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Competing Cities

· Social Impact Invest

“Start your own company. Start your own community.

Start your own currency. Start your own city.”

- Balaji Srinivasan

It's one of the most exciting experiments of our time, fueled by different developments of recent years. Projects like Culdesac and Prospera are leading the way, and many can't wait to jump on board. Around the world we're seeing the rise of the Startup City, in various forms. It's completely changing the way we think about how we currently live and how we will live in the future.

For 'outsiders', the idea of technologists building their own cities might seem like a new way of seperating themselves from the rest of society. Especially in the US, where the media has this strange ongoing battle with the tech world, new concepts are explained in a way to discredit tech entrepreneurs. However, if we take a closer look at how these cities could benefit the world, one of the most important reasons is probably this one: “The path to reform municipal America is the startup city, just as the path to reform corporate America was the startup.” – Balaji S.

Balaji and Naval speak about the 'exit' as a way to create a better alternative. That better alternative can then serve as an example for how things can be changed within existing (failing) systems. If we can create models that prove that there are other and more efficient ways for cities to service the people who live in them, that would be a big step towards structural change in the way we think about governance.

“Exit enables alternatives. Alternatives enable reform.” 

– Balaji S.

When building a new city, there are different (legal) options and points of focus. Charter cities for example are not subjected to the laws of the country or state, but are basically autonomous places with their own laws in place. The Nevada Innovation Zones project is one of those charter city initiatives created to experiment with ways to increase economic development.

The local laws charter cities are allowed to implement can be catalysts for their growth. They are designed to attract investors by offering conditions that convince companies to invest large sums of money. New city alternatives can also be built in the form of startup cities and smart cities. Both can have different types of governance, set up and end goals.

In the past we were practically forced to live in the city (or nearby) where we worked. The presence of large companies and their workforce, ment more taxes collected by city hall. Together, this led to a stronger local economy, and the creation of better infrastructure. This flywheel created more and better jobs, and of course more people moving towards those cities in search of opportunities.

Technology has given us the option to rethink the way we live and work. The Covid-19 pandemic has accelerated the remote work revolution, which was slowly growing in recent years. The pandemic was a big test for a lot of companies. Many made the decision to close offices permanently, and are now hiring globally. Workers began to look for cheaper homes in tax friendly states.

Cities will slowly loose a good part of their 'market share'. Places like New York will always attract people who dream of living and working there, but there are many other large cities around the world who had a monopoly on jobs and now need to take a different approach. One of those is San Francisco. The city is facing huge social problems at the moment while seeing large numbers of high earners (and tax payers) leave the city for alternatives across the country and even other countries.

Cities are already competing for remote workers. Examples of initiatives are the Tulsa Remote program, which offers a grant for people who choose Tulsa as their temporary home. Hawaï is offering perks such as free flight tickets to remote workers. Outside of the US, Estonia has been working years on attracting people into their ecosystem. One of the ways the small country is competing in the digital world is by granting entrepreneurs 'e-residency'.

Different villages in Spain are using the remote work revolution to support the economic development of regions that were declining in recent years. It has created new opportunities around housing and leisure. There is also the potential increase in overall spending, especially interesting for small local businesses.

Remote workers are just a part of a large group who can now live and work from wherever they choose. Like minded people who have been building communities online for years are starting to experiment by transforming those online communities into physical ones. The idea of living in a new town or city surrounded by people with the same goals, built in ways to bring the best out of all participants, will attract millions of members in the coming decades.

Ultimately, the creation of an alternative city is to make (local) government work for the people instead of the other way around. In this new reality most cities will have to adapt and take on the role of a service provider. Their main concern will be how to attract and keep people who live, spend and build around the city. Miami mayor (and 'CEO of the city') Francis Suarez is leading the way, writing the playbook for the modern local politician.

Suarez was even responsible for placing a huge billboard in San Francisco for people who might be considering a move to another city: “Thinking of moving to Miami: DM me”. With initiatives such as CityCoins that provide a new way of funding and the developments within the world of DAO's, the possibilities can become endless for local governments that embrace the role of the enabler.

Countries competing

One of the most interesting things I've read recently was a Twitter thread started by the amazing Vitalik Buterin, one of the founders of Ethereum. Vitalik follows about 230 people, and they could all reply (only they) to his Tweet, in which he announced an AMA experiment. Most of the people who joined seem to live in the future like Vitalik does, so I took my time to read it all.

I've been thinking a lot about life in a borderless future and the implications for countries such as Cabo Verde. Writing about Remote Work and Talent Development has helped me get closer to a vision of how our future could look if we conciously invest in young entrepreneurs.

I see the same thing happening with these type of developments as I see with BTC. Governments can either try to embrace these changes and be among the first to do so, giving them a head start. Or, if they choose to fight against these changes, they have a big chance of being left behind. Only to come around eventually when there is no other alternative then to adapt. In these cases upside will be much less than that of the innovators.

Eventually all these 'experiments' will create better places for us all to live in.

Read Balaji's writing here: The Start of Startup Cities: