Yesterday’s post began the discussion of where a better-than-average Supply Management organization on the path to becoming a world-class Supply Management organization should locate its new Centre of Excellence (COE) for its new centre-led Supply Management organization. We discussed the traditional factors of customer proximity, supplier proximity, business incentives, infrastructure, and the local talent pool and ended up demonstrating that the only thing that really matters is the local talent pool. This is because it is the people, not the process or the technology, that ultimately identify and drive the results, and without good people, the best process and technology in the world won’t take your organization where you want it to go.

So this brings us to the next logical question — where are the people you need to power your Supply Management Centre of Excellence? To try to answer this question, we’ll turn to the work of Richard Florida, as chronicled in Who’s Your City, who attempted to put together a book that would help people decide where they should live. And since you have to go where your talent is, wherever your talent is [going is] where you should be.

The first thing one has to realize is, despite claims that the world is flat and that talent is evenly distributed, today’s key economic factors — talent, innovation, and creativity — are not distributed evenly across the global economy. They concentrate in specific locations. It’s obvious how major new innovations in communications and transportation allow economic activity to spread out all over the world. What’s less obvious is the incredible power of what Richard calls the clustering force. In today’s creative economy, the real source of economic growth comes form the clustering and concentration of talented and productive people. New ideas are generated and our productivity increases when talented individuals locate close to one another in cities and regions.

Despite the recent flat-world hypothesis put forward by Thomas Friedman, we still see the explosive growth of cities and urban areas worldwide. More and more people are clustering in urban areas — and there’s no evidence to suggest that they’ll be stopping anytime soon. In 200 years, the number of people living in cities has increased from 3% to over 50%, and the urban population is still rising. So, as you already knew, you definitely want to be in a major urban area, but the question is, which one?

A key requirement is talent, but what kind of talent? Supply Management requires a special kind of talented individual who harbours a wide range of hard and soft skills, that complement her high IQ and EQ, who works well with people across cultures, and who has the creative insight to find opportunities others miss. This eliminates your average city from the equation. Furthermore, your average city will not have the creativeness, innovation, or economic activity required to continue to attract top talent.

Which city will? In our next post we will discuss the requirements for such a city.