Large economic gains are increasingly going to global cities and regions that are centers of innovation, such as San Francisco, Singapore, and London. This phenomenon is driven in part by the tendency of innovation-oriented jobs to disproportionately benefit local economies. One notable study, for example, estimated that each innovation worker spawns, on average, five new peripheral jobs.3 Young professionals are flocking to these global innovation centers in greater numbers, creating self-perpetuating ecosystems in which, according to another study, denser social networks improve the flow of information as well as labor productivity.4
Metropolitan city regions are, in fact, fast becoming the locus of global competition: worldwide, 300 metro areas, representing 10% of the global population, produce about 50% of the world's GDP.5 For the Greater Seattle and Vancouver areas, the ability to embrace this trend could profoundly impact outcomes across private and public sectors. For instance, the business leaders we interviewed in both cities reported struggling with a shortage of skilled workers and a scarcity of local capital. In addition, Seattle lacks the kind of formidable academic research network that has catalyzed innovation economies in places such as Silicon Valley and Boston. Vancouver, for its part, has fewer large corporate anchor innovators than its peers. The list of challenges goes on.
By working in alliance, though, Seattle and Vancouver could better address these challenges. Their individual strengths in a number of areas complement each other, and if developed jointly, these strengths could generate greater economic and social gains for both. Through unified action, the two cities could establish self-perpetuating innovation ecosystems able to compete on a global scale. The macroeconomic benefits from cluster growth could be even more substantial, as Michael Porter noted more than a decade ago. As clusters become larger, regional wages in all industries, and even in smaller businesses, grow with them.6
Capitalizing on their complementarities to achieve greater global prominence will, however, require deliberate, sustained action-not only in the way Seattle and Vancouver foster innovation but also in the way the two cities work together. Strengthening the connections between the two regions would be a good start and would begin to reduce the perceived distance. By "connections," we're referring to the gamut of interactions between the regions: partnerships between public- and private-sector entities, joint academic research, and even cross-border relationships among individuals. But stronger connections alone will not be enough.
Accelerating the development of a world-class innovation
corridor will take transformational efforts: transportation
initiatives to shrink the not insubstantial distance between the
two cities, immigration policies that enable people to travel
between the two cities more freely, and the commitment of capital
to invest in new ideas and new enterprises. It will also require an
emphasis on continuing education to promote career mobility and
ensure access to opportunity for all residents. (For more on the
importance of inclusive economic growth, see "Saving Globalization
and Technology from Themselves: Imperatives for Corporate Leaders,"
BCG Perspectives, August 2016.)