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Startup Cities for Public Policy 2.0

By: Adriana Peralta - @AdriPeraltaM - Oct 16, 2014, 1:14 pm

EspañolTechnology is not just about machines. It also has to do with new ideas and improved ways of doing things.

Many people consider the moon landing to be man’s greatest technological achievement. Others say it’s the internet, or some other means of modern communication.

The truth is, however, that the majority of the world’s population is immersed within our greatest technological achievement, without even realizing it: cities.

Our modern cities allow infinite and diverse human interaction 24 hours a day and seven days a week. They enable millions of people to live in the same place, without necessarily knowing each other, and simultaneously collaborate to achieve common goals, even if not done consciously.

Similar to the driving point behind Leonard Read’s I, pencil, few people appreciate the complete and brilliant world in which we interact. We often take cities for granted, not realizing their complexity. We interact with one another on daily basis without taking the time to consider the effects of something as simple as buying a cup of coffee.

However, despite cooperation and voluntary collaboration, all cities face their own set of problems, be they issues with transportation, water, communication, or lack of food, etc.

Over the years, public policies put in place to solve many of these problems have only worsened them or created problems of their own. This results from either the unintended consequences of public policy, or the inherent problems involved with central planning, which rarely succeeds in solving anything.

“Better governance through startup entrepreneurship,” is the message readers are greeting with upon entering the Startup Cities Institute (SCI) website.

This short sentence describes a cutting-edge initiative that aims at becoming a new way to implement policy reform. Startup cities are communities that put new public policy to the test, and allow for analysis of the results before policies are applied within the framework of large modern cities or countries.

Las ciudades emergentes como una nueva forma de abordar reformas en las políticas publicas.
Startup cities provide a new approach to public policy reform. (Startup Cities Institute)

In the essay “Startup Cities: A New Approach to Reform,” SCI explains the project in simple terms: “What are Startup cities? How do they work? How practical are they? How can they help reformers overcome the risk and complexity of political change? Do startup cities exist around the world?”

The complexity of political interactions become evident the moment a politician enters office. Politicians may, at times, have enough resources to follow through with the programs promised during their election campaigns. However, more often than not, politicians fail to fulfill long-term commitments, and generally do not understand the reasons for their failure.

Both politicians and entrepreneurs are usually confronted by the same obstacles when attempting to realize their goals. Even when making what appear to be the smallest of decisions, they face complexity, insufficient feedback, and uncertainty.

“Entrepreneurs often say, ‘A business plan rarely survives contact with the customer.’ For the same reasons of uncertainty and complexity, a reform rarely survives contact with the citizen,” reads the SCI essay, asserting that governments risk too much by implementing public policies without first carrying out a measurable pilot program.

Startup cities are autonomous municipalities created by a host nation that provide greater autonomy within the framework of special jurisdictions. In this way, they operate with greater independence in determining tax rates, public security policy, and education, among other things.

The project is politically neutral, and can serve as an independent entity hosting international courts, a different legal system, new transparency guidelines, or its own police force. Startup cities provide public policy with the same competitive dynamic that functions in the market and in technological development.

The most interesting pages of the essay explain the specific community benefits of implementing a startup city, such as the ability to mitigate risk by applying policy within a small, controlled area, rather than making far-reaching changes on a large scale.

Once the results of the public policy have been observed, the most effective reforms can be applied more broadly. Startup cities offer a clear benefit in this regard, since the data gathered will allow for meaningful discussion on both the advantages and disadvantages of any given reform.

Although many people are still unaware, this sort of model is already in place in cities throughout the world, such as Dabai, and has achieved great results. Other examples include the special economic zones in China that compete against each other under clear rules and allow for investors to choose which zone is best for them.

This excellent essay addresses a common misconception: although they share a similar origin, Zones for Employment and Economic Development (ZEDEs) and startup cities are not the same thing. Unlike ZEDEs, startup cities are focused on tax and regulatory policies.

In order to better understand what type of reforms could be implemented by a community, “Startup Cities: A New Approach to Reform” provides four specific examples: education, security, employment opportunities, and public-private partnerships.

The tools and puzzle pieces necessary to apply these ideas already exist. The objective of startup cities is not to change a nation, but rather produce information that will enable communities to apply new technologies and entrepreneurial ventures within man’s greatest and most complex creation.

Translated by Peter Sacco. Edited by Guillermo Jimenez.

Adriana Peralta Adriana Peralta

Adriana Peralta is a freedom advocate from El Salvador and a @CREO_org board member. She is a PanAm Post reporter and blogger, a 2005 Ruta Quetzal scholar, a trained engineer, and an SMC University masters student in political economy. She is also a Pink Floyd fan. Follow @AdriPeraltaM.