Cities that will succeed in the 21st Century will have to be well managed, vibrant, educated, have raw materials, be entrepreneurial and have available capital, according to ULI senior resident fellow and former Pittsburgh Mayor Tom Murphy, the Klingbeil Family Chair for Urban Development at ULI. In addition to building on the innovations Murphy suggested at an industry roundtable on human capital as an economic driver at the ULI Spring Council Forum in Phoenix, Arizona, on May 19, Melina Duggal of RCLCO said that successful economic development in cities will depend on their job infrastructure and their employment cores.

Well managed cities deal with problems like New York did when it reduced its number of homicides per year from 2,250 to less than 500 in less than 20 years. Vibrant cities invest in public amenities like Chicago’s Millennium Park.  Educated cities exploit their research institutions as the Raleigh-Durham-Chapel Hill area has done. While raw material in the industrial economy was coal that came out of the ground, in today’s knowledge economy it takes the form of research and development (R&D) expenditures—some $4 billion a year in the U.S., of which the federal government contributes 37 percent. Murphy asserts that R&D spending remains the U.S.’s competitive advantage even today. Entrepreneurial cities have the institutional capacity to execute public-private partnerships. About 60 percent of U.S. venture capital flows into just three metros: Silicon Valley and the Bay Area, Boston, and New York, but others like San Diego are learning how to attract it as well.

RCLCO’s research suggests that there are similarities in employment cores throughout all metro areas: they have favored quarters, they are correlated to the number of jobs (30-40 percent in each metro are located in cores), they are about 5 miles apart, and they are located along major transportation routes and especially at interchanges. RCLCO has developed a typology of employment cores, which include urban centers, catalytic (purpose-built), industrial, favored quarter office, historic satellite localities, and retail. But cities need to pursue both infill and “better” (i.e., more compact and walkable) greenfield cores to be competitive, says Duggal.  Talented companies and people are looking for the next great place. The question Duggal says cities need to ask (and answer) is how they can facilitate its creation to attract them.

One example of a catalyst employment core is the Orlando, Florida development of Lake Nona, built by a subsidiary of the Tavistock Group. This life-sciences employment cluster includes a research component (Sanford-Burnham Medical Research Institute), a clinical component (Nemours Children’s and a Veterans Administration hospital), an educational component (Valencia Community College and the University of Central Florida medical school), all of which will create a commerce component. Richard Levey, of Lake Nona Property Holdings, says that the life-sciences value chain goes from having the right mix of institutions, to drawing top talent, to receiving grant funding, to achieving technology transfer, to value and job creation. Levey’s additional components for success are creating a great place for people to live close by, fiber optic infrastructure, regional mobility, and worldwide accessibility. Lake Nona’s life-science cluster will have between 4,200-5,000 jobs and a $5.2 billion impact on Orlando’s economy.