Remeasuring assets

Daniel Yankelovich, the renowned American pollster, helpfully reminds us:

The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can't be measured or give it an arbitrary value. This is artificial and misleading. The third step is to presume what can't be measured isn't really important. This is blindness. The fourth step is to say that what can't be easily measured really doesn't exist. This is suicide!53

On some basics like value-added created per employee or the number of unemployed, a city may be lagging. These basic comparisons are useful, but there is a bigger story. The rethinking process requires places to remeasure themselves according to their self-defined strengths. For example, when I assessed indicators in Adelaide, I found that predominant measures of success and failure underplay its strengths or often push the city into the wrong priorities. With indicators such as GDP growth, we see relative decline. However, while these need to be taken seriously, they do not tell the whole story. A traffic jam in Los Angeles increases GDP, as does the resulting pollution that causes ill health. Crime rates jack up sales of security devices. GDP signals can thus guide us into wrong policy and investment. Or consider the value of time gained by living in Adelaide, 'the 20 minute city', as compared to a Sydney. What are the benefits of proximity? How much time is saved, perhaps an hour a day by 100,000 people? I calculated this at around 250 million working days a year. What is this worth? Perhaps some £25 billion.

If people and their capacity to contribute to a city's future are the key, why do we not measure the costs of not investing in people? For example, the lifetime cost of an unemployed person is roughly AUDI million, while the lifetime benefit of a plumber is perhaps AUD1.8 million or that of an accountant roughly AUD4 million. The taxes paid might amount to from AUD600,000 to AUD1.4 million, the cost of an educational programme is perhaps AUD100,000. The cost of only asphalting 1km of an existing two-lane highway is AUD1 million. What ultimately contributes more to GDP? A newly laid kilometre of road or 10 transformed people contributing to the local economy whose lifetime taxes would more than pay for the road in any case?

Benchmarking, when it emerged two decades ago as a means of fostering improvement in business and elsewhere, had positive impacts. Cities took to the idea with vigour, constantly comparing themselves with others, copying what worked and pushing best practices. This is fine, but increasing negative impacts are emerging. Most importantly, it can stop creativity and innovation as, by definition, benchmarking is a strategy of following, not an exercise in leading. Often it avoids defining strategy appropriate to local needs and can distract from identifying unique local resources.

If nurturing and attracting talent is central to most cities' futures and we are worried about the brain drain, are we tracking leakage of talent? This might be done by tracking not only graduates that leave, but also mid-career professionals, or through peer-group assessment within fields such as the arts. In turn, are we tracking the talent coming in? The indicator of indicators may be the 'talent churn', because we know there is a correlation between talent and generating wealth, solving problems of social cohesion, or coming up with inventions and innovations. Even if creativity seems too complex to measure, there is a wealth of proxy indicators both quantitative and qualitative. These include those - cited by Richard Florida54 - that, while contentious, draw on a body of data to develop a number of indices which he then uses to develop correlation matrices and rankings of cities. These include:

• the creative class index - the percentage of creative workers in the labour force;

• the high-tech index - the size of software, electronics and engineering sectors;

• the innovation index - the number of patents per capita;

• the talent index - the percentage of college-educated people in the population;

• the gay index - the concentration of gay couples in the population (a proxy or lead indicator for diversity); and

• the bohemian index - the concentration of artistically creative people (artists, writers and performers) in the population.

These are a good beginning, yet they do not highlight (nor do they claim to) the fine detail. This needs to be elaborated more specifically, including measuring international connectivity or density of communications assessed by telephone calls and internet uptake, or levels of organizational networking. In the end, international peer-group assessments of various fields are the most dependable.

More comprehensively, creativity might be assessed through a biannual creativity audit to assess the city's creativity potential. Such an audit provides a confidence-building foundational stone, as literally hundreds, if not thousands, of people emerge as the real drivers of an invigorated place. It is likely that they will represent clusters of achievement and potential. It is likely, too, that some do not know each other and operate in silos.

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