This post "Manufacturing startups head for the cloud - and your city" was originally posted on the Brookings Metropolitan Policy Program website on May 19, 2015. Mark Muro also wrote a piece for Wall Street Journal's blog on “The Wrong Lessons Companies L…
This post "Manufacturing startups head for the cloud - and your city" was originally posted on the Brookings Metropolitan Policy Program website on May 19, 2015. Mark Muro also wrote a piece for Wall Street Journal's blog on “The Wrong Lessons Companies Learn from Silicon Valley”. For more perspective on Advanced Manufacturing, you can read our 3-part blog series on the topic.
It’s old news that an explosion of Internet-based tools and services—think GitHub and Amazon Web Services—has made it easier and cheaper for entrepreneurs to transform their cool ideas into finished software products.
One result: The urban start-up ferment now energizing city innovation zones from Nashville, Tenn. to Boulder, Colo. has tilted heavily toward software. Actually making things—and manufacturing them—has remained a more avant garde pursuit for the Maker Movement.
Yet now that’s changing, with potentially big implications for cities. Thanks to the rise of an array of new tools, facilities, and services on the hardware side, a new “hardware renaissance” has begun to spread from Silicon Valley out across the U.S.
This renaissance builds on the spread of hobbyist “maker spaces” and rapid prototyping studios equipped with 3D printers enabled by design software. And it has the feel of an insurgency. But in the last year a number of developments have put manufacturing startup activity on a faster, more commercial, and big-time track.
Entrepreneur Mark Hatch has opened eight TechShop maker spaces in U.S. tech metros, such as the San Francisco Bay Area; Austin, Texas; Pittsburgh; and Washington. These urban centers function as open-access, community-based workshops and prototyping studios.
3D printing and the crashing prices of microchips, sensors, and other components now make it thinkable for a small company to design sophisticated devices at reasonable cost, whileKickstarter and other crowd-funding sources enable initial finance.
And now, a variety of specialized incubators and contract manufacturers available through the cloud of remote computing and other resources is making it easier for hardware dreamers and startups to obtain advice, support, and access to support services, including outsourced manufacturing. As related recently by the Wall Street Journal’s Chris Mims, companies likePCH International and Dragon Innovation are now available to manage contract manufacturing and otherwise “make manufacturing feel easy” to entrepreneurs or small companies. Likewise, Andy Rubin, the creator of the Android mobile operating system, announced in April that his new company Playground Global LLC will serve as a sort of incubator “studio” where entrepreneurs and small firms can focus on building new gadgets while Playground takes care of physical-world challenges: engineering, manufacturing, scale-up financing, supply-chain management, and distribution.
The upshot: A suite of tools and supports like the ones that have fostered the software boom are now becoming available for hardware manufacturing.
Which opens up possibilities. For his part, Mims imagines an age in which “new products—actual, physical products—will go from idea to store shelves in a matter of months.” Such an era could be beneficial for the U.S., given the nation’s advantages in creativity and cloud-based business organization, even if much of the resulting new production could occur offshore. Surely a surge of startup ferment would be energizing for America’s manufacturing sector.
But beyond that, such a surge could be transformative for cities. Currently, urban startup communities remain heavily virtual—all about software ideas and consumer-Internet ventures. That leaves urban economies narrower than they might be, and it likely forecloses on opportunities, since innovation is entwined with manufacturing. By contrast, the emergence of new cloud-enabled, incubator-supported manufacturing startups could widen the aperture. New synergies and new opportunities will be possible if physical-world inventors and entrepreneurs gain traction alongside virtual ones. Likewise, manufacturing enterprises could flourish without needing large exurban spaces. Ultimately, cities and their innovation districtswill benefit if they can channel more of the hardware-oriented tinkering and entrepreneurship that launched Silicon Valley in the first place.
In short, the new tools and supports for hardware startups could be really important for cities. If hardware startups become more like software ones, and the U.S. can keep more of its high-value manufacturing onshore, U.S. cities and metropolitan areas will be able to bolster technology development and ground it here, to the benefit of U.S. metros.
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On May 5, Joint Venture Silicon Valley’s Institute for Regional Studies announced an important milestone — Silicon Valley has reached 3 million residents. Orchards producing apricots, figs, garlic, and tomatoes have been replaced with the headquarters of …
On May 5, Joint Venture Silicon Valley’s Institute for Regional Studies announced an important milestone — Silicon Valley has reached 3 million residents. Orchards producing apricots, figs, garlic, and tomatoes have been replaced with the headquarters of companies such as Apple, Facebook, Google and Tesla. In a relatively short period of time, the Valley of Heart’s Delight transformed from an agricultural powerhouse to an international high-tech center of innovation.
In order to celebrate this milestone, Joint Venture released Research Brief: Population Growth in Silicon Valley. The report provides in-depth information about the demographics of the region and examines population growth as it relates to economic trends and immigration.
The study makes some interesting points:
The “Silicon Valley Demographic Clock” shows this growth real-time!
You can view graphics and download the full copy of the report at http://siliconvalleyindicators.org/snapshot/.Read less x
We are excited to announce that the City of Fremont recently received an “On the Ground -- Getting It Done Award” by ABAG for the Warm Springs Community Plan. The City of Fremont took home gold for its efforts on the Warm Springs/South Fremont Communit…
We are excited to announce that the City of Fremont recently received an “On the Ground -- Getting It Done Award” by ABAG for the Warm Springs Community Plan.
The City of Fremont took home gold for its efforts on the Warm Springs/South Fremont Community Plan. The Warm Springs project is a comeback story about facing seemingly insurmountable challenges and the vision and leadership to overcome them. Click here to read the full news brief, or better yet, watch this video which summarizes the story, complete with a few twists and turns!
For more background about the Warm Springs Community Plan, please refer to our previous blog posts on the topic:
The recent celebration of National Small Business Week provides a perfect opportunity to acknowledge the significant contributions small businesses make every day to our national and local economies. For example, did you know that over 50 percent of the …
The recent celebration of National Small Business Week provides a perfect opportunity to acknowledge the significant contributions small businesses make every day to our national and local economies.
For example, did you know that over 50 percent of the U.S. workforce owns or works for a small business? And, did you know that small businesses generally employ less than 100 employees, and some can generate annual revenue upwards of $2.5M?
It’s not surprising that small businesses are pillars of economic strength in our community. We are continually improving our services to help entrepreneurs grow and succeed in Fremont. For example, the City created a Business Ally position whose goal is to help small businesses through the permitting process. Our Economic Development Department staff provides additional connections to the state’s incentives program and links businesses to state and federal resources for hiring and training assistance.
Because a solid business plan and thorough understanding of finance increase the probability of business success and longevity, the City of Fremont partners with the Alameda County Small Business Development Center (SBDC) to offer business training workshops for free. SBDC has provided classes in business plan writing, social media marketing, and business finance, as well as other classes and services. If you’re a small business owner who would like to give input on what you would like to see covered in workshops that will be offered starting in September 2015, please take 5 minutes to fill out the 2015 Fremont Small Business Survey.
The Fremont Chamber of Commerce as well as Fremont’s Business Associations work with City staff to connect businesses to the resources they need in order to hit the ground running. Furthermore, the Chamber and Business Associations host networking and special events throughout the year to help businesses connect and grow. If you’re an entrepreneur, you can take advantage of these connections by becoming a member.
As the owner of a local Certificated Public Accounting firm, I know firsthand the importance of supporting small businesses when they are getting started, as well as after they’ve been established. The City of Fremont is here to help respond because we value the diversity and economic vitality that small businesses bring to our City.
From one business owner to another, Happy Small Business Week!Read less x
Last week, I co-authored a blog with Vipul Gore, President and CEO of Gridscape Solutions, which ran on Christine Hertzog’s Smart Grid Library blog on May 4, 2015. The blog talks about the benefits on public–private partnerships in promoting new technolo…
Last week, I co-authored a blog with Vipul Gore, President and CEO of Gridscape Solutions, which ran on Christine Hertzog’s Smart Grid Library blog on May 4, 2015. The blog talks about the benefits on public–private partnerships in promoting new technology.
Cities have a significant opportunity to lead by example when it comes to innovative energy solutions. But the pot sweetens even more when sustainable energy decisions also contribute to a City’s economic development strategy. In the case of Fremont, where clean technology is considered one of its largest industry clusters, public-private partnerships can promote the testing of new technology, help its local companies scale, and identify potential sustainability measures for City operations. Here’s how Fremont and Gridscape Solutions are crafting win-win scenarios.
The City of Fremont and Gridscape Solutions are teaming up to pursue a California Energy Commission (CEC) Electric Program Investment Charge (EPIC) opportunity. This state program funds technology demonstrations of reliably integrating energy efficient demand-side resources, distributed clean energy generation and smart grid components to protect and enable energy-smart critical facilities. This follows on a previously successful collaborative effort where Gridscape Solutions assembled a consortium of partners for a city EV charging infrastructure project, including the Fremont Chamber of Commerce, Prologis, Delta Products, and the City of Fremont.
The proposed project consists of deploying a microgrid at three fire stations within the City of Fremont. The close proximity of Hayward Fault line to these Fire Stations, the maximum load capacity on the transmission line, and the need to reduce grid dependency satisfy the most important grant requirements of providing energy savings, increasing electrical infrastructure resiliency, reducing carbon dioxide emissions and demonstrating islanding from the grid for up to three hours. Using the combination of renewable generation and battery technologies, the microgrid project could save the City of Fremont approximately $10,440 per each fire station and reduce CO2 emissions by 22,176 pounds per station per year.
The proposed microgrid design will provide at least three hours a day of power to the fire station in the event of a utility outage. The microgrid is also capable of responding to signals to proactively and seamlessly disconnect from the grid by using state-of-the-art microgrid controls, and advanced load controls. The implementation of the microgrid also serves to balance PV generation supply, efficient energy storage and campus loads to achieve the City of Fremont’s net zero energy goals by maximizing PV electrical energy usage behind the meter. During a utility outage, the power distribution may be isolated from the utility at the point of service by a microgrid inter-tie protection relay.
The primary goals of the project are:
The priority status cities place on these facilities, combined with the tremendous innovation and market opportunity for companies in this space creates a win-win scenario. When cities leverage industry expertise in their own backyards, society stands to benefit.
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Over the past several weeks, we’ve provided our thoughts on the Brookings Institution’s latest report that analyzes the state of America’s advanced industries, covering everything from the impact of this vital sector in driving sustained economic growth i…
Over the past several weeks, we’ve provided our thoughts on the Brookings Institution’s latest report that analyzes the state of America’s advanced industries, covering everything from the impact of this vital sector in driving sustained economic growth in the U.S., to the importance of a robust STEM careers pipeline restoring broadly shared opportunity for the middle class.
In our final installment in this series, we’ll focus on the report’s “call to action” for leaders in the private and public sectors, particularly at the local and regional levels, to work together in new and innovative ways to help drive global competitiveness. We’re happy to report that such initiatives are well underway right here in Fremont, like the transformation of Warm Springs into a world-class innovation ecosystem anchored in advanced manufacturing.
The top-level strategies for future success fall into three buckets: Commitment to Innovation, Recharging the Skills Pipeline, and Embracing the Ecosystem. Since our last piece focused on STEM education, we will take a closer look at both Innovation and the Ecosystem as defining features of the 21st Century workplace.
If innovation is what distinguishes U.S. firms, then it is incumbent on both the private and public sectors to “radically rethink their technology development strategies,” especially in the age of disruption. Specific suggestions include:
In Fremont, we couldn’t be more proud of companies like Seagate, Thermo Fisher Scientific, and Tesla who have made significant investments in their R&D operations to bolster their technology equipment portfolios. Their combined dollar investment totals in the hundreds of millions and suggests corporate competitiveness that must be reflected locally. Tesla also happens to be leading the way in open innovation models.
Furthermore, our Economic Development program has been steadily moving away from chasing new tenants, to working with our young, innovative companies such as cleantech stand-outs Enovix and SunPower. We’ve also nurtured partners like CalCEF, who are focused on technology transfer with our local National Labs.
And we can’t talk about innovation without connecting to ecosystems, because “innovation and skills development do not happen just anywhere.” The clustering effect is well-documented and allows for “knowledge flows, and access to skilled workers and regional supplier networks.” Brookings notes that decades of offshoring have contributed to disinvestment, and industry clusters are in desperate need of shoring up. Ecosystem strategies include:
In Fremont we aren’t shy about touting our local advanced manufacturing ecosystem as one of our best incentives, and increasingly, we are finding that industry firms understand the value this brings to their businesses. We have blogged extensively about the many exciting regional partnerships that are enhancing this sector, from the Silicon Valley Manufacturing Roundtable to REDI — a Regional Economic Development Initiative sponsored by the Silicon Valley Chamber of Commerce. We are particularly excited about Fremont’s Warm Springs Innovation District which is centered on the varied needs of Advanced Industries whether it’s the 5 million-square-foot Tesla Factory or the Workspace Fremont co-working facility.
Brookings concludes their report by emphasizing the need for cross-sector collaboration to strengthen the vitality of Advanced Industries through “innovation, technical skills, and dense ecosystems”. If we do collaborate, the result will be a game-changer, not only for the nation, but also for our local communities whose future depends on our collective success.Read less x
We thought it would be fitting to wrap up our cleantech Q&A series by catching up with Jeff Anderson, managing director of California Clean Energy Fund (CalCEF), a groundbreaking public-private partnership that aspires to quicken the deployment of cle…
We thought it would be fitting to wrap up our cleantech Q&A series by catching up with Jeff Anderson, managing director of California Clean Energy Fund (CalCEF), a groundbreaking public-private partnership that aspires to quicken the deployment of clean energy technologies. He’s also the president of CalCharge, which he refers to as the “center of gravity” for California’s energy storage cluster. To find out more about CalCharge, be sure to check out Jeff’s latest post here.
While we’re not sure when Jeff manages to find time to sleep, we sincerely appreciate the important role he plays in the acceleration of cleantech innovation. Read on to learn more!
City of Fremont: Can you tell us more about the relationship between CalCEF and CalCharge? What are some of the things that CalCEF and CalCharge are aiming to accomplish?
Jeff Anderson: CalCEF is a family of nonprofits that are focused on creating institutions and investment vehicles for the clean energy economy. Back in 2012, CalCEF teamed up with Lawrence Berkeley National Laboratory (Berkeley Lab) to launch CalCharge, which helps to connect California’s battery technology companies to the world class research and academic facilities located here.
California has one of the largest concentrations of energy storage companies in the country. Our ultimate goal is to create a regional ecosystem for innovation in energy storage and help companies get the resources they need to succeed in this competitive environment.
Fremont: Very inspiring! How does the City of Fremont fit into all of this?
JA: We view the City of Fremont as a strategic partner. What I love about Fremont’s economic development team is that they see cleantech as a regional opportunity, and their willingness to collaborate is unparalled.
Fremont is a natural place for energy storage companies to go, and thrive, especially as the Warm Springs Innovation District develops into a major regional employment center.
Fremont: Would you say the future of cleantech looks promising for Bay Area companies?
JA: Overall, yes. We’re seeing several trends emerge — demand for energy storage is growing; solar prices have declined; wind energy is also growing more competitive. People are much more willing to shift towards cleantech — it just makes more economic sense.
For the Bay Area specifically, one of the questions that we’re trying to answer is this: How do you accelerate the movement of an idea from innovation to installation?
First, you need to have a center of innovation. The second piece is the market. California is home to one of the largest cleantech markets in the world, so we’ve got that covered. The third piece is manufacturing. What people have realized in the last decade is that setting up your R&D in China is a bad idea. Having to work through language barriers and the time difference can slow down the innovation cycle significantly. Most cleantech companies now understand the importance of consolidating R&D and manufacturing in one location. Fremont’s cleantech innovation ecosystem is uniquely tuned to support all these prerequisites.
Fremont: Typically, what are the biggest challenges that cleantech companies have to overcome?
JA: CalCEF recently interviewed around 100 different cleantech CEOs from around the globe, and the top-line answer that we got was money. Cleantech doesn’t fit into the traditional VC cycle — especially in the Bay Area. The traditional VC cycle involves a three- to five-year pay back. When you’re building an app, there are no regulatory, scientific, or manufacturing constraints. However, when you’re dealing with cleantech, you’re dealing with a slower innovation/demonstration/commercialization cycle.
The second challenge is that it can be very difficult to find the right kind of co-working space. Traditional co-working spaces cater more to the app developer crowd and don’t have the scalability and flexibility that a cleantech startup needs. We need a new model for co-working spaces that allows for future growth — beyond just a five-person office.
Third, once you have your prototype, finding a place to pilot and demo in a real world environment can be very difficult. It’s all about encouraging building owners, land owners, and city governments to allow for early deployment and testing opportunities.
Fremont: It’s pretty evident that you love what you do. Where does your passion for the cleantech industry stem from?
JA: I waited about 15 years for cleantech to actually become a “real thing.” And when it finally did become a viable industry, I wanted to figure out how to be a part of it. Over the years, I’ve discovered what keeps me going is this drive to create connective tissue within the cleantech innovation system. There are so many bright, talented individuals out there. I want to find a way to bring them all together, identify where the resource gaps are, and figure out how to fill them. It’s similar to the satisfaction you get when completing a giant jigsaw puzzle.
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When the International Council of Shopping Centers (ICSC) convened in Fremont again this year for the annual Northern California Alliance program, the theme was “Repositioning Large-scale Retail Assets.” Rapidly changing dynamics in retail coupled with th…
When the International Council of Shopping Centers (ICSC) convened in Fremont again this year for the annual Northern California Alliance program, the theme was “Repositioning Large-scale Retail Assets.” Rapidly changing dynamics in retail coupled with the rise of the millennial generation are forcing owners and managers of our region’s major retail assets to think about how to stay relevant. The event featured an expert panel — with representatives from a traditional mall, an urban downtown district, and a large power center — that discussed their strategies for evolution.
Rick Hearn, VP of Leasing for Vestar Properties
Vestar Properties assumed management of Fremont’s Pacific Commons Shopping Center in 2013 and was immediately confronted with an interesting question: How do you continue to improve upon an already successful retail center? Just 10 years old, Pacific Commons presented well and had been experiencing leasing success and strong rents. From Vestar’s point of view, deep engagement with the community, the City, and the retail community was key to understanding how consumer needs and preferences had changed so that they could adapt the center accordingly.
For Pacific Commons, elements like wayfinding signage, updated (more drought-friendly) landscaping, refreshed building facades, and activated plaza spaces will enhance the center and better align it with the newest phase, The Block.
Mike Rhode, General Manager of Vallco Shopping Mall
Mike Rhode made no bones about the fact that Cupertino-based Vallco Mall is ready for reinvention. Despite its prime Silicon Valley location, the strength of Stanford Shopping Center to the north and Westfield Valley Fair less than five miles away to the south makes for daunting competition. In addition, fractured ownership among three of its department stores made it nearly impossible for any single buyer to negotiate a sale of the entire site … until now.
Sand Hill Properties has successfully assembled all 50 acres and is in the process of creating a plan to redevelop the site. Recognizing the true value of Cupertino real estate (think Apple Campus) and equally strong demographics, it sees this as an incredible opportunity to take a “blank canvas” and start fresh. Sand Hill is preparing a plan in close partnership with the community that will likely include a mix of retail, residential, office, and other amenities. Rhode suggested that entertainment and tapping into the innovation spirit will be key drivers for this project — a truly unique situation that is probably not replicable anywhere else.
Steve Snider, District Manager of Downtown Oakland Association
In 2009, the Downtown Oakland Association launched a property-based business improvement district to help revitalize the area, which struggled with graffiti, loitering, and general blight. Few people expected what a transformation these efforts would lead to — today Downtown Oakland is recognized as one of the hottest Bay Area urban districts.
With strong property owner cooperation and a $2.5 million budget , the district has undertaken various right-of-way beautification projects, safety campaigns, and arts events like “First Fridays.” Key to the success of the program has been the Association’s “Ambassador Program,” where team members are “hired for personality and trained for skills.” As the face of the program, these individuals have created a sense of hospitality in Downtown, and the grassroots nature of this work has attracted swarms of new businesses to the area.
COMING UP AT NEXT WEEK’S SILICON VALLEY MANUAFACTURING ROUNDTABLE MEETING! Options for Growth: Questions to Consider When Seeking Capital As a manufacturer, you’re probably offered plenty of advice on how to improve efficiency, get ISO Certifications, o…
COMING UP AT NEXT WEEK’S SILICON VALLEY MANUAFACTURING ROUNDTABLE MEETING!
Options for Growth: Questions to Consider When Seeking Capital
As a manufacturer, you’re probably offered plenty of advice on how to improve efficiency, get ISO Certifications, or find new equipment. But, where do you find the money you need to grow?
It all depends on the circumstances, such as how the money is to be used, how much money is needed, and when it’s needed. For instance, are you constructing or buying a building to expand capacity, entering new geographic markets, acquiring another company, or needing working capital to support revenue growth? All of these situations present different funding paths that will impact your company in very different ways.
Most companies try to use as much bank financing as possible because it is considered the least expensive, both in terms of rate and of avoiding giving up any ownership interest in the company. However, commercial banks are highly regulated and risk-averse, so they may not be able to provide the funds you require. This may suggest seeking alternative financing sources, such as asset-based financing, mezzanine debt, or equity.
Before seeking financing you should conduct an analysis of your company beginning with its current performance, the financing dollars required, the impact additional capital will have on revenue and profit, and an assessment of management, infrastructure, and other organizational changes required to accomplish growth objectives. Financing sources will be sure to ask such questions.
At the same time, you need to consider your end goal and the benefit(s) or cost(s) of using non-bank financing. Is your goal to go public, be acquired, achieve shareholder liquidity or, stay private? If you don’t have sufficient capital, can the company survive? Will growing give you a competitive advantage or dominant market position? Are you willing to give up equity in the company and have investors hold you accountable? Can margins support a higher cost of debt?
There are pros and cons with every form of financing. The “devil” is in the details, and what may look appealing on the surface, may not be as good as you think. Always perform careful due diligence on the various sources of funding and different structures presented. And consult with accounting and legal advisors for guidance and insight that will help you negotiate acceptable terms and conditions.
If these are questions you are considering, please join us at the next Silicon Valley Manufacturing Roundtable meeting on Thursday, April 30th at 8 a.m. at Asteelflash in Fremont. (RSVP by clicking on the logo below) I will be moderating a thought-provoking panel discussion with experts on this topic with the goal of helping companies in growth mode understand the different paths and potential implications.Read less x
Metropolitan regions all over the country — and the world — have been doing it, and finally, we are too! Just what am I talking about? Regions in our globally competitive economy are organizing to promote their strengths and brand themselves in unpreceden…
Metropolitan regions all over the country — and the world — have been doing it, and finally, we are too! Just what am I talking about? Regions in our globally competitive economy are organizing to promote their strengths and brand themselves in unprecedented ways. And it’s paying off — just look at success stories like Austin, Texas, and New York City, and you soon realize the potential of these regional strategy investments. The greater Silicon Valley is a little late to this party, due in large part to a long history of organic economic growth fueled by abundant innovation. But the time has come to reconsider regionalism from an economic development standpoint.
Led by the San Jose Silicon Valley’s Chamber of Commerce, the Regional Economic Development Initiative (REDI) is a new private-public partnership engaging stakeholders in a collaborative effort to create jobs by focusing on Silicon Valley’s most promising economic opportunities. The first phase of REDI included an analysis focused on the changing dynamics of Silicon Valley’s core economy and a growing interdependence of major export engines, support industries, and the service economy. A new wave of innovation, like the Internet of Things (IoT), is a key driver of future opportunities in Silicon Valley. This is creating a number of new opportunities for companies to connect with each other and with public sector partners to leverage exciting innovations in:
The next stage in the REDI process will be to engage private sector business leaders in each of these opportunity areas to lead the planning and execution of REDI’s action plan. The initiative will recruit influential members of the private sector (“civic entrepreneurs”) who are committed to the success of the region and understand the benefits of working collaboratively. While previously, the private sector collaborated to work on infrastructure and transportation issues, REDI seeks to be holistic and unified, working to improve conditions inside and outside of businesses.
This is a significant milestone in Silicon Valley regional relations, and Fremont has a critical role to play in this conversation, particularly regarding Agile Manufacturing and Research & Development. Look for updates in the coming months as action plans develop, and let’s look forward to collectively strengthening the Bay Area’s competitive edge.
REDI Phase 1: Initial Findings - March 2015 - pg. 5Read less x
Welcome to our blog – Takes from Silicon Valley East! Our view is slightly different here on the east side of the bay – from the Mission Peak backdrop to the advanced manufacturing companies that dot our boulevards. As we become more urban and strive to interpret the business issues affecting our innovation economy, we want to share with you our observations, insights, photos, arguments, agreements, inspirations and CEO interviews – and here on our blog is exactly where we plan to do this.