Top 5 cities that support innovation & entrepreneurship

20 July 2015 Consultancy.uk

New York, London, Helsinki, Barcelona and Amsterdam are top five performing cities when it comes to supporting innovation and entrepreneurship, research by Accenture shows. In its report, the consulting firm considers different ways in which local policy makers can make city environments more open, developed and leading in terms of an innovative ecosystem.

In a recent report, titled ‘Citie: City Initiatives for Technology, Innovation and Entrepreneurship’, Accenture, Nesta and Catapult consider the key roles cities can play in creating an eco-system in which tech-start-ups and entrepreneurs can engage in innovative practices. The report further looks at how far 40 cities are succeeding in creating an internal ecosystem conducive to innovation.

The 40 cities

Cities of the future
As a result of the increased pace automation, foreseen to occur for 47% of US jobs and for up to a third for the UK, the role in technology companies and entrepreneurs in the development of future value and jobs is also expected to grow. The research finds that growth is already disproportionately driven by young, high-growth companies. In the period 2002 – 2008, for instance, just 6% of high-growth companies created 50% of the UK’s employment growth. In New York City, the tech sector directly created 45,000 jobs between 2003 and 2013, which is 6% higher than the employment growth rate in New York City and 14% higher than the national average.

To develop the impulse towards more innovative cities that create an environment in which technology companies and entrepreneurs can flourish, the authors explore a number of key policy initiatives on the local government level.

CITIE framework

Citie framework
The framework constructed by the authors, in consultation with city government leaders, policy experts, venture capitalists and entrepreneurs, seeks to provide a set of resources for policy makers seeking to develop support for innovation and entrepreneurship. The framework has three dimensions.

Policy dimensions: aim at providing answers to overarching questions about how a city supports innovation and entrepreneurship. These include questions on openness: “How open is the city to new ideas and businesses”; on infrastructure: “How does the city optimise its infrastructure for high-growth businesses?”; and on leadership: “How does the city build innovation into its own activities?”

Policy roles: the report found nine roles that city governments can play to support innovation and entrepreneurship. Acting as Regulator, Advocate and Customer, they can increase openness to new ideas and businesses. They can optimise the enabling infrastructure for high growth businesses acting as Host, Investor and Connector. To lead from within, they can take on the role of Strategist, Digital Governor and Datavore.

The CITIE Framework

Policy levers: are the specific policy initiatives used to measure how well cities perform these roles. These levers are chosen to represent best practice from around the world, and include: enforce existing regulations proportionately; provide set-up support for new businesses; use problem-based procurement methods; provide free, public Wi-Fi; and publish a vision of how to support innovation and entrepreneurship.

Top three performers

Top performing cities
New York comes out on top in terms of meeting most of the policy roles, with strong capabilities in leadership and openness. London, which comes in second, performs well in infrastructure (but lacks good connectedness) and openness. Helsinki, which rounds out the top three, performs particularly well in infrastructure and leadership but falls behind on openness. Barcelona, found on fourth place, has a very strong leadership profile, as well as good infrastructure (lacking in investor strength) but lacks in regulatory openness. The number five on the list, Amsterdam, is a mixed bag in each category, with strengths and weaknesses.

Success indicators
The analysis also considers the relative importance of different factors that open up a city to be a good space to develop innovative businesses and engage in entrepreneurial activity. Some factors, like city innovation vision; open data; and smart city analytics, are easier for the city to develop but of less relevance to innovation than other factors, such as access to customers; and cost of workspace for innovative activity. Other factors highly important to innovation, such as networking opportunities; access to talent; access to capital; and digital infrastructure, are less in the hands of cities. The report highlights that certain factors like quality of life; house prices; and cultural activity are not directly in the hands of local government but are highly valuable toward attracting starters.

Success factors

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”