The Harvard Business Review selected charter cities for its list of ten ideas that can make the world a better place. In the discussion of charter cities, Paul Romer compares newly chartered cities to corporate skunkworks.
A skunkworks is an autonomous corporate division where enterprising people can take a company’s business in a new direction. The discount retailer Target is a good example. Target started as a skunkworks within a department store retailer, Dayton-Hudson, and eventually remade the entire firm. Just as skunkworks can effectively transform change-averse companies, charter cities can take nations in a new direction toward sustained growth and development.
Groups of people always find it difficult to change the rules, even when other rules would clearly be better. Charter cities—dozens of them, perhaps even hundreds—could be the skunkworks that bring systemic change to entire nations. Ultimately, they could give the billions of people who will soon move to cities the chance to experiment with, and opt into, rules that let them achieve their full potential.