Why the new model for startups works well with urbanity

Payton Chung, in an insightful post called "The city itself acts as a platform for entrepreneurial ecosystems" writes:

A recent Economist report by Ludwig Siegele examines how the business model, and culture, of the new entrepreneurial culture radically differs from the Fordist, all-under-one-roof mode of production that immediately preceded it:

"[T]he world of startups today offers a preview of how large swathes of the economy will be organised tomorrow. The prevailing model will be platforms with small, innovative firms operating on top of them… In some ways, [entrepreneurial] ecosystems can be seen as exploded corporations. Finance departments have been replaced by venture-capital funds, legal ones by law firms, research by universities, communications by PR agencies, and so on. All are nodes in a loose-knit support network for startups that does what in-house product-development teams used to do."

This combinatorial approach to business is fundamentally well suited to dense urban fabric, which relies upon smaller increments of development — and thus intrinsically offers the choice and flexibility demanded by both contemporary consumers and the experimental businesses that serve them. In a sense, both the urban grid and the urban fabric are just platforms for business growth: an urban business district has higher costs — but compared to an insular suburban corporate campus, it’s an “exploded” ecosystem of firms that each do their own thing well, and thus maximize their own productivity. Instead of a single mediocre cafeteria, we demand — and increasingly get — more and better choices.

I don't know that combinatorial is a word, but I like where Payton is going here. He moves beyond the typical analysis of "young people like cities" to a more nuanced understanding of the forces behind today's changes. Well worth a read, and a look at the source report.