with legal matters, accounting, mobile strategy and interactive video. The centre holds Demo Days where a dozen or so incubator members can pitch their products or companies to venture capitalists, nonprofit funders, potential partners or clients. IFP is the centre’s developer and operator and the centre is supported by the Mayor’s Office of Media & Entertainment and EDC, while IFP partners include a tech training school, Verizon and a real estate firm that supplies space. Governance is by an advisory board representing the Mayor’s Office, media firms, digital tech firms, startups, filmmakers and other creatives. A centre executive (interview, 15 January 2015) says members are, “tech startups looking for money…freelance creatives such as people working in graphic design using multimedia…and creatives who want to be founders”. This is “a cultural institution that has an incubator” (the latter serves 70 people). Many events and classes are open to the public, which “allows us to recruit companies”. Our “core community are tech interactives” who worry about “a sustainable career” and defy classification. There is a lot of boundary-crossing, crazy category crashing…. A lot of coders define themselves as ‘creatives’…we’ve had a lot of debates about defining media creatives as entrepreneurs…We had clear subcategories at first—art, video, TV. But people who are here don’t identify with that. They are ‘makers’. The urban autonomy question One suspects the relational diversity examined above helps boost DNC autonomy in NYC. Following Weber, reducing dependence on any one relationship should increase one’s autonomy. The same could be said of advanced manufacturing initiatives (see Figure 1). There were over 600 workers at 100 small prototyping startups at New Lab, while the Futureworks Shops Network serves 20 maker startups and entrepreneurs a year. Together, the BNY and EDC’s Futureworks host three distinctive maker incubators, while the BNY hosts innovative programmes that reflect at least four different types of governance and discovery systems (Indergaard and Zukin, 2017). However, the autonomy of offices in advanced manufacturing is threatened by a distinctive urban power: real estate actors with monopoly-like control over land (Logan and Molotch, 1987), which is abetted by the lack of national control over land (Cox, 2017). Not only real estate’s power, but also its sensibilities—as embodied in some city staff—imprint Advanced Manufacturing initiatives and the BNY’s shift towards innovation. Real estate considerations dominate the account offered by a former Center for Urban Innovation (CUI) director who helped design the city’s 2015 manufacturing strategy (10 Point Plan). The plan’s three thrusts are: (i) protecting and strengthening core industrial areas, (ii) investing in the development of manufacturing and (iii) preparing residents for future manufacturing jobs. Planning was guided by “recognition that to have space for manufacturing you have to get more creative in how to finance” (interview, 5 August 2016). That is because “more and more [non-manufacturing] firms in Manhattan want to come here”, that is, to industrial areas. “They don’t want a cliché office”. Thus, the plan commits city land and $150 million to secure or develop manufacturing space. But devising this “industrial policy” suffered from the animus of other city agencies. There were a lot more eyes on it—certain agencies don’t support industry.…If we’re supporting industrial, it means we’re not supporting other things that they prefer …This softened what developed, contorted the outcome. Manufacturing advocates name the adversary as the City Planning Department, which they say embodies real estate interests and sensibilities. An advocate on the BNY board (interview, 2 August 2016) stresses the opportunities for manufacturers, many of whom have survived in the city through doing custom, flexible work. But “that would require a level of intervention… that City Planning is not ready to do for ideological reasons…The issue on the horizon is office development…Real estate is king”. Similarly, the director of a North Brooklyn industrial zone that is being invaded by creative and tech firms cites a lack of zoning enforcement by city planning staff who, “love the term, ‘best, highest value’” and reserve the “innovation” label for “tech or creative firms” (interview, 16 September 2016). It seems then, that real estate’s power shapes who and what is deemed “innovative”. Thus, it is prudent to associate manufacturing with technology and design, not only to upgrade their capabilities, but also to justify helping them remain in the city. The former-CUI executive notes that the de Blasio “administration” wants to generate “quality” jobs. “There is a perception that manufacturing is not in that mix. Everybody is into creative tech” (interview, 5 August 2016). Thus, “We’re now in this delicate place…a tipping point” where one needs to figure out how to upgrade legacy firms as well as support “a new generation of smaller companies”. She says, “Futureworks is a suite of resources and services to help both sides”. Makers are served by the Shop Network of a dozen prototyping centres and advanced manufacturing centre; Ops 21 uses the Industrial and Technology Assistance Corp (ITAC), which is a federal manufacturing extension service, and three university centres to advise legacy manufacturers on adopting advanced technology. “We are trying to help them think through a pathway of change”. Thus, city-owned land is crucial—for manufacturers as well as startups—that would otherwise succumb to real estate prices or agendas. That makes the city-owned Brooklyn Naval Yard (BNY) all the more significant. Responding to protests over his rezoning of industrial areas in North Brooklyn, Bloomberg spent $200 million to give the BNY a badly needed upgrading in 2006. It became the city’s flagship industrial park, a haven from real estate pressures for hundreds of small, flexible metal- or wood-working firms. However, Bloomberg told the CEO of the BYNDC that he would have to attract private funds for future redevelopment. Thus, he and his successor used BNY land to develop mechanisms to cross-finance space for manufacturers. Both CEOs had once worked for the EDC on real estate deals. Since 2010 these cross-financing schemes have intersected with the BNY strategic move to innovation. An ex-BNYDC executive recalls BNY buildings were “attractive to creative types whether artists, designers or makers” (interview, 17 March 2016). This new demand allowed the BNYDC to “leverage the rent roll”, for example, by renting part of a building to the private developer who devised New Lab. “At New Lab the idea is to bring together academic design…and marry it with creative makers”. Putting such a place in a refuge for manufacturing was possible because “definitions of manufacturing are changing… there has been a blurring of lines between these sectors because of computers”. New Lab firms use workers with skills in tech, applied science and industrial design to do prototyping. A BNYDC executive (interview, 21 July 2016) notes the strain with BNY’s traditional mission. We still want to be a path to the middle class and host the kind of firm which is doing the next big thing.…Manufacturing is changing…That means we embrace innovation, manufacturing doing tech and design…quality jobs for diverse people…Manufacturing is not the highest and best use…but from a social perspective it is desirable. Thus, he works with high schools and NYC’s programmes to expand his workforce development programme; it annually places some 400 people (many of whom are low income) in BNY jobs. There is a second cross-financing deal, where a site has been leased to private real estate firms to develop and operate: Dock 72, a 17-story, 675,000 square foot office building. It seeks market-rate tech and creative tenants from Midtown Manhattan. A third project, Building 77, is a million square foot building for New Lab graduates or BNY manufactures who can make their products. The BNYDC executive envisions a division of labour among the projects. When you go from prototyping to assembling work, you will do it in the Navy Yard… It’s especially good if someone with a successful project can make more things…Then we can keep entrepreneurs like Silicon Valley, Boston. Dock 72 too may benefit BNY tenants by providing partners or customers. At any rate, one expects more cross-financing along the lines of Dock 72. The BNY will grow the workforce from 17,000 to 30,000 by adding 5.1 million square feet of ‘vertical manufacturing space’. Out of the labs and through the neighbourhoods Mayor Bill de Blasio, after succeeding Bloomberg in 2014, called for innovation to be “inclusive”. When discussing what de Blasio could do, ARRA’s end was the starting point for an EDC executive. “What power and levers does a city have to affect income inequality? The federal funding is mostly gone. The main tools exclusively in a mayor’s control are the schools and the real property” (interview, 26 June 2015). In fact, a few months after this interview, Obama’s September 2015 Smart Cities call helped de Blasio envision another lever—urban innovation. CET was reorganised as the CUI, and it worked with the Mayor’s Office on Technology and Innovation to create an urban tech strategy, NYCx. It joins together clean tech, makers, universities, city departments, federal labs and neighbourhoods. NYCx envisions urban tech as creating and testing solutions for problems related to city infrastructures (for example, energy, mobility and digital services). It is governed by the EDC, the Mayor’s Office, and a Tech Leadership Advisory Council, which includes 23 representatives of tech nonprofits and assorted corporations (for example, Google, Viacom, IBM, Microsoft and Ford). Part of what is new here is that NYCx seeks to embed itself in city agencies and neighbourhoods, which are to define R&D challenges. Three labs are hubs for this. The Center for Urban Science and Progress (CUSP) analyses big datasets to address challenges such as energy use, pollution and connected communities. NYU hosts the lab, whose partners include five other universities, seven tech and utility firms, a dozen city departments and four national labs. Second is the Hub@New Lab, which the EDC organised in partnership with New Lab and several schools (NYCEDC, 2017). This is a prototyping and testing lab for hardware firms who address urban problems. Third is the Brownsville Neighborhood Innovation Lab, in a poor Brooklyn neighbourhood. It aims to support residents and city agencies in defining concerns for urban tech firms to address. Governance is through a partnership of the EDC, Mayor’s Office and CUSP, with a Community Advisors group representing community-based organisations, social service agencies and entrepreneurs. If this works more neighbourhoods will get labs (City of New York, 2017). NYCx brings the poor into applied innovation by embedding its developmental framework into their neighbourhoods. Will this empower the poor or merely open up everyday life for commercialisation? That is the frontier for innovation’s urban question. Thinking like a city This study of the intersection of national industrial policy and urban innovation shows that New York made itself into a DNC by building on and emulating the DNS in ways that fit its context and resources. Our DNC model features the idea of double embeddedness. Just as a DNS embeds itself in society (or a city), so too do a city’s developmental efforts. We defined a DNC as a direct program implementer, which designs its programmes and activities and loosely coordinates decentralised networks. Several questions follow: (i) how did the DNS affect the rise of this DNC?, (ii) how do the DNS and this DNC compare? and (iii) how do DNC differences matter? We gathered evidence suggesting that DNS initiatives, new and old, influenced NYC’s innovation turn. Most Obama initiatives were not designed to fan local development, but some supported particular development directions in NYC. What mattered most was that NYC’s developmental agencies applied DNS ideas and resources to fit the city’s situation. The key similarity of New York’s DNC to the American DNS (Block, 2008, 2011) is that it is structured by varieties of embeddedness: multiple city offices embed themselves in diverse economic and research bases, using various forms of governance arrangements and discovery processes. Besides taking brokering and facilitating roles that one might expect of cities with fewer resources, New York agencies also design their own programmes and activities and expend resources. NYC, with a population and government budget matching or exceeding that of small nations with a DNS, may define the upper limits of a DNC. At the same time, there are differences between this DNC and the DNS, which reflect the city’s very different context for innovation and development. A DNC is sui generis, with a unique economic and resource base, not a mini-version of a DNS. Cities are frontiers for devising applications of technology, not developing technologies per se. New York’s DNC is ramping up support of life science spinoffs of federally funded institutions, but most of its development efforts support the application of tech to established sectors (for example, media, manufacturing and city infrastructures and services). The DNC exploits growing intersections of specialisation and urbanisation economies. There are unique actors here, such as hybrid firms and workers who produce novel mixes of tech and creative content. Finally, a DNC is likely to support recruitment, given that cities are embedded in shifting global production networks that provide opportunities for upgrading one’s position (O’Riain, 2004). Take for example, NYC’s pursuit of Amazon’s HQ2. The growing role of urban tech applications shows that work on neo-developmental states should start paying attention to cities, especially as they influence the design and implementation of industrial strategies. In particular, innovation policies are politicised, as tech is applied to existing industries (Breznitz and Ornston, 2018) and the terrain people live in (Engelen et al., 2017). Neo-developmental politics and autonomy increasingly will play out in cities, as seen in NYC’s civil war over Amazon’s HQ2. 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TI - A developmental network city? Double embeddedness in New York
JF - Cambridge Journal of Regions, Economy and Society
DO - 10.1093/cjres/rsz013
DA - 2019-11-22
UR - https://www.deepdyve.com/lp/oxford-university-press/a-developmental-network-city-double-embeddedness-in-new-york-K8OIoSBzb0
SP - 385
VL - 12
IS - 3
DP - DeepDyve
ER -