This week a colleague and very good friend came back from China. She went there for 3 weeks to visit her family. I think it has been a couple of years since she has not been in her homeland. After talking a while, I asked her what were the things she found different. She said now there are many more businesses, shops and great restaurants. For her dismay as earning a PhD on Urban Planning & Environmental issues, she also found many more cars and and extremely quick urban sprawl. She also commented how food has doubled price (e.g. vegetables or the same bowl of noodles from 2 yuans to 4). Other things, like transportation had not increased so much, though. An interesting thing, she found that in fashion stores like the Swedish H&M, clothes were more expensive in China than here in Denmark. “Even if they were Made in China!!”. I answered that maybe it was because over there H&M was seen as a luxury European clothes, while here it was more normal. She did not think so, arguing some reasons. [I admit I also thought about some conspiracy theories, such as dumping and others]. All in all, these stories from China are nothing new for the ones we try to follow some a little bit the Chinese economy evolution, it is just nice to confirm the data from a friend.

Then I asked her about the condo. A flat she and her husband bought in the outskirts of city relatively close to Shanghai, about a year ago. They bought it to invest their savings, not really to live there. Upon my wondering when they bought it, they explained to me that prices have increased a lot, and while they may not increase so much as the last years, prices will not go down. It found a good deal, and they rent it right away, and who knows maybe in the future they could temporarily use it, etc… I told them, the story sounds awfully similar to the one repeated over and over, in the Western countries a few years ago. I also showed them some graphs of the housing prices in Europe and the US. They said China is different because, it is not convenient for “the” Government, and that the starting prices in China were very low…. Anyways, you can’t go wrong investing in property in China… Once they bought it, the prices went up a little, but they have become flat.

-”So how’s the price of your apartment, is still stable?” I asked. “Yes -she answered- it is more or less the same as the last months… You’re SO interested about our apartment!! Why?”- She said smiling.

– “Because… your apartment is a symbol, it’s a sign for me. If the price of it goes down, then it’s like a dominoes that will reach the economy everywhere…. If prices go down, the new huge middle class in China will loose financial stability, they will get nervous and highly constrain spending. The Government and elites have been doing whatever they want, and the people won’t complain because they’re getting economically and socially ahead, but if things starts getting shaky and social protests come, they will have to start trying to give better expectations to the people. That could be spending not only in infrastructure as they have done, but they may have to offer more available health care, cheaper education (student loans?), etc. At the same time industrial production will come to halt, and unemployment will rise, then they may have to offer more unemployment benefits, and well connected companies will need more public funding, etc. Same thing as in Europe and US. For all these, China will need to start using their money and deposits in various forms in foreign countries. They will need to stop buying the crappy Western debt. This will unleash bad things. Western countries for sure will retaliate and block their products (kind of a similar thing happened when the Japan stopped buying debt from the US in the 1980s and then coincidentally the US blocked imports from Japan, destroying much of their industry. China and major Asian buyers have a much bigger population that only Japan, so they would not have a lost decade, but), this would not help China’s economy, creating more instability. Probably then China will unpegged the Renminbi from the dollar. The instability will not only be in China but everywhere. Of course, this is all a possibility, but with 65 million empty homes in China, and they’re constructing like crazy, it does not seem so unfeasible there is a housing bubble going on, and that people like in the rest of the world will start asking for more responsibility to their governments. [Ok, I gave her a lighter version]. So that’s why I care about your apartment. So could you please tell me if the prices go down, even a little?

She said she would tell me. I’ll keep you updated.

p.s. Telling this horror story I feel like using a blah, blah, blah from the zero hedge blog.

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This is a couple of paragraphs which won’t fit in the paper I’m finishing but I think is cool to put it online, and won’t fit in twitter :)


In the last decades, consultants have been taken a more relevant place. In the 1959, there were consultants who designed the mammoth downtown renewal project. Outsourcing to “professionals” is something widely used in the nation, but Vallejo massively uses them. As the ViceMayor said after loosing a close vote against the renovation of the firefighters contracts, “I’m going to say something many here won’t like: The elephant in the room is that the City is run by consultants” (Gomes, 2010)

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In acquiring external knowledge many cities, especially in the US, rely on consultants. The city management of Vallejo, as many others, openly confirmed that they prefer to hire contractors instead of offering city jobs because it is cheaper for the municipality budget. While it is important for cities to obtain knowledge from outside, the case study of Vallejo has shown, that they should be careful not to trust any sole architect, economist, lawyer, arbitrator, planner or academic. Local officials should also contrast information from different groups, which does not necessarily have to be highly paid, or even paid as they can be volunteers concerned about their city or city region.

If you have problems wathing the video, just click on his name.

Ed Glaeser was last night at The Daily Show with Jon Stewart. A comedy show based on news that I always find funny. I started watching it when I went to study to the US in 2003, a that time I was surprised how they criticize the Bush administration. Anyways, yesterday Glaeser went to the show, one of the economists I like to follow. So Ed Glaeser and Jon Stewart, a perfect mix. He was promoting his very interesting book “Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier” Penguin. I think it’s a book I’d like to read. See today’s book review at The Economist. I would say his approached looked a little bit like Richard Florida’s love for urban areas, and that’s great we need many more guys supporting the concept of the cities from different points of view

I was surprised how young he is. I always pictured him as a 60 yeard old guy.

Here it is a podcast of Ed Glaeser in Freakonomics: Why Cities Rock. From February 18. I really liked it. I didn’t like some stuff, but I enjoyed the idea of building up in San Francisco Bay Area.

Yesterday there was an article about Vallejo in the Financial Times. It says:

For an image of the future that is guaranteed to chill US civic leaders and bondholders alike, there is no better place to look than among the potholed streets and boarded-up houses that litter the Californian city of Vallejo.

It made me feel good that last year I went to the city to make a case study about it. I stated at Univ. of California, Berkeley during the whole Spring semester 2010. A few days ago I finished writing a paper called “VALLEJO, CALIFORNIA. FROM THE FRINGES OF THE CITY, A CASE FOR THE ‘CITY REGION SYSTEM OF SURVIVAL’. I wrote it to present it at the DIME-DRUID ACADEMY Winter Conference 2011, this week.

This paper is very heterodox, and is a paper on progress. The main purpose of it was to make a summary of theories I learned about Local Economic Development at the Berkeley libraries. I then tried to connect the case of this city (or district) of the San Francisco Bay Area, and its significance to entrepreneurship and innovation policy. Innovation from a broad sense, for the ones that now what I’m talking about.

I got much help from the locals of Vallejo, and one of them, the editor of the popular Vallejo Independent Bulletin, asked me to send him a copy of the article when I would finished it. Keeping my word I sent it to him, and he has published it online.

My article at the Vallejo Independent Bulletin

I am grateful he did it, because I got a few comments from the citizens. This made me realize that my ideas are still quite confusing. So I wrote a comment. It seems it has an anti-spam feature, I told the editor. For now I’ll put it here.

Since I read the comments of Ab and SomeoneElse on my paper about Vallejo and the Bay Area, I have been thinking a lot.

I am grateful for the comments. In particular, because I have realized that I have not made a good job to express my ideas. This is hard, as English is not my native language. But also because of the internal fight I have had. I am a PhD student specializing in local economic development, but it is the case of Vallejo that has made me changed many of my preconceptions. Now I would like to comment on the comments.

Ab says: -“the last line is spont on”- and then quotes me: -“Vallejo … end up like many cities in third world countries, where a few (police and firefighters?) live in affluence while the vast majority of citizens live and die in misery”- [police and firefighters added by Ab].

There are two things. First it should be understood that even though Vallejo has been a city, since the 19th century, I refer in the paper as a “district” of the city-region of the Bay Area. I know this may sound weird for any local (of the Bay Area), but coming from abroad I can clearly see that the Bay Area is a large metropolitan area, highly connected in its economic geography.

The second thing is that I don’t necessarily say that police and firefighters are the few, or the elite of Vallejo, nor of course the elite of the city-region. True, they are an interest group, and as I referenced in the paper they have a well known “symbiotic relationship” with the political power of the city. But going back to my first point, one has to look beyond the city limits of Vallejo. Making $150,000 as a safety employee it’s certainly high, but what about the bankers and real estate leaders who make 10 times or more, in the different districts of the Bay Area?. This is probably a stupid comparison, but what about the profits of a company of the city region, like Apple making 100,000 times more. But still, what is their responsibility towards their neighbors?

“Someone Else” points out we need to think outside the box. I’ll try to do it. There is so much anger against the public safety employees, and probably with a reason. But this is not going to solve the problem of Vallejo. Thinking outside the box… What about a Bay Area police? After all, the criminals operate in all the Bay Area, not only in one particular city. I am NOT an expert in safety, but I see that the New York City Police Department, covers 8 million people, more than the 7 million of the Bay Area. The Bay Area has already the BART police, that would fall inside the Bay Area Police. The 9 counties police departments (sheriffs), a heritage from a bygone era could also be reduced. I repeat, I have no idea about this field. But as an economist I would think that cities (and their tax payers) would avoid the “competition” among them. And that is the idea: work more towards collaboration, than competition.

Of course, safety should not be the only thing. In fact should be the least. The most important things would be towards, education. I had the chance to be in UC Berkeley, one of the most amazing universities in the world. Also visited friends in Stanford. Great places. I know all these ideas have been said many times before, even from the former Governor (I still can’t believe people voted for an European actor). But there should be more mechanisms to get more funding for the rest of more ordinary higher education. However, what I think is of really concern, is the high inequality in the school districts across the Bay Area. In Europe we have many problems, don’t get me wrong! but with the exception of a few countries (like UK), every child has the same amount of money allocated for education, regardless in which neighborhood was born. There is an urgent need for a more cohesive education across the Bay Area.

More cohesiveness should be as well for access to justice, healthcare, transportation, innovation and entrepreneurship policy, etc in the Bay Area. That’s what I am trying to say in the paper. Because the different parts of the city region are so interdependent.

The same goes to having X or Y Mayor. Sure, many question if Davis should be the Mayor. But I think it does not matter if X or Y, or Z would be Mayors. Neither if Vallejo hires the best consultants, or the best City Manager. My hypothesis is that it does not matter who is in the leadership of Vallejo. The city will not survive.

Unless, they realize that: 1) Vallejo is dependent of the city-region. (This does not mean surrender). 2) There is need of active coordination, at local (Vallejo) and city-region level. That is stop fighting at local and inter-local level, and start collaborating.

If not, and now I clarify, the city region of San Francisco, will become more and more as third world country, “where a few live in affluence while the vast majority of citizens live and die in misery.”. Many in the elite, as the mentioned Andy Grove in the paper, have noticed it.

Bicycles and local planning

October 29, 2010

Mobility is an important factor in the cities. In my home country Spain, there is a big debate about the use of bikes, and its promotion and problems. See for example the brad new blog in Spanish. I ♥ Bicis (bikes). Here in Denmark, I love biking to work everyday, ok I admit it, not with intense rain or snow.
What comes before the biker or a biking friendly infrastructure? One would say the biker. However, a correct planning it’s crucial. Here I show a video of the evolution of the cities of the Netherlands.

I think in Spain the most important thing that would change the whole mentality is to incentive housing property owners to have a bike parking. For example, in Denmark every building by law has to have a bike parking. I hope in the future some Spanish cities would change their mentality, some of them are taking good steps, but overall still the bike use is minimal. For now, we should keep asking, what comes first, the car or the car friendly infrastructure?

Thanks to Manuel Fernandez for the link, check his web Ateneo Naider.

Every time I get into a second hand book I always find something ‘super interesting’. My wife picks on me about it. Earlier this semester I found the book of The Prince [Translated by Daniel Donno. Bantam Classic. 2003], for 1 dollar. I already read some parts but now I want to read the whole thing. I liked most of it, and it is true, that he is not that “Machiavellian”, as the people say. Come on! he was born in 1469! Governments were all about realism.

Because he was leaving in near poverty, he was trying to find a position back in the government. He had to convince the guys in power that, he was a good and useful guy, and even if they tortured him before!

I transcribed the last paragraph of the Chapter 21, ‘What a Prince Must Do to Be Esteemed’. Here it is Machiavelli discussing entrepreneurship policy, local economic development, “cultural economy”, and the importance of having a charismatic/catalystic local government.

For the ones unfamiliar with the term, a prince, was what he was referring to the man in power of the Italian city-states. And the Lorenzo de Medici, which he (or one of his friends) later hired Niccolo.

A prince should also demonstrate that he loves talent by supporting men of ability and by honoring those who excel in each craft. Moreover, he ought to encourage his citizens peaceably to pursue their affairs, whether in trade, in agriculture, or in any other human activity, so that no one will hesitate to improve his possessions for fear that they will be taken from him, an no one will hesitate to open a new avenue of trade for fear of taxes. Instead, the prince ought to be ready to reward those who do these things and those who seek out ways of enriching their city or state. In addition to all this, at the appropriate time of year, he ought to keep the people occupied with festivals and spectacles; and since every city is divided into guilds or other corporate bodies, he ought to take these into account and assemble with them on occasions, thus giving proof of his affability and munificence, yet never failing to beat the dignity of his position in mind, for this must never be lacking.

Niccolò Machiavelli, 1513

In his grave it says: TANTO NOMINI NULLUM PAR ELOGIUM (No eulogy would be adequate to praise so great a name)

This is the first time that I write in Danish for this blog. But I have some parts that were going to be for a book that most probably I will not use.  This is a book on the Experience Economy in Denmark, it will be published this year in Danish. I’m grateful to Birthe Ømark to assist me with the translation. I hope that one or two Danes enjoy reading this.

Indledning
Byen Frederikshavn kan kort karakteriseres på følgende måde: Den er lille (færre end 25.000 indbyggere). Den ligger i et udkantsområde. Det er Danmarks nordligst beliggende kommune. Industrien er traditionel med skibsværfterne, som var de største arbejdspladser i byen i det 20. århundrede.

Lysfestivalen skal ses som et projekt, der er knyttet til begrebet oplevelsesøkonomi. Ikke kun fordi festivalen stræber efter at lave sjove og mindeværdige oplevelser for såvel byens indbyggere som for besøgende, men også fordi projektet er organiseret af folk, der iøvrigt også er dybt involveret i oplevelsesøkonomien. Der tænkes her især på flere lysproducenter, der er involveret i eksperimentel arkitektur, show-business firmaer samt folk, der underviser i oplevelsesbelysning.

Lysfestivalen kan siges at have dybe historiske rødder, idet mennesker i Norden traditionelt har et særligt forhold til lys. Således er mange festivaler og aktiviteter i de nordiske lande dedikeret til lys i dag. I Danmark kan man nævne ”Lysende Vejle”, ”Lys over Lolland” og ”Lyslydprojektet i Høje Tåstrup”. I en brandingsammenhæng anvendes begrebet Lysets Land om den nordlige del af Nordjylland, som Frederikshavn også tilhører. Dette kapitel beskriver, hvordan Lysfestivalen i Frederikshavn har udviklet sig siden 2004 fra at være en kulturfestival til at være et projekt, der er målrettet iværksætterdynamikken i en sektor i den lokale økonomi, som er baseret på belysningsindustrien. Projektet vil blive diskuteret ud fra et lokaludviklingsperspektiv med særligt fokus på den lokale iværksætterdynamik og den politik, som sigter mod at støtte iværksætteri.

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For ti år siden skabte Pine og Gilmore begrebet ”oplevelsesøkonomi”. Forfatterne hævder, at verdensøkonomien har udviklet sig fra en agrarøkonomi over en industriel økonomi til en serviceøkonomi for endelig at gå over i oplevelsesøkonomien. Pine og Gilmore’s ide er, at produkter og derefter services førhen var vigtigst for befolkningen og økonomien, mens oplevelser nu er blevet langt vigtigere. De foreslår i bogen, at erhvervslivet skal fokusere på at tilbyde oplevelser, fordi denne strategi ”åbner muligheder for ekstraordinær økonomisk ekspansion” (Pine II & Gilmore, 1999). De var imidlertid ikke de første, der fremførte tanken om at tilbyde oplevelser. Tidligere har Alvin Toffler således beskrevet, hvordan ”oplevelsesindustrier” vil blive særdeles vigtige i ”fremtiden” (Toffler, 1970). I dagens Danmark er der forskellige opfattelser af, hvilke brancher der er mest knyttede til oplevelsesøkonomi. Nogle kilder peger på ca. 16 brancher, såsom interaktive medier, events, sport, attraktioner, osv. (Nielsén, 2005).

Pine og Gilmore har aldrig indsnævret Oplevelsesøkonomien til specifikke industrier. De dristede sig endda til at kommentere på feltet planlægning af oplevelser for borgerne. Det følgende eksempel er meget relevant for dette kapitel.

Begrebet oplevelsesøkonomi og lokal økonomisk udvikling gennem iværksætteri
Desuden ”iværksætterforetagender er ikke det samme som små virksomheder” (Hart, 2003), og iværksætteri er hverken synonymt med radikal innovation eller noget helt nyt. Danmark betragtes f.eks. som et innovativt land og samfund (Hansen, 1991) og (Gregersen et al., 2009), men alligevel er innovation mest relateret til trinvis innovation. Langt størstedelen (94 %) af de firmaer, der driver forretning i Danmark, tilbyder produkter og ydelser som er kopieret direkte, eller med små ændringer fra andre (Jensen et al., 2007).

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På tværs af forskellige erhverv i den private sektor bruger mange iværksættere ideer, der er relateret til oplevelsesøkonomi. Også intraprenører i offentlige organer har fået en forståelse for, at borgerne kræver oplevelser og ikke kun basal service. Det betyder, at specielt i Danmarks tilfælde, hvor så mange projekter bliver iværksat af intraprenører, kunne man forvente et samarbejde mellem intraprenører fra den offentlige og private sektor for at skabe flere muligheder for lokal udvikling. Kapitlet illustrerer netop, hvor vigtigt dette samarbejde er blevet i Frederikshavn.

Benneworth (2004) skriver “iværksætteri i udkantsområder er kompliceret, tilfældigt og usikkert” og peger på, at mere forskning i iværksætteri er nødvendig for at forstå lokal økonomisk udvikling i udkantsområder. I den forbindelse skal stedet og dets historie tages  i betragtning. Det følgende afsnit betragter den kontekst, i hvilken den lokale iværksætterdynamik fungerer i forskellige situationer.

’Lock-in’ og måder at undslippe fastlåsheden på

Et berømt eksempel på ’lock-in’ på det teknologiske område er det, der handler om et tastatur. For tiden bruger vi et computertastatur, som har de første bogstaver i det øverste hjørne i rækkefølgen QWERTY. Dette design blev patenteret i USA i 1874. Baggrunden for dette layout var at undgå at de mest brugte bogstaver skulle støde sammen i skrivemaskinen. I dag, hvor vi bruger computere, kunne vi bruge andre tastaturer for at skrive hurtigere, f.eks. Dvorak tastaturer (Dansk Dvorak), men langt de fleste mennesker har lært at skrive i det gamle system, og alle tastaturer laves på den gamle manér. Derfor har vi en historisk betinget ’lock-in’ i QWERTY (David, 1985). Dette paradoks kan også forekomme i den økonomiske udvikling i byer og regioner.

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Der er to problemer med studierne af innovation og læring. For det første, at mange af studierne ”beror på officielle data og derfor ofte mangler den nødvendige specificering og fokus for at kunne vurdere lokale læringsprocesser” (MacKinnon et al., 2002). For det andet, er det studier, der støtter læringsideerne ”baseret på empirisk evidens fra storbyer og bymæssige bebyggelser” (Fløysand & Jakobsen, 2008). Problemet er, at det ikke er oplagt, at storbyers erfaringer kan overføres til mindre byer, som er anderledes i såvel størrelse som råderum. Det er blevet vist, at læringsnetværk har eksisteret i de berømte italienske industrielle distrikter og allerede i 1970’erne i den private sektor i Norge og Danmark i form af erfaringsnetværk eller læringsfællesskaber (Rosenfeld, 2001).

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Alt i alt er der forskellige strategier som en by som Frederikshavn kan vælge for at undgå lock-in. Talrige projekter er da også blevet gennemført, nogle af dem fortrinsvis rettet mod oplevelsesøkonomien, som f.eks. Lysfestivalen. Festivalens hovedstrategi er at forbedre udviklingen for det lokale erhvervsliv eller iværksætterdynamikken gennem lokale initiativer. For at kunne gøre det, og under hensyntagen til Frederikshavns kendetegn, synes ideen om midlertidig geografisk nærhed for at stimulere læringen blandt byens aktører at være passende. Det er derfor relevant at finde ud af, hvordan denne nærhed er organiseret, hvem der er involveret, hvor lang tid de samarbejder og hvad resultatet bliver.

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Konklusioner
I alle vestlige lande er der mange byer, som befinder sig i en fastlåst situation (lock-in). Akademikere fra forskellige felter har forsøgt at dokumentere og foreslå måder til at slippe ud af denne fastlåshed eller lock-in situation. Desværre findes der ikke megen litteratur, der omfatter provinsbyer. Dette kapitel har fremlagt vidnesbyrd fra en lille by i et dansk udkantsområde.

Det påstås i dette kapitel, at byen har skabt en Lysfestival ved at benytte sig af oplevelsesøkonomien, specifikt i belysningssektoren. Projektet er ikke blot en festival, men har adskillige bestanddele, som har fremmet lokal læring, og i et bredere perspektiv kan det højne den lokale iværksætterkultur og økonomiske udvikling.

Referencer

  • Benneworth, P. 2004, “In what sense ‘regional development?’: entrepreneurship, underdevelopment and strong tradition in the periphery”, Entrepreneurship & Regional Development, vol. 16, no. 6, pp. 439-458.
  • David, P.A. 1985, “Clio and the Economics of QWERTY”, The American Economic Review, pp. 332-337.
  • Fløysand, A. & Jakobsen, S.E. 2008,”Searching for embeddedness of innovations in rural areas: a practice turn”, Conference Paper from Regional Studies Association: “Regions: The dilemmas of integration and competition?” 27-29 May 2008
  • Gregersen, B., Linde, L.T. & Rasmussen, J.G. 2009, “Linking between Danish universities and society”, Science and Public Policy, vol. 36, no. 2, pp. 151-156.
  • Hansen, N. 1991, “Factories in Danish fields: How high-wage, flexible production has succeeded in peripheral Jutland”, International Regional Science Review, vol. 14, no. 2, pp. 109.
  • Hart, D.M. 2003, The emergence of entrepreneurship policy: governance, start-ups, and growth in the US knowledge economy, Cambridge University Press.
  • Jensen, M.B., Johnson, B., Lorenz, E. & Lundvall, B.Å. 2007, “Forms of knowledge and modes of innovation”, Research Policy, vol. 36, no. 5, pp. 680-693.
  • MacKinnon, D., Cumbers, A. & Chapman, K. 2002, “Learning, innovation and regional development: a critical appraisal of recent debates”, Progress in Human Geography, vol. 26, no. 3, pp. 293.
  • Rosenfeld, S. 2001, “Networks and clusters: The yin and yang of rural development”, Exploring Policy Options for a New Rural America, pp. 103-120.
  • Tofler, A. 1970, “Future shock”, London: The Bodey Head Ltd.
  • Nielsén, T. 2005, Kultur- og Oplevelsesøkonomien i Region Nordjylland, Aalborg Samarbejdet.