STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

Chapter 3.2
Innovating to Support
the Transition to the
City of the 21st Century
Cities have played a major role in creativity and innovation
throughout history. Creative people and systems,
innovative milieus, knowledge creation mechanisms,
and new technological developments have all primarily
happened in cities and all contributed to societal
development and prosperity.
Creativity and innovation involve a variety of areas
that range from technology, institutions and organizations,
modes of operation, information and knowledge, finance
and human development. Innovation can also take a
variety of forms, including improved project design and
quality, changes in organization and management, higher
efficiency, high- and medium-tech industrial development,
creation of new linkages and coordination mechanisms,
scientific research and
the commercialisation
of technical knowledge. 1
This goes to show that, to
a large extent, creativity
and innovation are already
embedded in economic
functions and under
the control of financial
capital. 2 Creativity and
FACT innovation
can flourish in many
other areas that do
not automatically
contribute to economic
development per se
such as developing and
In technologies
managing urban life,
and the arts alike,
the renewal of social
institutions, better urban innovation is increasingly
policies, development of dominated by the private
knowledge networks, etc. sector.
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Creativity and
innovation are largely
influenced by six main
types of factors: (1)
locational advantages
(i.e., economies of
agglomeration and
‘positive externalities’
at regional scale); (2)
knowledge networks; (3)
cultural factors; (4) the
economic environment;
(5) organizational factors; and (6) state/government
interventions (i.e., policies, incentives, institutions).
‘Innovation’, as glorified in association with ‘creative
cities’, the ‘creative class’ and ‘city competition’, more often
than not is in the sole benefit of business and economic
elites, 4 and it fails to integrate the various dimensions
of prosperity, particularly equitable development and
environmental sustainability.
Innovation is a creative capital that is brought to bear
on various dimensions of development and prosperity,
in the process unleashing undeveloped potential and
making fuller use of local resources and assets. The
culture of creativity must be embedded in the way
cities operate. 6 Therefore, it is not just for government
or business, but also
for communities and
the public at large to
Innovation, as
contribute their own FACT defined in this
powers of imagination.
Report, is a broader
notion that has to do
And this has to be not just
with creative approaches
encouraged but legitimised
to planning, economy,
as well, in a bid to broaden social inclusion,
the range of solutions to
environment, culture and
urban issues.
local identity. 5
The cities
POLICy and countries
best placed for economic
growth and prosperity are
those that invest in building
knowledge and innovation
institutions and related
systems with strong support
from public authorities and
the private sector. 3