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Despite Brexit, the refuge crisis, increased terrorism, and economic strife in Greece, Europe is still better positioned to win supremacy in smart city innovation according to several experts in the field.

Like two heavyweights before a title fight, the US talks a big talk and has more muscle to back it up but Europe has more experience and greater agility in the smart city ring. The US describes itself as the dominant force in modern entrepreneurship, yet has only developed significant smart city initiatives in the past year or so, compared to almost a decade of similar activities in Europe.

Smart City

“The EU is well positioned to not only compete but even potentially lead the democratised and urbanised entrepreneurial revolution in the decades to come,” said Boyd Cohen at Fast Company. “European cities tend to be way ahead of North American cities in the smart cities arena”, he said.

The EU’s more bureaucratic culture is less tolerant of failure and has considerably less access to venture capital than the US, it also needs to overcome the added difficulty of dealing with dozens of member nations, each with their own languages and agendas, just to create a similar sized market as the US. However, the EU’s old cities are proving to be a much better fit for an entrepreneurial, creative, millennial generation seeking more liveable, walkable and culturally rich places to live and work.

The main assumption underlying this approach is that creative workers seek creative outlets in all aspects of their lives and therefore migrate to cities that actively support their preferred lifestyles”, wrote Mary Donegan et al., on page 181 of the 2008 paper “Which Indicators Explain Metropolitan Economic Performance Best? Traditional or Creative Class”, published in the Journal of the American Planning Association.

In Richard Florida’s Creative Class hypothesis, which pre-dates Donegan’s work, US cities were ranked within a creativity index using “the Creative Class share of the workforce; innovation, measured as patents per capita; high tech industry, using the Tech Pole Index; and diversity, measured by the Gay Index”.

Florida found Creative Class workers have sought out cities that better accommodate their cultural, creative, and technological needs, such as San Francisco, Washington D.C., Austin, Seattle and Portland – some often described as the most “European” of American cities.

Europe’s old cities were planned primarily for people, before cars, and as urban culture turns a full circle, citizens again seek compact walkable cities rich in culture. Whereas most cities in the US gave significant urban planning priority to automobile infrastructure, now creating a disadvantage in luring the pedestrian and cycle friendly creative, millennial entrepreneurs.

Research firm Mercer uses 39 indicators from 10 factors including economy, education, health care, housing, and natural environment to compare hundreds of cities around the globe on quality of life and cost of living. Their 2016 survey listed seven European cities in the top 10 places. The highest rated US city on the ranking was San Francisco at 28th. All this points towards the greater ability of European cities to attract, keep and nurture the creative and entrepreneurial citizens that allow smart cities to flourish.

A great example is the spread of Fab Labs in the two regions. Originally an MIT initiative, Fab Labs “provide access to the tools, the knowledge, and the financial means to educate, innovate, and invent using technology and digital fabrication to allow anyone to make (almost) anything, and thereby creating opportunities to improve lives and livelihoods around the world”.

Fab Labs are creative spaces available to the community, which contain 3-D printers, lasers, and other tools used to tinker and develop local products. Despite being founded in the US by a leading American academic institution, there are only 115 Fab Labs in the US compared to nearly 300 in Europe. The story is similar with co-working spaces, a staple of the creative community. Where, for example, Barcelona boasts 300 such spaces compared to about 12 in similarly sized Philadelphia.

Another significant comparison is that the business culture in the US accepts failure better than Europe while simultaneously providing far less support. In Europe entrepreneurs don’t worry about losing access to healthcare or education for their families if their business goes down, giving greater comfort in risk taking. Opportunity is also greater in Europe where income equality, according to the GINI Index, has been at 30.9 for more then 10 years, whereas the US sits at 41 and that inequality continues to rise.

Many of the US’s highest-profile entrepreneurial success stories starred immigrants or the children of immigrants; the story is similar in Europe. However, it has become increasingly difficult for immigrants to obtain the necessary visas and permits to live and work in the US, while Europe still benefits from this influx of highly driven, fresh perspectives into their borders, which far outweighs the overly reported negative aspects.

The muscle of the US heavyweight comes from greater venture capital, for which Europe may never weigh in heavier. However, the greater agility available to entrepreneurs today through open source software and hardware, cloud computing, crowdfunding and angel networks, means that traditional venture capital is less important than ever. Recent research by the Kauffman Foundation shows less than 5% of start-up funding comes from venture capitalists and only 6.5% of fast-growth start-ups obtained venture capital financing.

So in the endless bout of urban development, the more experienced and agile European cities are expected to run rings around their young, powerful American counterparts; at least for the next few rounds.

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