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How Did Florence Grow? 9 Lessons for New and Existing Cities

By Roger Weber

Headquarters of the Renaissance, Florence, Italy is one of the most important and misunderstood cities ever built. While it is best known for its artists, architects, musicians, and humanist culture, its greatest lessons for the development of other cities come in its pioneering approach to all of the other core elements of urban development: the value of its location, its slow evolution, how it cultivated wealth through trade, exports, and banking, how it structured its leadership, and how it pioneered the formalization of the city and the creation of the suburbs.

The story of Florence is one of the best encapsulations of the story of most of the great successful cities of the world, and thus offers an ideal case study of lessons learned for tracking the future potential for new and existing cities. Here are some of those lessons:

Catalyzing the City: Geography + Investment

The Geography of Inevitability: Florence, like so many cities, emerged on the scene because of two basic factors: advantageous geography for trade and a single entity that decided to call it home. Geographically, it’s no surprise that cities evolve in advantageous positions along waterways – such is the case in fact with most great cities that have ever existed – and as such, it’s no surprise that Florence eventually developed where it did. Florence for its entire history has benefitted from a strategic calmwater port location with ocean access. Because of that location, there had been minor settlements where Florence is located going back thousands of years. The Etruscans had located there as well as pre-Roman settlements in and around the city. In some sense, this ancient reality meant it was inevitable a city would eventually develop here, and if one hadn’t, those ancient traces would offer good reason to want to develop on there now. Generally, the collective wisdom of human history will tell us the answers to the future market potential for places. If there’s never been anything in a location before, success will be hard to materialize there out of thin air.

Invest for Success: Still, it took the affirmative decisions by the Romans to establish a camp there to make more than a fleeting settlement happen. After a few hundred years of minor encampments, the Romans forged the first major settlement here, creating a village in 59 BC for army veterans and, in doing so, investing pretty heavily in the place. Usually, it takes this kind of anchor to get a place off the ground. Even a small infusion of settlement can catalyze growth, so long as the first condition of an advantageous trade position is also in place. Once the Romans settled Florence and created a base population of a few thousand veterans, they bolstered the human foundation by building the basic infrastructure for a more permanent place, including bridges, a forum, spas, the Roman Theater of Florence, and a permanent village. They also fortified some roads in order to offer easy trade routes to the larger nearby marketplaces of Pisa and Rome. A few investments by the Romans was usually good enough to get most cities off the ground, and if made correctly a few similar investments can catalyze a modern city, where conditions are favorable.

Evolving the City: Patience and Formalization

Good Things Come to Those who Wait: The yearning with new cities is to want to achieve all of the scale and complexities of older cities without so much as the tacit acknowledgement that often complexity is not an inborne characteristic, but that which has evolved organically over centuries of complex factors. As a now 2,000-year old city, it’s no surprise that Florence has a more complex and internationally renowned cultural complexion than Phoenix, and that’s nothing against Phoenix. You just can’t fake 2,000 year of urban evolution. And the story of Florence’s urban assets includes awful lot of evolution. After all, the city existed for over a millennium before any of the arts, wealth, and culture for which it is so well known today became part of its organizational milieu. And even after 1,500 years, the city’s entire population was barely 50,000, a fraction of its current size and smaller than the current city of Ames, Iowa.

It’s important to underscore that there was no magic bullet to Florence’s development, and success was slow, herky-jerky, and never a sure thing. In fact, Florence’s fortunes oscillated for generations. It traded hands between kingdoms, grew, shrank, and survived decimation by the Plague, even after one of its first periods of substantial cultural expansion. After a revival of tremendous growth an artistic production in the 10th century, it once again faced internal strife by the 13th century. Political tumult dominated even its most prosperous periods, and in the 1400s the famous Duomo sat unfinished for over 50 years, with its main entrance not being finished for several hundred more.

Gradual Formalization: The massive cultural investments in cathedrals and the like that came to Florence in the 1400s were not intended to catalyze growth. Rather, they represented an attempt to formalize and beautify the utilitarian city. Like so many great cities in Europe, Florence did not shy away from efforts to improve and formalize its legacy frameworks. In the 1400s older churches gave way to the Duomo. And in the 1800s, the medieval houses were replaced by a more formal street plan and newer houses. Over time, a widened piazza, triumphal arch, and other new investments brought the city into the modern era. More than perhaps any other city, Florence was able to navigate the treacherous path between preserving legacy assets and moving the city forward.

Growing the City: Core Industries + A Place in the Global Economy

Industry First, not Art: The first 1,000+ years of Florence’s history had nothing to do with art, culture, or any of the things for which it is so well known today. Those became possible only once the city had long established itself as a diverse mercantilist and trade hub, which were again only possible because of the city’s strong water-fronting location and robust infrastructure. The Medici family made Florence into a banking hub on the back of Florence’s rich participation in the textile trades, its manufacturing, and the value of regional mineral deposits. Notably, there wasn’t one industry that benefitted from Florence’s geography, but several. Florence before the Renaissance wasn’t beautiful, but enough wealth moved through the city via trade and productive manufacturing and logistics that the Medicis were able to grow a worldwide banking empire from Florence at its hub. And it was only through this empire that they subsequently used the cash to grow the city, funding the invention of the piano and opera, building cathedrals, and funding the arts and sciences, including the work of Machiavelli, Michelangelo, Leonardo da Vinci, Galileo and Botticelli. Even these likely wouldn’t have happened without the huge collective sigh of relief within the city that only became possible after a shared crisis event – the Bubonic Plague. At any rate, Florence's foundations as a solid city of manufacturing and trade offer a critical lessons to cities constantly trying to grow themselves through out-competing other cities for key businesses: get your own ship in order and stop assuming everything among cities is a zero sum game. If you build a city of solid industries to start, competitive successes will follow.

Become a Hub of Something: As with so many features of Florence, its success highlights the importance of critical dualities in making a city successful. Florence found solid footing because it was home to a complex local manufacturing economy – the bare bones of what’s vital to urban success – but also because it squared this productive foundation with a larger role in a global economy. Florence’s “florin” currency introduced in 1252 gave Florence a stable monetary foundation, and also allowed the city to become a hub of financial activity that could be exported to other cities, to Florence’s financial benefit. This coin became the dominant trade coin of western Europe. A couple centuries later, the Medici family was able to fund not only mercantilist activity throughout the city, but also the nearby papacy. As such, they became the richest family in the world, created the largest bank in the world, and made Florence into arguably the richest city in the world. And it wasn’t by chance. Their innovations in banking were tremendous: they invented many of the core tenets of modern accounting, including the general ledger, double-entry bookkeeping, and boldly expanded the bounds of credit available to businesses. In building this banking empire, Florence found its footing not only as a robust economy in its own right, but as a destination economy for outsiders, with a ample jobs to keep its own society going but also a winning place in the competitive marketplace of cities.

Embrace a Generational Benefactor: If it isn’t obvious, it should be. The Medici family was critical to Florence’s development. Such benefactors that find a global niche in the marketplace don’t come along often, so it’s important for cities to find these forces and embrace their potential to propel change.

Leadership: Keep Your Head Down, and Empower the Mercantilists

Staying Under the Radar: While Florence’s location was advantageous, its location between larger political kingdoms left it a bit in the lurch. While this meant it got handed back and forth between warring nations for centuries, it also meant it was never the lone prize for any warring kingdom. It wasn’t the seat of the papacy, and thus never faced the sieges that Rome did. Its economy was generally steadier. One of the reasons Florence was able to grow as it did was that it stayed “under the radar”, generally always in control of its own governance and direction, with an economy that stayed true to the attributes that had kept it successful. In short, not being London, Paris, or New York isn’t a bad thing for a city’s growth prospects, so long as it has a solid economic value proposition in the world and a strong appeal to future residents.

Empower the mercantilists to work together: Florence’s politics were highly volatile, and it’s a misnomer that governmental stability is the one harbinger of success. But amid this volatility, Florence always kept its eye on the prize. For a city of artists, Florence was rarely if ever ruled by disconnected dreamers. And for a city of manufacturing, populism never dominated here either. Rather, one of Florence’s secret sauces was that during its most high-flying centuries it was governed not by an elected or aristocratic elite, but by a committee of its mercantilists, both leaders and those who were less senior. Keeping business interests, both leadership and on the labor side, in charge of the city in a collective and collaborative way meant the city had competent leadership with a vested stake in its financial success. It also allowed them to spend lavishly on civic projects and secure the buy-in of their largest companies. And because the committee leadership turned over so frequently, it kept fresh blood intermingled so that no one business interest dominated outside the Medici family.

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