Revisualizing soft and hard infrastructures

Many assets are hidden or invisible. One such is soft infrastructure - the enabling and connective tissue that makes a creative milieu or clusters work. Soft infrastructures are the atmosphere, ambiance and milieu which the hard infrastructures enable. They are expressed in the capacity of people to connect, inter-relate and generate ideas that turn into products and services. They include too the talent of people, measured not only by educational level but also by imaginative capacity. But soft infrastructure is often neglected, as some feel it is difficult to quantify the precise economic value of a system of associative structures, networks, connections and human interactions that underpin and encourage the flow of ideas between individuals and institutions to generate the products and services for wealth creation.

The network idea is an emblem of the age of the 'new economy'. The paradox is that we know the networks make things happen, but do not value or sufficiently invest in them because they are not tangible. The tools we have, such as industrial codes for measuring such activities, do not track in a sufficiently fine-grained way how the trade in services and ideas operates or how networking might add value.

The notion of infrastructure needs rethinking. The hard is the container within which the soft contents (the value-added) are created. Hard and soft are mutually interdependent. Yet the physical is usually privileged. The milieu is people and place together, a physical setting in which a critical mass of entrepreneurs, intellectuals, knowledge creators, administrators and power brokers can operate in an open-minded, collaborative context, and where face-to-face interaction creates new ideas, artefacts, products, services and institutions.

The network capacity that lies at the heart of the creative milieu requires flexible individuals and organizations working with a high degree of trust, self-responsibility and strong, often unwritten, principles. The success of networks is based on very traditional qualities, such as involving people or organizations you like and who like each other, having a core of active people sharing responsibility, and having a sufficient budget, so that not all activity is based on voluntary input. Most successful networks combine an informal atmosphere with focus. They feel spontaneous, creative, and stimulating to their participants and are conducted with a spirit that does not drain the lifeblood through rigid procedures. Networks that survive longest are adaptable and assume each member has valuable knowledge and a contribution to make, otherwise they fall into simple information sharing. This generates a willingness to share and to contribute to the success of the network for the greater good.

At times this means submerging self-interest for the greater good, for instance the Italian clusters in the smaller towns that are part of the Third Italy, such as Carpi and Prato in textiles, Arzignano in leather, Sassuolo in ceramic tiles or Manzano in furniture. There is customized public support for a wide spectrum of business development, which involves companies in collaborative competition -joint promotion, the organization of fairs, access to information on the evolution of markets or technology, the bulk purchase of input ingredients, consultancy and training. This can generate dynamic competitiveness, which helps accumulate technical know-how. It implies manifold relationships and interaction which favours spontaneous mechanisms of specialization, incremental innovation and the creation of enterprises and in the process pushes up quality. Intermediate public structures play a vital role by encouraging a high degree of involvement of firms in common initiatives through which firms have a sense of being part of a larger system. This often leads to collaboration and the pooling of resources.

The health and prosperity of the creative network largely determines the prosperity of each individual company or creative initiative and even the geographical area in which it operates. Unless the milieu thrives, the inspirational flow that comes from being part of it dries up. Pure self-interest causes the milieu to atrophy. Trust is a central feature of the way a creative milieu operates. A culture of collaborative competition is a precondition for such an environment to work.

We are entering a world of potentially almost limitless connection between people, organizations and cities, where constraints of time and place are evaporating. How do you make this potential connectivity effective without becoming overloaded? It involves selectively shutting off and selectively opening out. Saying 'no' to network opportunities as well as saying 'yes'. Strategic intelligence is key. It is a combination of the analytic, practical and creative; an attitude of horizon scanning that helps in the creation of foresight, understanding the dynamic implications embodied in the present, seeing the whole as an organic system and seeing how parts interact and relate to each other to serve the city's aims.18

Networking capacity occurs at various levels: between individuals or organizations, city-wide and between cities. The challenge is to translate the known, even clichéd, generic skills of personal networking to the city level. These qualities range from the qualities associated with creativity, such as curiosity, to others like 'gift of the 'gab', energy, listening capacity, understanding others' viewpoints, relationship skills, interest in others, and the ability to inspire or empathize. The networking capacity of the organizations of a creative milieu is more than the urban equivalent of an 'elevator speech'. Typically these summarize what you do in 30 seconds or hook your listener to being interested in you, because you ask good questions and are interested in them. For organizations, the networking type and attributes depend on purpose - this determines its form, which ranges from the open to the closed. For instance, an open network might simply disseminate information. An example here would be the Active Living Network, which requires little if anything from recipients and where connections between the parts are minimal. By contrast, the London Voluntary Service Council or an inter-city EU network on best practice in public-private partnership would be more closed and should involve real engagement of participants, mutual site visits and the writing up of projects. When such networks are well run, those involved might become friends and unpredictable, often positive, spin-offs occur.

For this networking to benefit a city, other dimensions come into play beyond well-communicating individuals, groups and organizations. These include not only involving firms in industry initiatives, but also promoting an area to its citizens and the outside world, creating a sense of engagement through more consultative-based planning approaches, or marketing and events strategies to enhance a sense of belonging and identity. For instance, the Northern Quarter in Manchester has a special development vision which seeks to maintain its attractiveness to the alternative types who made it popular in the first place, given the pressures of gentri-fication. Another example is Glasgow's Merchant City initiative. Since 2002 this has included a Merchant City festival, tied in with the European car-free day, as part of a wider marketing campaign to raise the area's profile as the hub of Glasgow's creative economy.

The words 'networks' and 'networking' have already become a mantra, imbued largely with positive connotations as we perceive networking to be about connecting in an open way. Yet networks can have a flip side if they are too tight, closed in or self-referential, only benefiting those who are part of the group. This reduces creative capacity. This is a point that comes through in assessments of Japanese and Chinese creative potential19 and may emerge more strongly as intercultural creativities which require connections across cultural axes and networks become more relevant.

A battle is raging within the inward-investment community about the relative weightings of soft or hard infrastructure. The developing consensus emerging is that both hard and soft now provide the base conditions for inward investment, whereas before only hard factors counted. Richard Florida's work on the rise of the creative class and the urban settings that encourage creativity has given new credibility to soft infrastructure arguments.20 An indication of the shift is that more research is currently under way on soft factors. In the traditional list of 11 inward investment factors, most 'soft' issues are subsumed under 'quality of life', a relatively low-scoring factor. The eleven are: economic profile, market prospects, taxes, regulatory framework, labour climate, suppliers and know-how, utilities, incentives, quality of life, logistics and sites. Yet there is growing coverage in the local economic development and business location communities about the increasing importance of quality-of-life factors in attracting and retaining inward investment. A major review of 30 separate studies of factors which influence local economic development again identified 11 factors which were cited on a regular basis:

1 location;

2 physical characteristics;

3 infrastructure;

4 human resources;

5 finance and capital;

6 knowledge and technology;

7 industrial structure;

8 quality of life;

9 institutional capacity;

10 business culture; and

11 community identity and image.21

It is notable that the factor cited most consistently (in 25 out of the 30) was quality of life, closely followed by human resources and infrastructure. But while it was most frequently mentioned, its weighting was lower.

Our own review of the influence of culture and creativity on the location decision-making of inward investors revealed that:22

• 'Soft' infrastructure considerations, such as quality of life or culture, are growing in significance.

• Culture is a 'soft' location factor, yet 'hard', cost-related factors still dominate the location decision process - even in today's knowledge economy.

• 'Soft' considerations are more important for particular types of inward investment projects, where the attraction and retention of high-skilled people is important.

• The 'soft' considerations are not the central driver in location selection per se. Except, and this is crucial, when the project is a creative industries or new economy project, when it affects the decision after the 'hard' factors have been addressed.

• In a tie-breaker situation where there is little to choose between several locations, 'soft' considerations become a 'must-have' factor for locations aiming to attract and retain highly skilled personnel (when quality of life/quality of place is an issue).

• With the emphasis on 'hard' facts in the current environment, it is unlikely that a decision-maker is ever going to admit to being influenced by 'soft' factors such as culture, as they cannot quantify this to other decision-makers and stakeholders.

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