10 Core Ideas for Growing our Next Economy, Locally and Regionally
by Robert J. Leaver, V6: 2/18/11
“Something is happening here, what it is ain’t exactly clear”
At the end of each century, the myths, stories and structure that supported it go away. The past does not leave gently. Many forces holding the past try mightily to keep it in place. But what must come next is a new myth, a new story and new forms to shape the next century. And the next unfolding of our culture blends what is best brought forward from the past with what must be invented for the future.
Our next economy is unfolding in unpredictable ways. The practice of segregating, too often overlapping economic sectors is a dead idea. For example, declaring a separate knowledge economy won’t fly in the future. The future is about convergence.
1. External conditions are converging
Chris Martenson in his analysis-driven “Crash Course,” challenges us to speed-up our understanding of 3 converging external conditions: economy, environmental resources and energy that, as they converge to create complex impacts, will fundamentally alter our sense of the next economy. We can no longer examine each condition alone. Instead, examine them together – one gestalt with massive impacts.
And as we respond to converging conditions, we must put into the world "many experiments to find our way forward, because we don’t know what will stick.” “The next 20 years will be nothing like the past 20 years,” so let go of our old assumptions. We need fresh designs. “The way forward requires us to embrace, even stand in our predicaments knowing the fresh outcomes we require will not come quickly or easily.”
The way forward will be less about assumed economic growth and more about: less energy use; less use of natural resources and less economic growth or as Chris says, plan on “reliable economic shrinkage.” All 3 reductions in use are foreign to our psyche because they are less assumed growth than the past or take away and are not added growth. Thus, we have to learn to handle the creative tension between growth – an unsustainable construct – and conservation, especially the less use of everything.
2. The next economy is an economy of convergence
The next economy will integrate 4 historical economic elements, but blend and morph them in ways we are yet to fathom. The four elements: Grow food that is real and produced regionally…Make things…Yes, manufacturing is in the next economy game, albeit smaller and smarter…Serve people with grace…Create experiences that open our senses and souls.
There is not now, nor ever has there been, or will there ever be a separate…creative economy, knowledge economy, technology economy, or sustainable/green economy. The only economy there has ever been…ever will be…integrates the 4 core economic elements of food, things, service, or experience.
That said, going forward, our four economic building blocks require infusion of creativity…aesthetics…knowledge…technology…and sustainability/green…again in ways we can’t predict.
The i-Pod for listening to music exemplifies the presence of the confluence economy…it is made/manufactured… it is small, thus ecological…it is an experience…it is technology…it embeds knowledge. The i-Pod is not owned by an economic sector…and more and more of what we create will be about the unpredictable confluence of economic elements.
3. Make character and place central
The next economy will be first about a symbiotic relationship among four place-based elements. First, character of people…the desired character/culture of the place…Second, the ecology – don’t trash it. Third, unfold the economy that honors the ecology and evolves the character of the place. And fourth, build the built environment of creating buildings, sewers and so on that is in service to future character, ecology and economy. The four elements are a whole system in action.
The future economy will be less about new industrial parks and corporate office parks. It will be more about cultivating our cities and villages because they are “more naturally sustainable.” Further, the density of such places creates an entrepreneurial culture where ideas and talent circulate, combine, and eventually combust as the companies that will shape the next economy.
4. Think and act locally and regionally
Attend to the financial impact of the local economic multiplier. Money spent in the local economy has power. With each dollar spent at Starbucks, 38 cents circulates locally. Take that same dollar, spent locally at an independent coffee shop like Coffee Exchange on Wickenden Street in Providence, and it circulates locally 73 cents…or twice as much. Buy local does matter to the economy as long is it not a protectionist strategy.
Embrace our “funky” region in Southeastern NE: This region ranges from…Cape Cod with Martha’s Vineyard and Provincetown…roams along Route 6 through New Bedford and Fall River…travels through RI…then up to Worcester…then over to eastern CT…and finally up through the Pioneer Valley. This funky place is real because it is chock-full of people who are characters and places with character…and getting to any portion of it is under a 2-hour drive from Providence.
The next economy for Southern New England will be local and regional…we will trade goods and services across municipal and state lines…yes our economy will continue to cross formal municipal boundaries. Our regional economy will likely evolve in waves.
The likely first wave could include: Broadband access… this is well underway with more to come…go to OSHEAN.org/Beacon 2, where OSHEAN, using federal BTP resources matched with private money will invest 32 million dollars in broadband infrastructure for community anchor institutions such as libraries. Next in wave one is food production and transportation. For example, in Burlington, Vermont, the Intervale produces 8% of local food needs and has a huge composting business as well. Next are art and cultural experiences – currently, people travel across state lines to have these experiences.
The likely second wave of the next economy includes regional tourism…seeds of this are already present and the formation of renewable energy production operated by local cooperatives.
The likely third wave includes developing complex regional infrastructure like regional transit and the significant trading of goods across borders. And a real focus on public learning…separate state public college systems are not sustainable…UMass Dartmouth is closer to Providence than Kingston, RI.
(see my talk at the Bioneers workshop in 2010 for more ideas and references: Bioneers, 2010)
5. Entrepreneurs will create what is next
We have to rethink our typical approach to infrastructure: make water – we are going to need it…Most places have way too many cars; create new on-demand forms of transit such as bicycles, Pedi-cabs and so on. Make homes differently: As John Abrams of South Mountain Company tells us: “We have 25 years of energy re-work to do on existing buildings… 50% of our current buildings will still be with us in 25 years.” How to make more houses for more people in tighter spaces in cities and towns… the era of the single family house is coming to an end.
Community activists, artists, and immigrants will become small increment commercial developers in neighborhoods like restoring a three-decker house with a shop on the first floor and two living spaces above, and the owner occupies one floor.
6. Animate our sense of place
Emphasize the creation of place-defining, character building experiences in all neighborhoods through business: coffee houses, green grocers and boutique hotels. Create 21st century (non-public) education that turns kids into adults with minds and hearts that will create the next articulation of democracy.
Create many new access points for citizens to the real community news and stories from the streets.
7. Offer requisite “smart” goods and services
In the home-based micro lending area we need: caterers, house-cleaning cooperatives, and childcare cooperatives are essential for healthy neighborhoods, especially in depressed parts of cities. Develop urban gardening within 5-to-10 miles of a city or town…As noted earlier, in Burlington, Vermont, the Intervale produced in 2006, 8% of Burlington’s food and had a 1.2 million dollar composting business.
In business services, develop worker owned administrative and marketing cooperatives to organize all the independent professional contractors/creators and relieve them of the administrative work so they can concentrate on their craft. Wherever there is a group of individual professional service providers – those that file a 1099 (as self-employed) – there is an opportunity to build a business/marketing cooperative.
Pursue at-risk kids who get into trouble often but have entrepreneurial energies. Transform their energy and skill into useful capitalistic pursuits. Riverzedge Arts Project in Woonsocket is doing this now! Learn from them and borrow what works for your community.
Waste has value: Currently the Johnston RI landfill uses the compost it creates as cover for the landfill – a business opportunity looking for an entrepreneur…collecting/reusing/reselling all of the good stuff people leave on the sidewalks for the trash collector each week.
8. Do economic gardening
There are 3 strategies for growing an economy: one is outside-in by attracting businesses from elsewhere…most now acknowledge this as stealing and a zero sum game… 2 are inside-out strategies: grow what you got…start new companies. One inside-out strategy is “economic gardening”, a new, third approach to economic development – pioneered in Littleton, Colorado, in the early 90’s and now practiced in dozens of communities – focuses exclusively on growing local, high growth companies. Focus on high-growth potential companies defined as having at least $1 million annual revenue.
In 10 years, Littleton tripled its employment and increased the tax base 2.5 fold…and did do so without one dollar in tax incentive such as subsidies or tax breaks – historically, incentives and subsidies are common government practices for luring companies to leave one state to come to another.
For high growth companies, economic gardening mobilizes…without using any financial incentives: 1. Access to the market intelligence big companies get 2. Access to best practices for building 21st century companies 3. Connect growth companies so learning from each other fosters a culture of entrepreneurship to help companies rapidly grow to scale.
As an inside out strategy, in Southern New England, economic gardening could have two applications: Accelerating existing high growth companies and starting new entrepreneurial companies.
9. Cultivate the next generation of leaders
Many next generation leaders, not just "young" or 20 somethings, yearn to be more mobile and have flexible worktime/ playtime. They search for the place that speaks to them and want to leave the world better than they found it--and that is the difinition of "next generation" it is an ethos not just an age. These people are birthing social enterprises counter to the government grant/philanthropic mindset as the only means to solving social problems…this "next" generation is leading this charge. Consider the L3C – consciously low profit LLC that first holds a social purpose with profit motive second…pay taxes on it all…operational in 8 states and 2 tribes and not just in typically liberal states…Vermont is the pioneer. Or consider the B-Corp…no official IRS tax status like C and S Corps…You rate your business against standards and formally change your articles of incorporation to more broadly serve diverse stakeholders…Maryland and VT are the first states to recognize B-Corps.
Or factor in the full expression of independence such as self employment as a new path. In NYC, 1 in 4 people working files a 1099 with the IRS as self-employed. Now think of Providence as a comparable place with the same kind of stats where 1099’s are not counted in the workforce because the state of RI counts only those on a W-2.
Or that young people prefer to form temporary informal “companies” composed of a bunch of 1099’s…they see an opportunity, come together…get it done…disband….reform with new folks to pursue the next opportunity.
10. The next economy will be driven by different agents of change
Small business more than big corporations will shape the next economy. Entrepreneurs – commercial, social and civic – working at various scales and in diverse disciplines will be more front and center for at least the next decade. An entrepreneur launches a business without having all of the resources lined up at the start. Instead he or she mobilizes requisite resources as they go.
And immigrant entrepreneurs will be front and center in this entrepreneurial revolution.
(c) 2011, Robert J. Leaver, New Commons