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Centre for Entrepreneurship, SMEs, Regions and Cities

Conference on SMEs and the Urban Fabric

 

 15-16 April 2019 Trento, Italy     


Organised by the OECD Trento Centre for Local Development and the Axel and Margaret Ax:son Johnson Foundation, Sweden

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The two-day OECD conference “SMEs and the Urban Fabric” explored what cities and SMEs do for each other

Our everyday life takes place at different scales. We care about the quality of life in our local neighbourhood, the ability to shop and experience life locally, but also how quickly we can get to work in another part of the city or how easily we can get the inputs and services required for our daily work. To understand what improves well-being and the economic prospects of a place, it is therefore necessary to think and define policy-action at different scales: from international agreements, to national frameworks, urban plans and down to the design of neighbourhoods and streets. Such an integrated view is rare and thinking often limited to one scale or one policy “silo”. This two-day conference took a look at cities and their SMEs and entrepreneurs from different angels, bringing planners together with economists who considered the interplay between cities and SMEs at different scales.

Download the summary of the conference outcomes 

Consult the agenda & discover our speakers

 
   
The value of SMEs   What can SMEs and entrepreneurs do for our cities?   The shape of cities   Policy, governance and regulations   Where do we go?

 

Opening remarks

Alessandra Proto, Acting Head of Trento Centre, OECD Centre for Entrepreneurship, SMEs, Regions and Cities

 

Achille Spinelli, Local Minister for Economic Development, Research and Employment, Autonomous Province of Trento, Italy

 

Peter Elmlund, Head of Urban City Research Programme, Axel and Margaret Ax:son Johnsson Foundation, Sweden 

 

The value of SMEs

The process of “financialisation” of real estate assets - Keynote

Saskia Sassen, Professor of Sociology, Columbia University and London School of Economics, US and UK

Housing is increasingly becoming a financial asset, including low-income and social housing. This process of “financialisation” of real estate assets is subtracting resources from middle and lower-income households. Investment into real estate assets by financial firms has been especially pronounced in large cities and it has intensified in the last decade. This can have perverse consequences on housing markets, e.g. properties can create value when they are unoccupied. 

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SMEs as key actors for economic resilience, productivity and inclusiveness

Sandrine Kergroach, Senior Economist, OECD Centre for Entrepreneurship, SMEs, Regions and Cities

SMEs are the backbone of OECD economies but face specific challenges as highlighted in the forthcoming OECD SME & Entrepreneurship Outlook 2019. SMEs are pervasive among service providers but less active in manufacturing activities. Innovation is fundamental for SMEs to grow, and innovation in the field of digitalisation is in particular an important opportunity to boost SMEs growth. Although in some sectors SMEs manage to outperform their large competitors, on average, SMEs need help to grow and capitalise on emerging opportunities.

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Startups and SMEs: Direct and indirect effects on cities and regions development

Martin Andersson, Professor of Industrial Economics, Blekinge Institute of Technology and CIRCLE at Lund University, Sweden

Cities can create a virtuous cycle where a thriving entrepreneurial eco-system supports not only existing SMEs but also the creation of new firms and higher local job creation. Why? SMEs help establish an entrepreneurial culture and “breed” new entrepreneurs; SMEs satisfy “love for variety” of larger firms; SMEs make places more attractive; SMEs can push policy makers to promote a business-friendly environment.

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What can territories do for SMEs and how are SMEs giving back?

Nadine Levratto, Research Professor, CNRS, University Paris Nanterre, France

Three types of factors matter for the resilience and growth of SMEs: internal factors, industrial factors and local factors. In empirical studies, the explanatory power of variables related to firm location is higher than the firm-specific characteristics. Benefits are reciprocal as entrepreneurship positively correlates with the speed of recovery after the 2009 recession across employment areas in France while the opposite is true for manufacturing share. Hence, SMEs are important drivers of regional resilience. 

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🎥   The value of SMEs - Watch the open panel discussion

 

What can SMEs and entrepreneurs do for our cities?

SMEs and the Strategic Management of Place - Keynote

David Audretsch, Professor School of Public and Environmental Affairs, Indiana University, US 

Cities provide support to SMEs in three dimensions: factors and resources, spatial structure and organisation, and the behavioural context. Cities provide access to physical and skilled human capital (factors and resources). They provide opportunities to form cluster and link diversity with complementarity, promoting innovation (structure and organisation). They embed culture and values that help establish networks, the emergence of leadership and the formation of the firms’ identity and image (behavioural context). Policy can leverage factors in different ways, but SMEs need to do their bit as well.  

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Entrepreneurs act as catalysts for innovation across districts in a country

Andrea Morrison, Associate Professor in Economic Urban Transitions, Utrecht University, Netherlands

Entrepreneurs act as catalysts in for innovation districts in a country. Entrepreneurs are not subject to the myopic behaviour that often characterises large firms that tend to be trapped in their own structures and resistant to change, exemplified by the Italian motorcycle industry. The industry is highly concentrated around three clusters. Performance differs between the clusters with spin-offs and experienced entrepreneurs performing better. They combine their innovative approach with pre-existing knowledge and institutions.

 

 

Altering workplace & residence locations in cities through small business owners

Darja Reuschke, Associate Professor in Human Geography, University of Southampton, UK

Commuting has a strong adverse impact on individual well-being. The rise of home- and teleworking promises to reduce the strain of commute on people’s lives, but working from home creates its own challenges. Does homeworking actually encourage urban sprawl or is it that people living outside of the city choose to work from home because commuting costs? In a case study for Edinburgh, small business owners are less likely to commute, and, when they commute, they commute less. 

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Confcommercio National Workshop for Urban Regeneration - Best Practices 2018

Roberta Capuis, Head of Urban Planning and Regeneration, Confcommercio-Imprese per l'Italia, Italy

The Laboratorio Nazionale di Rigenerazione Urbana 2018 has collected best-practices from across Italy on the interplay between SMEs in commerce, the public sector and civil society that helps with urban renewal and innovation in SMEs. Local policy makers strive to offer a unified vision for urban development, and the right incentives for successful public-private partnerships to take place. SMEs provide cities with a sense for economic security and inclusiveness. The objective of the Laboratorio was to find for each selected city a personalised way for local businesses to contribute to the revitalisation of the urban fabric, ranging from strategies for tourism development to planning and regulatory processes.

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🎥  What can SMEs and entrepreneurs do for our cities? Watch the open panel discussion

 

The shape of cities

Livable places and economic growth: The experience in the United States - Keynote

Christopher B. Leinberger, Charles Bendit Distinguished Scholar and Research Professor and Chair, Center for Real Estate and Urban Analysis, George Washington University School of Business, US

In 1950s, walkable city centres were a landmark of our cities, will the 2010s take us “back to the future”? After decades of investing into car-dependent suburbs, we are witnessing a resurgence of walkable areas in (some) US cities. The divide is not so much urban vs rural or even urban vs suburban, but between places that are “walkable urban” and those that are “driveable suburban”. Suburbs themselves are nowadays aiming to combine the benefits of suburban housing and the amenities of accessible city centres. The required investment seem to pay off as house price-premiums indicate a preference for walkable urban centres, firms and offices are attracted to the neighbourhoods and people flock to accessible areas. The interplay between private sector investment in jobs and urban regeneration can create a virtuous cycle, as the case of Detroit highlights.

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The problems, potentials and complexities of mixed streets

Matthew Carmona, Professor of Planning and Urban Design, University College London, UK

High streets are places of great contrast and variety in London and UK. There are two narratives about them. One sees them as idyllic suburban places, the other as chaotic and polluted. The reality is that high streets are places of great complexity. An entire mixed-use ecosystem thrives behind the thin crust of retailers visible from the street. Nowadays, high streets are endangered due to the crisis of the retail sector. Effective public policy will have to acknowledge the complexity of high streets and engage actively beyond “deregulating”.

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From density to intensity: Designing the shape of the smart, future city

Tim Stonor, Managing Director, Space Syntax Limited, UK

Development of neighbourhoods needs to follow a coherent view that integrates adjacent places with the streets that connect them. To make places walkable and attractive, the streets at their heart need to be carefully considered. What can be done to maximise the economic and social returns of urban development? Connect places, integrate pedestrian spines and public transport, leverage and create amenities (canals), repurpose multiuse buildings, use attractive design and use the time between current and future state through temporary uses.

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The city as incubator: The role played by urban morphology at different scales

Francesca Froy, Honorary Research Associate, UCL Institute for Innovation and Public Purpose, UK

As cities grow, they become economically more diverse. Cities can support the needs of SMES in two fundamental ways and thereby promote diversity. First, the city provides SMEs with a physical space to thrive. The provision of flexible, seamless and modular working space, where SMEs can experiment, communicate with each other and flexibly scale up is fundamental. Second, the city can provide the infrastructure to connect these places both within and across cities. This requires integrated planning at different scales with a view. 

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🎥  The shape of cities - Watch the open panel discussion

 

Policy, governance and regulations

The geography of EU discontent and the revenge of the places that don't matter - Keynote

Andrés Rodríguez-Pose, Professor of Economic Geography, London School of Economics, UK

Cities make us richer, smarter, greener, healthier and happier. At least that is the general discourse. The easy next step has then been to promote policies that help people move to these cities, to the “places that matter”. The result has been a backlash against the status quo and the urban development model, the “revenge of the places that don’t matter”. Compensatory policy is not going to solve the issue, but actual development opportunities for people are needed. There is no single recipe, nor simple solution. What is required are better designed and locally implemented development policies that are: 1) strongly based on theory and evidence, 2) tailored to the specific needs of different regions and tap into their (unique) potential. 

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The value of small-scale development & how to enable it

Brian Falk, Director, Project for Lean Urbanism, US

Big is beautiful is often the credo in place development. But small-scale development has key advantages. It is more adaptable, it preserves character, it promotes better risk-sharing, and it allows locals to participate. The current system tends to favour large-scale projects, as they are better able to meet standards and standardised requirements. Therefore, requirements need to be more flexible to allow space for small-scale development. Finding ways to make building codes “leaner” and moving from red tape to “pink zones” for development can help make small-scale development viable.

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Improving the trading environment through collaboration: Lessons from the UK

Cathy Parker, Director and Professor, Institute of Place Management (IPC) and Manchester Metropolitan University, UK

Retail in town centres is in decline. The share of retail spending in town centres is down to 34% from 50% in 2000 and store vacancy rates are as high as 40%. Many factors help town centres stave off decline, but they vary in their impact and the ability of policy makers to influence them. E.g. longer opening hours are effective, but hard to implement as high street shops need to be co-ordinated. How can co-ordination and collaboration be achieved?

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Support for small businesses: Identifying the needs of minority-owned firms

Robin Newberger, Senior Business Economist, Community Development and Policy Studies, Federal Reserve Bank of Chicago, US

The start-up rate in the US has been declining over the past decades. What are the main hurdles to “doing business”, especially for minority entrepreneurs? Minority-owned businesses are are an important avenue to improve their social standing, but they face a variety of barriers, especially when it comes to access to finance. Minority-owned businesses are often younger, have lower profitability, are active in lower-margin industries and have lower revenues than other businesses. Governments can support minority-owned businesses by training potential entrepreneurs on how to run a financially sound business and to address perception biases among lenders and businesses owners.

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🎥  Policy, governance and regulations - Watch the open panel discussion

 

Where do we go?

The nexus of entrepreneurship and the city - Keynote

Peter Nijkamp, Emeritus Professor in Regional and Urban Economics and in Economic Geography, Vrije Universiteit Amsterdam, Netherlands

Many economic historians have studied the role of entrepreneurship in the economy and society as a whole. An increasing number of economists and policy makers acknowledge that location choice is among the most important decisions taken by entrepreneurs. The location entrepreneurs choose has an impact on their ability to learn, to hire and to expand their business. A city is a spatially coherent and functionally integrated geographical system. The existence and success of clusters of economic activity and cities are codetermined and often unplanned. Cities come together through the choices of firms, entrepreneurs and residents with (ideally) support of planning. 

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OECD Contact

Alexander.Lembcke@oecd.org 

 

 

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