Urban state venturism: Toward exciting research directions

Introduction

The most gratifying aspect about publishing our Dialogues paper on urban state venturism is the precious opportunity to discuss a critical question of our times with outstanding scholars: how far can urban regions go in successfully capturing and reproducing capital? Ilias Alami, Dan Cohen, Sabine Dörry, Emily Rosenman, Hyun Bang Shin, and Heather Whiteside present five commentaries that enliven and enrich our proposed research agenda on state-led venture capital (SVC) investments in urban regions (as outlined in the risks of urban-oriented developmentalism section in Su and Lim, 2025). Each commentary generously offers innovative and constructive feedback on the paper that refine and, in some instances, reframe our proposed research questions. Collectively, they illuminate the importance of investigating urban state venturism conjuncturally, a process of stress-testing theories across multiple cases and contexts that, following Peck (2024: 506), ‘inevitably exceed the work of individual projects and for that matter individual researchers, being instead the shared and distributed work of research programs, collaborations, debates, and disputes’. Building on specific suggestions from these commentaries, we will elaborate how this ‘shared and distributed work’ can proceed along three avenues.

First, multi-sited genealogies can sharpen the systemic-level conceptualization of urban state venturism. Because each urban region is shaped by specific historical-geographical conditions, identifying and comparing these conditions across multiple urban regions would reveal whether the rationale of SVC investments is generic or particular. Second, urban state venturism might be more accurately conceptualized as an expression of both state entrepreneurialism and state capitalism rather than as a variant of urban entrepreneurialism, a concept with relatively narrower parameters. Direct state participation in market activities is integral to urban state venturism, while urban entrepreneurialism primarily entails facilitative roles by state institutions to augment place attractiveness to potential investors. Further reflections on the state's role in urban state venturism are required to conceptualize how state entrepreneurialism and state capitalism evolve in and through urban regions. Third, risks must feature as a key research focal point on urban state venturism, but this focus is distinct from the ‘derisking’ attempts in some contexts where private investments are subsidized by state funds in the name of ‘development’. Urban state venturism, and state capitalism more broadly, is about direct and proactive risk-taking by state institutions that consequently generate direct socioeconomic impacts. Each avenue will now be addressed in turn.

Multi-sited genealogies

A key component of our article's conceptual framework is the dynamism of uneven and combined urban development (see Figure 1, Su and Lim, 2025). Ascertaining how urban state venturism contributes to this process entails a grasp of historical-geographical conditions of possibility – and, indeed, impossibility. From Whiteside's (2025) approach to ‘periodizing SVC’, Dörry's (2025) proposal to establish a ‘decidedly forensic, practices-centered methodology’, and Shin's (2025) call ‘to consider what Asian histories reveal about state-capital and state-society relations’, it is palpable that the uneven and combined effects of urban state venturism can only be understood through its specific historical-geographical contexts. How this can be done remains an open question, however.

Inspired by the commentaries, we believe that a historically oriented research design could be based on multi-sited genealogies. To follow Michel Foucault, genealogy is a critical excavation and re-presentation of history to address a specific contemporary problem. As Foucault puts it in a widely cited interview in 1984: ‘I set out from a problem expressed in the terms current today and I try to work out its genealogy. Genealogy means that I begin my analysis from a question posed in the present’ (Kritzman, 1988: 262). Crucially, this approach is not a search for a fixed origin that determines the present. As Garland (2014: 372) explains, genealogy ‘is to trace the erratic and discontinuous process whereby the past became the present: an often aleatory path of descent and emergence that suggests the contingency of the present and the openness of the future’. In the context of our article, a contemporary problem is clearly delineated: why are urban governments launching SVC investments as developmental tools? And as the historical analyses by Whiteside (2025) and Cohen and Rosenman (2025) indicate, different answers could emerge when this question is addressed genealogically from different vantage points.

Expanding on our reference to the role of the Business Development Bank of Canada (hereafter BDC) as an SVC investor, Whiteside (2025) foregrounds the BDC's origins and range of public roles that underpin the BDC's overarching developmental goal, namely ‘targeting neglected markets and aligning with government priorities’ (Whiteside, 2025: 3). Juxtaposing this contextualization is Cohen and Rosenman's (2025) examination of the Hudson's Bay Company's (HBC) raison d'être in Canada. Of particular interest here is the founding of HBC in London in 1670 and its receipt of a British Royal Charter to trade in the drainage basin of Hudson Bay. As Cohen and Rosenman (2025) argue, the HBC's operations cannot be explained in narrow economic terms: ‘the state's support of that firm not only generated profit but served the settler colonial project by dispossessing Indigenous peoples and furthering Britain's geopolitical goals’.

Both commentaries offer at least two distinct ways to assess the role of SVC investments. First, they raise the question why state institutions consider VC investments to be more apposite developmental tools. Second, they underscore the importance of non-economic goals in launching SVC investments. These goals could be ‘developmental’ in the economic sense, as the BDC's activities demonstrate, or more broadly a distinctive approach to colonization in the case of the HBC. Indeed, the HBC was granted a Royal Charter not long after the East India Company as part of the British state's global strategy of expanding geopolitical influence through private firms (for more on this strategy, see Lim, 2024). These conjuncturally focused assessments jointly offer an opportunity to critically engage with our definition of urban state venturism as a ‘transposition’ of state roles. Here, we concur with Whiteside (2025) that examining transposition ‘must be subject to empirical investigation’; we also agree that transposition can be expressed as evolution. Yet, insofar as transposition is not solely about moving from one role to another, but, more specifically, about bringing the state's existing developmental orientations-cum-practices from one domain to new domains, a genealogical analysis offers rich opportunities to theorize the state's role in the urbanization of capital.

In the BDC case, the key question is when does the BDC leadership decide that SVCs offer a ‘fit’ with its developmental goals. This question then expands into a range of related questions. Who are the actors setting the BDC's developmental goals? Are these goals national, provincial or urban in scope and scale? Are there similar risk identification and assessment capacities between commercial loans and SVC investments in different urban regions? What would the BDC do if it discovers it lacks sufficient capacities to launch VC investments – do they seek to emulate private VC firms by employing professionals with VC investment experience or send existing employees for training?

Similar questions could be posed to ascertain how the HBC's focus on facilitating geopolitical expansion was connected to their London-based investors’ willingness to finance activities that could generate fast growth (a key requirement of contemporary VC investments). How did the HBC ‘valorize’ its investments (similar to contemporary ‘exits’ by VC investors) and how were surpluses/profits shared with the British Crown? Dörry's (2025) call to examine the ‘asset logic’ in urban state venturism offers an important angle to address these questions: to what extent was the HBC's ‘venturism’ based primarily on securing ‘asset ownership’ (of both land and labor) in a way that would both legitimize (literally under a colonial legal framework) and enable a geographical expansion of capital accumulation? Insofar as VC financing ‘aims to create – and benefit from – diverse value formats (for investors) through assetization’ (Dörry, 2025), it would be fascinating to examine what ‘value formats’ were produced as the HBC expanded its investments and operations across Canada.

The ‘state’ in urban state venturism

A key question we grappled with as we wrote this article is the connection between urban state venturism and urban entrepreneurialism. To be sure, this question deserves a paper-length treatment on its own and we have provided, at best, indicative sketches of some possible answers. In this regard, Alami (2025) justifiably suggests ‘the analytical value of urban state venturism could be enhanced by fleshing out more systematically where it fits within shifting repertoires of urban entrepreneurialism’. Upon further reflection, we believe urban state venturism could be more accurately conceptualized as an expression of urban state developmentalism because this approach brings into focus a key component of urban state venturism – the state. The urban scale may be a major scale of capital accumulation, but its emergence and evolution through SVC investments is more accurately an expression of state spatial strategies. These strategies could be a function of state entrepreneurialism and state capitalism – our conceptual logic is that the state's ‘entrepreneurialism’ can be simultaneously expressed through its spatial strategies to create urban ‘spatial fixes’ for firms owned or invested by the state (see the multisited genealogies section, Su and Lim, 2025). Part of this process can influence and involve urban entrepreneurialism (as outlined in the new research questions in Table 3, Su and Lim, 2025), but its emergence and effects can only be understood when it is evaluated vis-à-vis state-level developmental objectives.

In this regard, we agree with Dörry's (2025) proposal to focus on the ‘broader policy shifts toward the modern “entrepreneurial state”’. Shin (2025) is also spot-on in his assessment that ‘it might be more intellectually beneficial to engage with the urbanization of state capital, a subset of which may include urban venture capital’. Considering how this urbanization of state capital is shaped by policy shifts within increasingly ‘entrepreneurial’ states would align with Shin's argument that the ‘rise of state venture capital should not be simply seen as the state becoming capital but as an extension of its influence into nonstate firms warranting further scrutiny’. This scrutiny would benefit immensely from the commentaries’ highly valuable suggestions.

‘When the state “becomes capital”’, Cohen and Rosenman (2025) propose, ‘we should ask which political relationships state investment is bolstering, and how those ostensibly economic projects are enabled and advanced by social and political relationships that produce contemporary uneven geographies’. This actor-focused approach is fundamental for examining what Alami (2025) terms ‘the transformations of national and municipal governments as they aim to develop and harness the fast-growth potential of tech-driven startups and entrepreneurial ecosystems’. Specifically, they spotlight the collaborations and conflicts between these governments as they identify these startups and ‘ecosystems’. A close examination of practices connecting different stakeholders also supports Dörry's (2025) suggestion to ‘disentangle the intricate relationship between state and finance, particularly in the context of the local statecraft's increasing involvement in financial instruments (e.g. special purpose vehicles) and financial markets, for example, to secure municipal infrastructure financing’. Collectively, establishing causal relations between actors enables a ‘detailed study of the active making of the imbricated state roles and facilitate the dissection and better comprehension of the various nuances in the changing modes of urban venturism’ (Dörry, 2025, emphasis in original).

The risks of urban-oriented developmentalism

A key feature of our research agenda is to examine the socioeconomic risks of urban state venturism. Here, risks are not simply construed as the limited liabilities of incorporated firms; they impact the provision of basic amenities and social safety nets in urban regions (and potentially beyond) if these firms incur losses. We are therefore excited by Alami's (2025) suggestion to consider how urban state venturism relates to Gabor and Sylla's (2023) concept of ‘de-risking developmentalism’. This concept reflects a particular type of state action within the context of neoliberal capitalism – one that reflects state institutions genuflecting to powerful corporate interests on the premise of social development. In this sense, the most impactful aspect of ‘de-risking developmentalism’ is its ability to critique this state action because providing subsidies is itself a risk-laden strategy.

Yet the concept of ‘de-risking developmentalism’ is premised on a distinction that our article seeks to blur – namely that of the state and capital as separate entities. As Gabor and Sylla (2023) show, ‘developmentalism’ is constituted by expending public money to subsidize private financiers (hence ‘derisking’ their operations), whereas urban state venturism refers to state institutions becoming financiers through expending public money in the form of SVC investments. As such, urban state venturism differs from Gabor and Sylla's (2023) observation that the state concedes structural power as they ‘de-risk’ developmentalism: states aim to retain, if not reinforce, structural power vis-à-vis private firms through SVC investments. This important difference requires further empirical examination: would increasing state structural power through urban state venturism generate more risks to the taxpaying public vis-à-vis the ‘de-risking’ of developmentalism?

Complicating answers to these questions is Dörry's (2025) previously discussed point on multiple value formats. What risks are generated by each distinct format that is financed through SVC investments in urban regions? How would these risks be calculated in aggregate terms? These two related questions become more interesting if/when state institutions simultaneously launch VC investments in different sectors (e.g. combining assetization with advanced manufacturing) to achieve the same developmental objectives. Ascertaining the scope and scale of these risks could generate new insights into the restructuring of state power through urban state venturism. This approach is not antithetical to Gabor and Sylla's (2023) ‘derisking developmentalism’ concept, to be sure; it sits alongside their concept in highlighting the central role of risk management in reproducing capital accumulation.

Our collective ambition

Economic development worldwide is increasingly predicated on a concentration of finance, labor, and logistical capacities in urban regions. Correspondingly, state-led capital investments have been primarily channeled into urban regions. Deepening existing understanding of urban state venturism therefore provides a major avenue to understand how state entrepreneurialism and state capitalism are operationalized in and through urban regions. If anything, our research agenda highlights the importance of examining the urban condition of state entrepreneurialism and state capitalism. All the commentaries in this exchange have presented suggestions that, in Dörry's (2025) term, would truly make our agenda more ‘ambitious’. We hope actualizing this agenda is very much a collective ambition – one that we look forward to achieving together.