At the end of the 1970s, the city of Bilbao and the entire Basque Country was emerging from forty years of dictatorship in which any expression of local culture had been repressed. The area was experiencing an industrial collapse that generated high unemployment and an international image directly associated with terrorist violence. Despite these circumstances, Bilbao and the Basque society managed to transform its economy and industrial base. It now leads international rankings in advanced manufacturing, education and healthcare, and has also generated a balanced distribution of wealth.

The Basque case presents a unique case of systemic transformation under extreme circumstances. This experience involves the “Bilbao Guggenheim Effect” , the Mondragon Cooperative and social economy ecosystem, Michael Porter ́s cluster strategy, the local advanced manufacturing and technology alliances , a basic income policy, the recovery of the Basque language , and the highest concentration of Michelin Guide awarded restaurants per square meter, among many other interconnected initiatives. While the tax system is similar to the European average, the Basque Country has enjoyed high income equality rates for decades. This data allows us to think that it is possible to complement the necessary distribution of wealth through taxes with the generation of wealth in a distributed manner. A more egalitarian salary policy and strong solidarity mechanisms help to provide real and large scale “pre-distribution” of wealth.

Compared to similar post-industrial situations, the key factor of this transformation seems to be associated with the cultural dimension of a long- term strategy, rather than with the more visible hardware that can be identified in the above mentioned initiatives. The software, or cultural component of the innovation process, can be therefore interpreted as the set of values and beliefs shared by a particular community, city or territory and the way they are expressed in collective narratives and behaviors, ultimately conditioning strategic decisions and their implementation. A systemic approach to the great challenges that urban settings aim to tackle requires a strong connection between both, operating in a similar way to social movements instead of continuing to apply the traditional top-down project management approach.

This story also suggests that those cities and territories who have been able to associate themselves with transformative values like equality, solidarity, self- responsibility, radical democracy, and resilience can become socially sustainable and more competitive.

Urban communities and 21st century citizens are demanding practical solutions to their growing, complex needs but if given the opportunity, joining a “city transformation movement” allows them to be part of a much more ambitious and mindful enterprise. These new transformational movements can only be co- created by generating a new narrative of transformation capable of connecting the identity of the territory with a “collective decision” to build a socially sustainable city that its residents are proud to be associated with, and proud to be living in.

Systemic change only comes about when the entire community feels empowered to act in a different manner. These narratives of collective change can be found in the Basque case, but also in other places that have undergone very positive urban transformations like Medellin, Montreal, or Seoul. Instead of looking for rare ‘talent’ in exceptional individuals, the most advanced forms of urban transformation set out to empower an entire community so that everyone can act in an innovative way.