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HomeBlogMedellin’s transformation part 1 - economic growth and innovation

Medellin’s Transformation Part 1 - Economic Growth and Innovation


Mar 04, 2019

Medellin’s Transformation Part 1 - Economic Growth and Innovation

Medellin’s development is often referred to as an urban miracle; the former world's most dangerous city is in the midst of a transformation that has earned it the title of the world's innovative city of the year in 2012 (by Wall Street Journal) or 2016 the “World City Prize”. IMPULSE Travel presents a three-part series, published in a monthly cycle, which illuminates various aspects of the city’s transformation through the last years. In the first part, we take a closer look at the areas of the economy, technology and innovation.


Medellin by night



Economy
 

The economy of Medellin has been stuck for a long time, the unemployment rate was unusually high, a breeding ground for high juvenile delinquency, which the infamous drug distributors used to generate even more violence and crime. One of the most affected places was the Comuna 13 (read more about the development of this neighbourhood here). Although the unemployment rate and (youth) crime probably influenced each other, together they had a strong effect on the overall city’s economy. Another reason for the stucked economics: the remoteness of certain areas - it was hardly possible to reach the city centre within a reasonable period of time. 
The economy was boosted by a few catalytic projects, such as the extension of the public transport system or giving the suburban communities the possibility to distance oneself from the prevailing criminality. 



Modern libraries built in the middle of barrio Santo Domingo Savio - a gift from the Spanish government

As soon as the city center was more accessible through the Metro and Metrocables, the suburbs could also benefit from job opportunities. In addition, new jobs were created through the conversion or renovation of outdated buildings in, for example, congress centers. After a while Medellin started to host national and international events such as fashion weeks or business conventions. 

In addition to creating jobs with existing funds, the city government has created incentives, including the field of taxation, for national and foreign companies and start-ups to settle in the Aburrá-Valley. Due to this increased demand for business seats in Medellin, more construction projects were initiated, which in turn had a positive overall effect on the unemployment rate, because more labor force was needed. 

Another point, how the city could bring the people "under control": Instead of imprisoning certain criminals for a long time, which is very expensive, they reintegrate them into the social system through a programme which also includes school education, training courses and job search assistance. The money, which is not needed for prison maintenance, can be invested in innovation such as the construction of parks, public squares, into the innovation district Sevilla and others, which in turn increased the demand for construction projects.



Plaza de la luz - Once a place that housed dodgy characters, now a tourist attraction due to its light-flooded redesign.

Not only did the city create new jobs, it also has a programme for the development of existing micro-enterprises. Evening courses are offered in areas such as accounting or business administration and trainings are given on how to make small businesses more competitive, which in turn has a positive effect on the quality of the overall supply and creates new jobs as flourishing businesses expand.  

The economic development, the improvement of the tourism offerings and, to the disfavor of the city administration, the curiosity about the infamous drug lord (also influenced by the Netflix series Narcos) led to a real tourist boom, Medellin became a hip city with with an outstanding culinary offer (read about the Top 5 Restaurants in Medellin or check out our Gastronomic Wonder Tour in Medellin).
Besides, Medellin had always three strong main exporting products. These include the famous Antioquian coffee, textile goods and flowers. The latter led to the first Feria de las Flores, the flower festival of Medellin in 1957. 



A participant of the “Feria de Flores”

The city set itself an ambitious goal, it wants to be the best platform in Latin America for business development. This is to be achieved by strengthening the ecosystem of innovation over the standpoint of technology and science.

 

Technology & Innovation
 

The development of the city’s innovation sector is the local government worth a total of $389 millions whereby this amount will flow into this industry according to a plan over 10 years, until 2021. This led to the fact that several real estate projects have been transforming Medellín's Innovation District as part of the public policy created by the city's government. Fully equipped office spaces are offered to companies for around $60 per month, which includes flexible areas according to the to the company's needs.

Medellin has a fast-growing technology talent pool, whereby two of the top universities offering degrees in computer science, and more than 40 educational centers are providing IT training. 
The Ruta N is the Medellin's Centre of Business and Innovation, consisting three buildings and is a symbol of the city's technological development. The complex is located in the innovation district of Sevilla, and it measures almost 30000 square meters of working space shared by more than 120 companies, mainly from the tech, ICT and energy sectors. 



The Ruta N Complex - Medellins Lab of Innovation

The mission of this centre is to promote Medellin's economic evolution in the fields of innovation, technology and science in a sustainable way. The Ruta N is financed primarily by public funds and by income earned by the building itself, for example by the rental of business spaces. 

More than 60 percent of the companies in the innovation district come from abroad, the majority of the enterprises are specialized in the IT sector, other large areas are business consulting and social innovation.
The foreign companies are responsible for 3000 new qualified jobs within this district. According to forecasts, by 2021 their activity will provide 28,000 new assignments within the two square kilometres innovation district.
Medellin authorities officials announced that Colombia's second largest city aspires to be the principal technological innovation city of Latin America by 2021.