For Memphians contributing to our city’s rich and evolving culture, Mayor A C Wharton’s July 15th Viewpoint column in the Flyer sparks new hope for their role in making Memphis a city of choice. The Mayor’s voice was heard again in his Commercial Appeal guest column on July 29th calling for “investments that expand our economy.” These are the right words forward for Memphis and conveniently we can act on both fronts with the same action.
Memphis can both invest in creativity and expand our economy if we discard the script other cities are using for cultural investment and economic development. Our focus should be incentives that prepare Memphis for the business climate in 2020, not 2010.
Mayor Wharton’s focus on creative industries is the best start yet. These industries such as new media, design, innovation, and the arts are becoming increasingly important components of modern knowledge-based economies. They account for higher than average growth and job creation. Furthermore, these industries are also vehicles of civic identity that play an important role in revitalizing neighborhoods and fostering cultural diversity. For this new economy, we’ll need new, smart incentives.
For example, ‘old thinking’ on incentives would set the focus on enticing big films to be made in our city. This is good PR, but unfortunately bad public policy as every other city and state chases the same projects in a struggling industry. Instead of chasing down big film projects, Memphis could differentiate and focus on digital and new media productions with novel distribution models. This new market represents a little addressed opportunity by cities and states. Investing here sets Memphis on a path for uncovering new business models that have yet to be determined in an emerging sector. Simultaneously, these digital content pioneers will be featuring Memphis as the backdrop for their projects, giving the entire world viewing the content over the internet their first taste of our fine city.
Of course, this is just one example of smartening our incentives toward the future. The real point is that every city has the opportunity to recruit and transform existing talent into creative ventures that provide lasting social, business, and cultural returns. In Memphis it should be abundantly clear that returns from creative ventures are lasting. Music ventures of the past helped elevate our city economically over a period of decades and made our city renowned across the world.
Most cities have their incentives focused on moving jobs or saving jobs. Smart incentives should be focused on enabling current and future citizens to create their own creative industry job in film, music, visual art, or innovative startup.
Why is entrepreneurship in creative industry the smart way forward?
1) Since 1977, without startup companies, net job creation for the American economy would be negative in all but a handful of years. This means we would have lost more jobs than we created over the past 30+ years, if it were not for new business starts.
2) Entrepreneurship utilizes the human capital that is already present in our city or talented individuals that choose our city as their future home. Recruiting creative entrepreneurs to our city is a smart use of incentives.
3) These entrepreneurs would, on average, create 4 additional jobs in each of the next 5 years as their business expands. This is the engine for job creation.
4) Beyond the economic impact, the social and cultural impact for the city would be profound solidifying Memphis as the South’s Creative Capital for a century.
With this in mind, it is my belief that a good portion of our incentives should be focused on those who willing to bet on Memphis and their own creative ideas. Why not start a city creative capital venturing fund? It is virtually unheard of in other cities who continue to turn to stale incentive models of the past.
Applying these lessons to our previous example, Memphis could be the first city to chase down new media and totally digital video projects with smart incentives. It sits at the intersection of industry change, creative talent, and business innovation. By selecting the digitally distributed film and the new media frontier, a growing market opportunity, we can support the transformation our creative talent into sustainable creative businesses that are the future of industry.
Smart incentives could be set up for our talent to lead in many realms from music to bioscience to green solutions to supply chain technology. Let us bet on the individuals in our city who bet on themselves, bet on their creative ideas, and bet on Memphis. It is a smart bet.
Eric Mathews is co-founder of both LaunchMemphis (501c3) and Mercury Technology Labs which support entrepreneurial action in Memphis and the Mid-South.