I was intrigued by Mayor Harrison’s recent blog article that outlines important themes for innovation growth. For those of us who research and follow economic ecosystems, Mayor Harrison’s article was spot-on. For the lay person, the discussion is always clearer with an example from real life. It is often difficult to see what the ramifications are 20 years down the line for economic concepts that apply today. One example of what the mayor is describing comes from the January 17th issue of The Economist: “Oxford v Cambridge, Trailing in its Wake.” This article illustrates the power of nurturing the local economic ecosystem.

As background, Oxford and Cambridge are two of the oldest and most renowned universities in modern western civilization. Both are 60 miles from London; both are elite prestigious research universities; both are surrounded by quaint communities; and both have similar political leanings. However, starting in the 1970s, Cambridge undertook some major changes that produced stark economic differences between these ancient rivals.

One of the major decisions was increasing the available housing stock to ensure long-term economic growth. In 2014 alone, Cambridge added over a thousand new homes, three times what was produced between 2009 and 2014. In comparison, only 60 homes were built in Oxford last year. Providing new housing stock makes it easier to recruit top-notch professors, Ph.D. candidates, and, ultimately, new high tech companies to the Cambridge area. The end result — a 19 percent increase in employment for Cambridge over Oxford; all the while preserving Cambridge’s “quaint quotient” which further attracts new companies. Clearly Cambridge understands supply economics better than Oxford. The results were so stark that in 2014, Oxford civic leaders visited Cambridge to better understand the miracle. The full story in The Economist describes many more of the ecosystem differences.

No one can predict the actual long-term impact of any particular action a community might undertake. However, the economic ecosystem principles that the mayor described have proven time and time again to be the better course of action, assuming that the community wishes to grow and create employment opportunities for the next generation. From what I’ve witnessed, Fremont is well on track to maintain its role in the world economy.

Source: Economist, Jan 2015.