Midsize City: Scale Up Manizales (Manizales Más) in Colombia

successful cases is that they are entrepreneurial explorations, experiments, and discoveries that undertake considerable risks and create public benefits through the learning that takes place, which markets will not adequately facilitate. The incentives provided by the government are neither aimed at supporting the whole sector nor one single firm but at the learning and the growth of a new activity. This focus achieves two things: it (indirectly) improves the general performance of the sector, while building capabilities to succeed in new fields. A similar approach informs Manizales Más, a regional program to strengthen the entrepreneurial and innovation system in Caldas, Colombia (see box 8.3). Again, the goal is not to support a particular product but to strengthen entrepreneurship and technological capability and to redress market failures, such as in finance.

BOX 8.3 Strengthening a Regional Entrepreneurial and Innovation System for a Midsize City: Scale Up Manizales (Manizales Más) in Colombia

In 2013, the municipality of Manizales in the department of Caldas in central Colombia embarked on a program named Scale Up Manizales (Manizales Más) to strengthen its entrepreneurial and innovation system, partnering with two US universities in the Boston area—Babson College and the Massachusetts Institute of Technology (MIT)—and local institutions. Manizales’s status as a medium-size city (population 434,000) is an important part of the story because even in 2050, megacities will still number just a few dozen, while thousands of midsize cities (with 500,000 to 5 million people) will house 92 percent of the world’s urban dwellers (Isenberg and Onyemah 2017). Similar programs—Scale Up Milwaukee (United States), Scale Up Rio (Brazil), and Scale Up Vaud (Switzerland)—have followed.

Though Manizales passed through a period when dynamism slowed, it has a solid enabling environment. Located at the north of an excellent highway linking the prosperous cities along the coffee axis (Eje Cafetero) and with decent connections abroad, it has a long tradition of coffee entrepreneurship; a solid industrial base anchored in Luker Agricola, a major agro-export processer whose foundation supported the program; and a large number of universities. It has among the highest Doing Business indicators in Colombia—so starting and growing businesses is relatively easy.

Scale Up Manizales tackled several dimensions to improve the local entrepreneurial and innovation system. It worked to strengthen university preparation of entrepreneurs; attempted to shift cultural norms to support entrepreneurship; developed an accelerator program to boost growth in existing businesses, including initiating exports; and offered business ecosystem training for local leaders in all levels of government, universities, and financial institutions. It also introduced Start Up Más to help students formulate business ideas; AddVenture-Más to accelerate start-ups with product concepts; and Scalerator programs to stimulate rapid growth within established ventures. It initiated a Finance Innovation Task Force to develop innovative debt-equity financial instruments, developed a platform with the MIT Venture Mentoring Service

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BOX 8.3 Strengthening a Regional Entrepreneurial and Innovation System for a Midsize City: Scale Up Manizales (Manizales Más) in Colombia (continued)

to mentor fledgling entrepreneurs, and identified high-potential firms and nurtured them. Though Scale Up Manizales has multiple subprograms, coordination across institutions is generally good, partly because it is a bottom-up program that was initiated by the tight-knit business community, and partly because of the small number of players and a strong communications campaign. Also important was the involvement not only of Luker as an anchor firm, but also contracting with Babson College and MIT to provide coordination assistance, assuring all parties of the seriousness of the overall endeavor.

While not yet formally evaluated, Scale Up Manizales has injected new dynamism into the medium-sized city, and has received international recognition. It has been written up in the Harvard Business Review (Isenberg and Onyemah 2017). In 2018, Babson College recognized it as the best ecosystem using its methodology, and the experience has been presented internationally. Michael Porter’s Social Progress Index in 2016 specifically highlighted opportunity in Manizales as significantly higher than in the megacities of Medellín and Bogotá. Whereas previously Manizales’s best talent migrated to those other cities, firms are now considering locating in Manizales. As one university student put it, “Manizales Más has opened our city to the world.”

Sources: Interview with Paula Andrea Toro, Secretary of Development, Employment and Innovation, department of Caldas, and author visits to Colombia; Isenberg and Onyemah 2017; Babson College, https://blogs.babson.edu/news/2017/10/04 /manizales-mas-celebrates-five-years-of-fostering-growth-employment-and-prosperity-among-the-local-entrepreneurial -ecosystem/.

Finally, annex 8B details how New York moved into second place in innovation ecosystems in the United States by focusing not only on the specifically high-tech aspects of the ecosystem, but also the more mundane but equally vital issues of maintaining amenities, low-enough rents, and continued skills accumulation.

Nonetheless, as Gruber and Johnson (2019) note, for nearly 50 years, much of America’s growth has been concentrated in a handful of large and already prosperous coastal cities such as New York, widening the nation’s economic and cultural divides. “Superstar cities” are also among the most expensive places to live in the United States, and many parts of the country feel left behind, especially in light of technological changes and job losses due to automation. To this end, Gruber and Johnson (2019) propose a suggestive exercise to measure the relative potential for various places to develop as technology hubs. Using data on 382 metropolitan statistical areas, they rank the 102 potential technology hubs in the United States by a broad set of necessary complements, including concentration of educated young people, inexpensive housing, short commutes, low crime rates, and strong university science and engineering education. They believe that these 102 places could potentially be viable technological hubs.4