Nashville has experienced tremendous growth over the last decade and continues to attract people from all over the country at an unprecedented rate. The city’s hospitality industry, construction boom, and business support services have been and continue to be the primary drivers of these gains. Our low-cost and high quality of life environment has given us a clear advantage when attracting the back offices of successful companies. As local firms provide services and construct new offices and homes for these businesses and residents, they have further accelerated the city’s economic surge. It is easy to get caught up in the limelight of the accolades and praise Nashville continues to receive and lose sight of the changing economic landscape. During this boom, our core industries that serve as the foundation of the region’s economy such as healthcare, music, publishing, and advanced manufacturing are experiencing incredible market changes and are under a sustained threat of disruption.
Our success has overshadowed the reality that the ecosystems of our competitive peers Austin and Denver have created over twice as many funded startups and have attracted over twice as much venture capital investment per capita. Between 2011-2015, Nashville has generated a fraction of patents compared to our peers. Even with our high growth rate in technology talent, we consistently ranked below our peers and had considerably fewer jobs than would be expected for a city our size. Our peers aren’t slowing down. All of the selected peer cities are posting over three times the amount of absolute job growth in tech jobs as compared to Nashville.
Additionally, we are not taking advantage of the incredible research happening at the city’s local universities. With almost $700 million in R&D funding pouring into these institutions (of which Vanderbilt University received the bulk at 94%), very few local companies have been created to take advantage of this research. Nor has a significant cluster been built around these institutional assets. Much of this knowledge and know how remains confined to the campuses and in the labs.
The continued accelerated business cycles and digitization of all industries have put a premium on a region’s capacity to provide a platform for companies to collaborate and innovate. As solutions are increasingly becoming more complex and the speed of change increases, organizations need to have access to the best talent inside and outside their walls. Nearly 50% of companies report their most valuable product innovations originate from external sources. As firms expand the use of external knowledge, the economic landscape is becoming more horizontal than vertical. This evolution values the flow of information and is making the highly functioning innovation ecosystem a significant regional advantage for cities. For our future prosperity to continue, it is critical that we remain stewards of our advantages and provide an ecosystem that fosters the formation of new innovative companies and enables existing firms to thrive in this new economic landscape. It is about:
Creating leading companies that export their products and services to the world rather than only providing regional services to the local economy;
Homegrown companies that are more likely to invest in the community, and;
Realizing our full potential.
The truth is the city shapes our social networks upon which innovation is dependent. It relies on the density, diversity, and effectiveness of these networks. Our proximity with one another and the overlap of our daily routines have a profound effect on the generation of new ideas, and with whom we collaborate and develop social ties between. The frequency of availability and awareness of one another further increases the probability of these connections forming, passively maintaining relationships, and building trust within the network. All essential ingredients to innovation.
The Nashville Innovation Project recognizes every organization has a unique innovation culture. The project’s focus is on the external factors that shape and reinforce these strategies. Nashville’s scattering of innovation infrastructure and isolated clusters has diluted us of our potential by making it harder to connect. As a result, we have to work harder to ensure a diverse resource-sharing network between the various clusters. Innovation is at these intersections and to mine them we must find solutions that knit the community together and create an ecosystem greater than the sum of its parts.
Nashville’s economic future will depend upon the city’s ability to innovate and adapt. Even during this period of historic strength, it is crucial to ruminate on the direction and future of our city. We must decide if we are content with being only the best place for back offices of the world’s most innovative companies, or if we’re willing to foster the creation of those leading companies ourselves. To realize our region’s full potential and export our ingenuity and creativity to the world we need to ensure the essential components of a successful innovation ecosystem are present and working.
The Nashville Innovation Project is the culmination of over two years of exploration into Nashville’s innovation ecosystem and deep dive into the mechanics of innovation. Our 2017 Innovation Report summarizes our findings. Over the next year, we will publish the full report on this site. Additionally, we want the site to be a place for making the wonderful and exciting innovative activities happening within our city visible.
It’s a journey of exploration into what it means to be an innovative city, and the beginning of a conversation about the future of our own city - one which we hope you’ll join.