In an economic environment where competitive advantage is ephemeral, business cycles are accelerating, and customers are becoming more savvy consumers, the quality of the innovation ecosystem is more important than ever for companies and cities to maintain their competitive advantage. Technological advances including mobile and cloud computing are continually lowering the barriers for new ideas and smaller firms to compete with incumbent firms. These changes allow for faster business cycles where experimentation and testing are integral to market success.
Deloitte's Shift Index, an index measuring these and other forces shaping the US economy, continues to rise. The index indicates the dramatic changes taking place across the economic landscape and the anxiety it is inducing. In meeting these volatile changes, their 2016 index stresses the importance of companies participating and harnessing the flows of knowledge rather than stockpiling knowledge within an organization. This advantage is now less about efficiencies and more about the network around them to quickly develop and deploy solutions. Companies are needing to draw on a vast array of expertise both internally and externally to compete.
Like others cities, Nashville's innovation capacity is essential to its economic resiliency and growth. As the economic climate has accelerated, the lifespan of larger established companies continues to diminish. It is critical that we continue to be stewards of our existing regional advantages and provide an ecosystem that enables businesses to thrive. The region's top industries healthcare, music, and publishing are at the forefront of these disruptive global trends shaping our economy. They are grappling with the move from vertically organized industries centrally focused on efficiency and scale to horizontal organizations relying on open; collaborative networks focused on the customer. Often horizontal organizational models can accomplish tasks faster and more efficiently than vertically organized firms. This evolution was in large part due to workforce mobility that accelerated the flow of information between organizations and the growing availability of venture capital to start new companies spun out of corporate research labs.
Collectively, on average over the last thirty years, new companies have been the largest driver of employment in the American economy as compared to established large and small businesses. However, recent research suggests the economic dynamism young firms offer maybe under threat. A healthy innovation ecosystem provides a fertile environment for new companies to form and new ideas to prosper. It does this by facilitating the bridging between industries and transposition of skills to create new market changing sectors that further improve our competitive edge. Companies are reaching beyond the boundaries of their organization to acquire the necessary know-how to