The next economy knows no boundaries. You will read this again and again in the excerpts below from 7 of my favorite papers on the power of regions. Of the folks quoted, Jane Jacobs is the earliest thinker about regional economies – early 80’s. The links to the full papers are provided. There will be a cost for downloading “Mastering the Metro” paper; others are free.

Regional economies will be vital for growing food, creating manufacturing supply chains, producing and distributing renewable energy, sharing tourists as well as many other economic elements.

From "The New, New Urbanism,"
http://helmofthepublicrealm.com/2013/01/27/the-new-new-urbanism/

Perhaps Peter Calthorpe and William Fulton’s Regionalism is the next step for New Urbanism. To wit, if New Urbanism is the mixed-use philosophy for planning singular district economies, regionalism is the planning philosophy for tying together many districts within a metropolitan region. Rather than master plan a few large districts typically in central cities that may meet a perceived market demand, entire metropolitan regions contain many more small cities, townships and commercial districts needing more small-scale infill development projects to complement the glaring lack of mixed-uses that produces an intractable amount of cross-county commuting…It can be said there are 5 scales of economy, small to large: local, regional, state, national and global. A bell curve depicts “regional” economies at the top of the curve as most efficient. A backyard local economy is too small to serve a large population and the further we travel and transport goods to construct state, national and global economies, the more waste incurs.

From "The Regional City" by Peter Calthorpe and William Fulton, as featured in "The Interactive Megalopolis and The Regional City: Embracing Regionalism"
http://www.magplane.com/html/pdf/mar12.pdf

…Whether national or local, these "economies" might be important to the politicians who preside over them, but it has become increasingly clear that they don't really exist. Economic activity does not come to a halt when it reaches a jurisdictional line, whether the jurisdiction is a local, state, or national government. Political boundaries are artificial—and they don't reflect the way the global economy operates.

The global economy operates best at the regional scale for two reasons. First, much to everyone's surprise, despite our advances in telecommunications technology, proximity still matters a great deal. And, second, because of the decentralized nature of the economy, networking among a large number of highly specialized people and businesses matters more than ever.

From "The Economy of Regions" By Jane Jacobs
http://neweconomicsinstitute.org/publications/lectures/jacobs/jane/the-economy-of-regions

…Five different kinds of forces from distant cities [in the region] jerked [the small French town of] Bardou about, although never all at the same time. Those forces were the power of city markets, the power of city jobs, the power of city technology, the power of city work transplanted out of cities, and the power of city capital. These are the five forces that shape and reshape all regional economies, except those for which cities have no use, as happened in Bardou when it was a place of subsistence life only. These five great forces arise within cities, primarily as a consequence of city import- replacing, a process that shifts and enlarges city markets, rapidly increases city jobs, spurs development and use of rural labor-saving technology, multiplies and diversifies city enterprises, and generates capital—all simultaneously. Because these five forces are consequences of one and the same process, are in fact different facets of the process, within a city they are inextricably intertwined.

Such city regions are different from all other regions, having the richest, densest, and most intricate economies to be found, except for those of cities themselves. City regions are not defined by natural boundaries, because they are wholly the artifacts of the cities at their nuclei. The boundaries move outward or halt, only as city economic energy dictates.

From "Mysteries of the Region: Knowledge Dyamics In Silicon Valley," by John Seely Brown
http://www.johnseelybrown.com/mystery.html

...Networks of practice are made up of people that engage in the same or very similar practice, but unlike a community of practice, these people don’t necessarily work together…Consequently, its members share a great deal of insight and implicit understanding. And in these conditions, new ideas can circulate…on the back of similar practice (people doing similar things but independently) and indirect communications (professional newsletters, listservs, journals, or conferences, for example).

...In all, it seems more useful to switch, as others have, to an ecological metaphor for the region. Seeing the region as an ecology that plays home to multiple species but whose growth is ultimately a collective process does much more justice both to Marshall’s insight and the richness of regions like Silicon Valley. For the ecological view provides a systemic perspective. What is good for the ecosystem as a whole is not necessarily good for individual species or firms. Indeed, some of these may have to die for the region as a whole to survive. (Deaths in Silicon Valley get much less attention than births... Conversely, protecting individual species, as many working to build a region try to do, may be counterproductive.

...From the ecological perspective, the means of communication are only a small part of the overall complexity of the knowledge dynamics of the region. Ecological robustness is built—mysteries are put in the air—through shared practice, face-to-face contacts, reciprocity, and swift trust, all generated within networks of practice and communities of practice. New communications technologies can certainly reinforce these. It is more doubtful that they can readily replace them.

From "Mastering the Metro," by Bruce Katz and Jennifer Bradley
http://nextcity.org/forefront/view/mastering-the-metro

…When you look at global economic performance you’ll see that the top 30 metro performers today are almost exclusively located in Asia and Latin America. The 30 worst metro performers are nearly all located in Europe, the United States and earthquake-ravaged Japan. In 2009, Brazil, India and China (the BICs) accounted for about a fifth of global GDP, surpassing the U.S. for the first time. By 2015, the BIC share will grow to more than 25 percent. These nations are growing because they are urbanizing and industrializing. The locus of economic power in the world is shifting. How will communities in the United States compete — not just for rankings, but for the jobs, people and resources that make them good places to live?

…The Great Recession was a wake-up call to American metro leadership. At its onset, many U.S. cities and metropolitan areas found themselves engaged in low-road economic growth, pursuing mall developers and condo builders, as if housing and retail were drivers of the economy rather than derivative of the sectors that truly generate wealth: Manufacturing, innovation and the tradeable export industries.

This consumption economy was mostly zero-sum. A dollar spent (and taxed) or a house built (and taxed), or a business located (and taxed) in one jurisdiction was lost to any other. So, in metropolis after metropolis, jurisdictions competed against each other for sources of tax revenue — usually commercial development and big employers — wasting scarce dollars on enticing businesses to move literally a few miles across artificial political borders. The result: Metros prioritized short-term speculation over long-term growth and sustainable development. They did this until the bubble popped.

The post-recession period presents a historic opportunity to change how we measure growth and prosperity in metropolitan America and, by doing so, how we alter the trajectory of that growth. By measuring and gaining a more thorough understanding of their most important economic assets — through an analysis of export orientation, migration patterns, industry clusters, innovative capacity and human capital — metros will be better able to build on their strengths and compete in the global economy.

From "How to Make a Region Innovative," by Ernest J. Wilson III
http://www.strategy-business.com/article/12103?gko=ee74a

...[Individual innovations], no matter how appealing, don’t make a difference unless they can add up to sustainable serial innovation. To generate one groundbreaking technological development after another, innovation must be embedded within long-lived social institutions and networks. Four different sectors must be linked together: government, business, civil society, and academia. This is what I call “the quad.” In such an environment, creativity needn’t wait for the unpredictable “aha” moment. It is continually nurtured. The decisions made at every level — investment funds, corporate engineering teams, regional planning boards, philanthropic councils, academic faculty reviews, and many more — are naturally aligned.

...To bring these four sectors together, a quad cluster needs to nourish a high level of mutual trust.

From "Local Knowledge: Innovation in the Networked Age," by John Seely Brown and Paul Duguid
http://www.johnseelybrown.com/LocalKnowledge(6_02).pdf

...So, unlike digital information, the sort of knowledge that has fuelled growth and wealth in the modern economy neither spreads nor scales very easily at its most productive stage. Consequently, innovative knowledge and knowledge-based growth, like industrial growth, still cluster.

...innovation still has geography. And that geography still has consequences.

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The next economy knows no boundaries. You will read this again and again in the excerpts below from 7 of my favorite papers on the power of regions. Of the folks quoted, Jane Jacobs is the earliest thinker about regional economies – early 80’s. The links to the full papers are provided. There will be a cost for downloading “Mastering the Metro” paper; others are free.

Regional economies will be vital for growing food, creating manufacturing supply chains, producing and distributing renewable energy, sharing tourists as well as many other economic elements.

From "The New, New Urbanism,"
http://helmofthepublicrealm.com/2013/01/27/the-new-new-urbanism/

Perhaps Peter Calthorpe and William Fulton’s Regionalism is the next step for New Urbanism. To wit, if New Urbanism is the mixed-use philosophy for planning singular district economies, regionalism is the planning philosophy for tying together many districts within a metropolitan region. Rather than master plan a few large districts typically in central cities that may meet a perceived market demand, entire metropolitan regions contain many more small cities, townships and commercial districts needing more small-scale infill development projects to complement the glaring lack of mixed-uses that produces an intractable amount of cross-county commuting…It can be said there are 5 scales of economy, small to large: local, regional, state, national and global. A bell curve depicts “regional” economies at the top of the curve as most efficient. A backyard local economy is too small to serve a large population and the further we travel and transport goods to construct state, national and global economies, the more waste incurs.

From "The Regional City" by Peter Calthorpe and William Fulton, as featured in "The Interactive Megalopolis and The Regional City: Embracing Regionalism"
http://www.magplane.com/html/pdf/mar12.pdf

…Whether national or local, these "economies" might be important to the politicians who preside over them, but it has become increasingly clear that they don't really exist. Economic activity does not come to a halt when it reaches a jurisdictional line, whether the jurisdiction is a local, state, or national government. Political boundaries are artificial—and they don't reflect the way the global economy operates.

The global economy operates best at the regional scale for two reasons. First, much to everyone's surprise, despite our advances in telecommunications technology, proximity still matters a great deal. And, second, because of the decentralized nature of the economy, networking among a large number of highly specialized people and businesses matters more than ever.

From "The Economy of Regions" By Jane Jacobs
http://neweconomicsinstitute.org/publications/lectures/jacobs/jane/the-economy-of-regions

…Five different kinds of forces from distant cities [in the region] jerked [the small French town of] Bardou about, although never all at the same time. Those forces were the power of city markets, the power of city jobs, the power of city technology, the power of city work transplanted out of cities, and the power of city capital. These are the five forces that shape and reshape all regional economies, except those for which cities have no use, as happened in Bardou when it was a place of subsistence life only. These five great forces arise within cities, primarily as a consequence of city import- replacing, a process that shifts and enlarges city markets, rapidly increases city jobs, spurs development and use of rural labor-saving technology, multiplies and diversifies city enterprises, and generates capital—all simultaneously. Because these five forces are consequences of one and the same process, are in fact different facets of the process, within a city they are inextricably intertwined.

Such city regions are different from all other regions, having the richest, densest, and most intricate economies to be found, except for those of cities themselves. City regions are not defined by natural boundaries, because they are wholly the artifacts of the cities at their nuclei. The boundaries move outward or halt, only as city economic energy dictates.

From "Mysteries of the Region: Knowledge Dyamics In Silicon Valley," by John Seely Brown
http://www.johnseelybrown.com/mystery.html

...Networks of practice are made up of people that engage in the same or very similar practice, but unlike a community of practice, these people don’t necessarily work together…Consequently, its members share a great deal of insight and implicit understanding. And in these conditions, new ideas can circulate…on the back of similar practice (people doing similar things but independently) and indirect communications (professional newsletters, listservs, journals, or conferences, for example).

...In all, it seems more useful to switch, as others have, to an ecological metaphor for the region. Seeing the region as an ecology that plays home to multiple species but whose growth is ultimately a collective process does much more justice both to Marshall’s insight and the richness of regions like Silicon Valley. For the ecological view provides a systemic perspective. What is good for the ecosystem as a whole is not necessarily good for individual species or firms. Indeed, some of these may have to die for the region as a whole to survive. (Deaths in Silicon Valley get much less attention than births... Conversely, protecting individual species, as many working to build a region try to do, may be counterproductive.

...From the ecological perspective, the means of communication are only a small part of the overall complexity of the knowledge dynamics of the region. Ecological robustness is built—mysteries are put in the air—through shared practice, face-to-face contacts, reciprocity, and swift trust, all generated within networks of practice and communities of practice. New communications technologies can certainly reinforce these. It is more doubtful that they can readily replace them.

From "Mastering the Metro," by Bruce Katz and Jennifer Bradley
http://nextcity.org/forefront/view/mastering-the-metro

…When you look at global economic performance you’ll see that the top 30 metro performers today are almost exclusively located in Asia and Latin America. The 30 worst metro performers are nearly all located in Europe, the United States and earthquake-ravaged Japan. In 2009, Brazil, India and China (the BICs) accounted for about a fifth of global GDP, surpassing the U.S. for the first time. By 2015, the BIC share will grow to more than 25 percent. These nations are growing because they are urbanizing and industrializing. The locus of economic power in the world is shifting. How will communities in the United States compete — not just for rankings, but for the jobs, people and resources that make them good places to live?

…The Great Recession was a wake-up call to American metro leadership. At its onset, many U.S. cities and metropolitan areas found themselves engaged in low-road economic growth, pursuing mall developers and condo builders, as if housing and retail were drivers of the economy rather than derivative of the sectors that truly generate wealth: Manufacturing, innovation and the tradeable export industries.

This consumption economy was mostly zero-sum. A dollar spent (and taxed) or a house built (and taxed), or a business located (and taxed) in one jurisdiction was lost to any other. So, in metropolis after metropolis, jurisdictions competed against each other for sources of tax revenue — usually commercial development and big employers — wasting scarce dollars on enticing businesses to move literally a few miles across artificial political borders. The result: Metros prioritized short-term speculation over long-term growth and sustainable development. They did this until the bubble popped.

The post-recession period presents a historic opportunity to change how we measure growth and prosperity in metropolitan America and, by doing so, how we alter the trajectory of that growth. By measuring and gaining a more thorough understanding of their most important economic assets — through an analysis of export orientation, migration patterns, industry clusters, innovative capacity and human capital — metros will be better able to build on their strengths and compete in the global economy.

From "How to Make a Region Innovative," by Ernest J. Wilson III
http://www.strategy-business.com/article/12103?gko=ee74a

...[Individual innovations], no matter how appealing, don’t make a difference unless they can add up to sustainable serial innovation. To generate one groundbreaking technological development after another, innovation must be embedded within long-lived social institutions and networks. Four different sectors must be linked together: government, business, civil society, and academia. This is what I call “the quad.” In such an environment, creativity needn’t wait for the unpredictable “aha” moment. It is continually nurtured. The decisions made at every level — investment funds, corporate engineering teams, regional planning boards, philanthropic councils, academic faculty reviews, and many more — are naturally aligned.

...To bring these four sectors together, a quad cluster needs to nourish a high level of mutual trust.

From "Local Knowledge: Innovation in the Networked Age," by John Seely Brown and Paul Duguid
http://www.johnseelybrown.com/LocalKnowledge(6_02).pdf

...So, unlike digital information, the sort of knowledge that has fuelled growth and wealth in the modern economy neither spreads nor scales very easily at its most productive stage. Consequently, innovative knowledge and knowledge-based growth, like industrial growth, still cluster.

...innovation still has geography. And that geography still has consequences.

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1 out of 3 adults are not online:

Thirty percent, or roughly one in three American adults is not a broadband user. This reality holds true for RI. The population of RI (based on the 2010 census) is 1,052,567 of which 224,000 people are under 18 (those over 18 are counted as adults). This means 828,567 residents are adults. Thus, there are approximately 250,000 residents who are non-broadband adopters in Rhode Island. Non adopters are mostly: disabled, elderly, low income and those with English as a Second Language. We estimate that 70% of Rhode Islanders who are non-adopters live in urban areas, like our targets: Central Falls, East Providence, Newport, Pawtucket, Providence and Woonsocket.

Why should Rhode Island close the digital divide?

According to the FCC chairman Mr. Genachowski:

"Broadband is our central platform in the 21st century for economic growth, information, and opportunity. Broadband can be the great equalizer - giving every American with an Internet connection access to a world of new opportunities that might previously have been beyond their reach...Offline Americans are missing out on education opportunities, health care opportunities - and, yes - job opportunities. In today's world, you need broadband to find a job, apply for a job, and you need digital skills to keep most of today's jobs...This is why closing the broadband adoption and digital literacy skills gap is critical to the future of our economy. We can't have millions of Americans on the wrong side of the digital divide."

To close the digital divide requires a place-based approach:

Up to now, success in closing the digital divide in RI has been dependent on the strength of a network of volunteer community partners to build the ecosystem of instructors, training sites, and community outreach organizations. When the Digital Literacy program started, the focus was, for the most part, on recruiting separate people and organizations for each of the ecosystem roles. Recently, BBRI has found the most effective community partners are the ones that perform all four roles and focus on one place. For example, we have identified major nodes in our target areas of Central Falls and Pawtucket who are performing all of these roles such as housing authorities, libraries and comprehensive centers like the International Institute of RI. Now we want to build place-based ecosystems beginning with Central Falls and Pawtucket.

The Digital Literacy program has developed four community assets that can be used to help Central Falls and Pawtucket close the digital divide in these cities:

1 An online portal that houses resources for use by the community - the portal is "open access" and does not require a pass code

2 Framework and tools for delivering the basic classes including collateral promotional materials to recruit participants and qualifying assessments to use in qualifying outreach partners and training sites

3 Basic internet curriculum of 4 introductory modules

4 A one day Digital Literacy Instructors Workshop lead by a seasoned training team to train 8 instructors at a time

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Subscribe to Next Cities...to gain insights about the city as business incubator

This 4 year old electronic magazine is provoking us to embrace the fact that cities are the natural incubator, accelerator and laboratory for the next economy. For $1.49 per month, you will be exposed to next edge of thinking and practice about what is being done differently to make cities better. When you subscribe, each week you will receive a long practice-based essay and some related stories.

But in 2012, after 4 years of subscribing to Next Cities, I received an unexpected gift: "The Next City Disruption Index of people, places and ideas that changed cities in 2012," (here, paywalled). There are 77 innovative disruptions (including the turnaround in Central Falls, RI.)

The disruptions are organized in 4 buckets: innovations in both new commercial and civic entities and existing ones.

• Innovation in commerce such as crowd source funding for civic good in cites via Kick-Starter
• Innovation in new civic organizations such as the use of restorative justice in Chicago
• Innovation in established civic organizations such as university as accelerator of community building and economic development
• Innovation in established civic organizations such as Cleveland Ohio creating business cooperatives (owned by employees) in depressed neighborhoods

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Read the book, Steve Jobs by Walter Isaacson

In 2011, my dear friend Massimo Stark gave me this book for Christmas. I let it sit for a year (and I can't say why). At Christmas 2012 we were getting ready to visit Pittsburgh with my wife, Michelle (and son Diego) to spend time, with her sister, Gabriella and family. I decided to bring the book, Steve Jobs with me to spend a week in the Squirrel Hill neighborhood of Pittsburgh. On the car ride out, I read the first chapter...I was hooked. So each morning, I snuck downstairs, early, to curl up in a big comfy chair in the living room, and read this book. What an experience! The text is 571 pages, but once you start the book, you can't stop.

Isaacson is a master storyteller. This piece is not a book review by Leaver. My recommendation is read the book. Here are 4 vignettes to nudge you to read it:

Steve's leadership practice was to take a walk, with anyone he wanted to influence, about anything important about the future of Apple. These walks could last an hour plus. It was his Zen mind in practice. What would be different, if more leaders took walks with others to talk about what matters?

In building Apple, Jobs applied the design thinking of Edward Land, the creator of Polaroid, who declared in 1947, that in building their cameras as great products, that technology and the humanities must work together. The Apple products I use ooze with this human confluence of technology and art, which is why they are so popular. I sense the next economy will only pop when technology and art are symbiotic partners.

Steve Jobs was a binary guy. For him, it was always black or white, never grey. As an employee, you were either a rock star or a piece of dirt. In reviewing the prototype it was either right-on on or crap. This approach bruised a lot people, yet without this exacting design standard would Apple have created the products it did? As leaders, what is the line to hold between firm principles and caring for others? I am no clearer to the answer after reading this book.

For Jobs, meetings and conversations with people mattered. He hated PowerPoint and if you dared used it, you were shown the door. Instead Jobs used a rigorous face-to-face weekly meeting schedule to move Apple into the future. He held to this schedule even as he was dying. Why: because his heart and soul knew that human conversation was the only way to change the world. Leaders: get back to having more actual conversations with people.

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The rebirth of manufacturing in the US is everywhere. The recent issue of the Atlantic has a great piece. And Apple has announced it will start making some products in the US. 

Closer to home, Kevin Hively of Ninigrit partners in Providence, RI gave an earlier version of this presentation at the APA Southern New England conference in September, 2012 which I attended (PDF). The next evolution of manufacturing is about using high technology and embedding lots of knowledge in made things. And this "maker stuff" by young people is creating a stir.  

The manufacturing rebirth will be less about increasing the number of jobs. Rather, the rebirth will be about the added presence of more made, useful things in the US.

Measuring the health of the economy

 
The Sunday New York Times of 12-9-2012 had a conversation-stirring article on the lack of impact (jobs created and tax base increases) from using 80 billion a year in incentives for economic development.  On December 13, 2012, Richard Florida's Atlantic Cites daily post, included a clarifying article.  His team removed the sales tax exemptions and discounts from the 80 billion yearly investment and dropped the number to 51.4 billion.  But still concluded: ..."incentives still do not have any meaningful relationship to the economic performance of the states."  

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 We are in the next economy. It is not a new economy (as some economists call it) because we are building upon four economic cornerstones that already exist: growing food, making things, serving people, and creating experiences. The next economy is a convergence of these four cornerstones rooted in place - geography and local character - and space - "up there" using the internet.

The Next Economy web page at is a resource of ideas and practices that can help you unfold the next economy. The resource section of links and papers is organized in 7 groupings: Conditions; Character, Community & Place; Ecology; Economy; Entrepreneurship; Innovation and Regionalism.

I have a "watch" list of topics I am scanning to better understand what is going on in the economy. Here are some I am currently watching: 

1. 1. Regionalism – not the consolidation of government, but of trading commerce and developing infrastructure, e.g., building a regional renewable energy utility across state or municipal lines
   2. The rise of self-employment as a preferred way to work, especially among young people
   3. Cities driving the next economy
   4. The new, stretch role for universities as community builders and economic developers
   5. Young people preferring to live and work in cities and who are less inclined to own a house or a
   6. Entrepreneurs are the change makers of the economy...and the source of most of the job creation
   7. The rebirth of manufacturing in the US. This is not my father's manufacturing where he used mostly his hands. Rather, it is advanced manufacturing using more technology and fewer hands. Manufacturing is no longer about the jobsIt is about measuring productivity per worker, e.g. total revenue per employee. An interesting component of the comeback of manufacturing is the "maker movement" that combines the use of technology such as 3-D CAD and design to make cool stuff like robots.
   8. Measuring the health of our economy beyond the number of jobs and growth of the tax base
   9. New forms of organization driving the economy such as worker-owned business cooperatives, networks of capability distributed among several organizations and social enterprise

Over the coming months I will be blogging about some of these topics. You can also read more about the next economy in a paper I wrote called "Ten Core Ideas: The Next Economy of Place and Space." And as always, I would love to hear from you in general or with thoughts about one of the 6 items on my watch list. Click here and you can leave comments on the New Commons blog.

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I have been working with the Northeast Sustainable Energy Association (NESEA) off and on since 1993.  Yet, 5 years ago New Commons decided to go deep and get more involved with NESEA as a member organization and to lead into the 21st century with a new conference track called Whole Systems in Action.  Every year NESEA runs a Building Energy conference that brings together diverse disciplines of builders, developers, engineers, property management companies, and professional service providers all working in sustainable energy solutions and whole systems thinking.  The 2012  conference is March 6 - 8 at Boston Seaport World Trade Center. See more here

This year, I am the conference chair...a very intense and fabulous experience working with a cadre of over 100 NESEA members and staff to design an amazing, interactive and unique community learning experience!  The keynote speaker isn't--instead it is a "Keynote Experience" during the opening plenary with three NESEA members telling their story about what they are doing to create breakthroughs that "change the game" with sustainability.

On Tuesday night I will be leading the Community Forum, which is open to the public.  This is a highly interactive forum that asks deep questions about vision and practice for our communities around sustainable building and energy. We have some key questions about:

• What do you want to learn at BuildingEnergy 2012?
• How are you creating change?

We have 10 tracks this year, and our key interest is in Whole Systems in Action:  where we look at not only the built environment, but how it intersects with teams, communities, cities, villages and the ecosystem!

Here are the 10 tracks which offer something for every discipline:

Track 1: Renewable Energy
Track 2: Single Family Residential - New and Retrofit
Track 3: Boston Society of Architects - Residential Design
Track 4: Multi-family Buildings - New and Retrofit
Track 5: Commercial Buildings: Campus and Community
Track 6: Commercial Buildings: Health Care
Track 7: What the Pros Want to Know
Track 8: Green Financing  & Game Changers
Track 9 : High Performance Mechanicals & Renewable Heating
Track 10: Whole Systems in Action

Come to the conference to see WSIA in action and see how innovation in today's building and development is creating a more sustainable present and future for our region. Click here for more conference information and to register.

Some highlights for the conference include:

Wednesday 3/7:Green Venture Capital with Zaid Ashai of Point Judith Capital
This session will focus on Clean Technology investments for Point Judith Capital, including investments in companies like Earth Aid, Nexamp and Power Assures. Attendees will learn what venture capitalists are looking for and the kinds of opportunities they are funding.

See here for a full listing of Wednesday's sessions

Thursday 3/8: Finding Your Place in the Next Economy, with John Abrams, John Cavanaugh Terry Mollner
Our economy is based on constant growth, but the growth economy is likely to skid to a halt (or it may have already done so). Many are working on the transition to a new steady-state economy, but what will it mean for us? John Abrams will convene a conversation with several leading practitioners and advocates for the New Economy.

See here for a full listing of Thursday's sessions

NESEA 2012 Building Energy conference is the place to be for anyone interested in sustainability. Do plan to attend at least 1 day of the conference if not all three. Click here for more conference information and to register.

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Transformational Economic Development

The profession of economic development was born in the 70’s to develop methods for attracting companies and jobs to a municipality or state. Times and conditions have changed and the profession has not.

This manifesto is a call, among economic development professionals, for the use of a fresh set of ideas and practices to guide the future of our economies.  The manifesto is not a demand to let go of the past, but rather juxtapose the future and the past as creative tension of the opposites.

A Manifesto

Robert Leaver New Commons

Scott Gibbs Economic Development Foundation of RI

Context for This Manifesto

NEDA held its 54th annual conference in Providence, RI, October 17 to 19, 2010. The theme was “Transformational Leadership in Economic Development.” It was designed to seed continuous conversation about the transformation of the profession and NEDA.  The entire conference was recorded and transcribed as a 78 page summary. This draft manifesto was inspired by conducting content analysis of what was said by presenters and participants.

Two words require explanation. Transform is to change the form or give a new form to something; in effect, change the substance, character or disposition of something – in this case economic development.  A manifesto is a public declaration about changing something that matters to you. Manifesto comes from the Italian “caught in the act, flagrant.” In effect, a manifesto is a coming-out.

Based on this manifesto, each community will be challenged to tailor, rooted in its own values and conditions, two things.  First, public policies – statements of what ought to happen. Second, local practices or what has to happen to change the game of economic development.

This manifesto challenges us to tell a new story for the future of economic development.

Current Reality of Economic Development

We know some economic development stakeholders are trying to change course. But as a general observation, the predominance of economic development activity is rooted in the old economy. The focus is still using old economic development practices, e.g., recruitment of capital through business attraction and economic development incentives. There is too much use of low-road strategies such as lowering business costs and regulatory relief. The focus of investment is hard capital instead of people as human capital. Absent of research supporting the efficacy of this approach, and an estimated $50 billion spent in economic development incentives annually, we really have to ask the question, what are we doing?

This Call to Action

The manifesto is a call to action to reinvent the way we think and behave about fostering economic health. This call to action demands true leadership from us, including the ability to integrate into economic policy formulation fresh questions. It requires the ability to break away from the economic development pack and do things differently.  It requires us to be willing to depoliticize economic development and build an inclusive, collaborative, and knowledge-based community dialogue concerning the future of our local, state, and regional economies. It requires us to focus on long-term transformational strategies and look away from the desire for short-term, incentive-driven quick fixes. It requires us to be aware of our propensity to develop economic development institutions instead of what we need: economic development systems or networks. And finally let us build economic development cultures that are value-based, not strategy blinded.

Motives – are what drive change

The conditions of the 1970’s that defined the profession of economic development have changed. Chris Martenson told us in Providence in October 2010: “The next 20 years is going to be completely unlike the last 20 years.”

• The motives, or drivers of change, are framed as what-if questions born from the issues discussed in last year’s NEDA conference:WWhat if the economy does not resume growth at a compounded rate? What does that mean to our financial institutions, and the capacity of our public sectors to provide adequate services?
• What if the cost of energy continues its upward trajectory (notwithstanding its continual fluctuations)?
• Our economic system must grow, but how to do it in a resource-constrained world of less energy...less natural resources...less money?
• What if the gulf between the haves and have-nots continues to widen? Stated otherwise, what if we continue to witness the decline of the middle-class?
• What if we continue to experience increasing economic change and volatility? How do we react to increasing mobility of capital, and declining product/company lifecycles?
• What if manufacturing is a future growth industry?
• What if what we are experiencing is the new normal?

None of us has the answer to any of these questions. We all know we are experiencing a fundamental change in our competitive environment.  And this fundamental change demands different approaches to facilitating economic health (notice, we didn’t use the term economic growth). We need a redesign in the face of increasing economic globalization and financial risks...continued depletion of our natural resources...concerns over environmental degradation...failure to develop our people...are all risks that cannot be ignored.

Vision – an achievable dream of what has to be different for economic development

• Integrate economic and community development.  Build the capacity of a local community to be resilient to adverse shocks and include diverse stakeholders at the table.
• Ensure that business drives economic development.  And that business has staying power when elected officials change.
• Advance the profession as a profession in the eyes of the public, especially politicians
• Evolve three new economic development roles: manager of serendipity, educate/cultivate conveners and coordinate and accelerate networks.
• Bring young people into the profession...young people who don’t think like the elders and use technology in effective and creative ways.
• Redesign the business model for economic development to get paid differently than only using tax money. Develop entrepreneurial/earned income funding models that do not rely on the public dollar alone.  Develop funding models that reward collaborative behavior, such as sharing credit, across silos.

Values – taking a stand on what really matters

Foster value-based leadership to evolve economic development professionals. These values are fundamental to shaping the future of economic development, programs, organizations and systems.

• Use crowd-sourced innovation and not internalized innovation. Capability solutions are now global.
• Live a stakeholder-drive, ethical mindset and not stockholder mindset...do what is best for the local community.
• Collaborate among diverse partners through continuous dialogue and not control and credit.
• Use systems and networks and not stand-alone organizations. Rely on intangible assets such as trusted relationships as the competitive advantage. Competitive advantage is now about connecting people, processes and ideas in combinations that are not replicable.
• Work with economic development predicaments and not problems. Problems have known or achievable solutions, while predicaments have outcomes not yet known. Predicaments need to be mitigated, as there is no 100% fix as there often is no solution. To face our predicaments, we must mount many experiments because we can’t predict which ones will take hold.  
• Rely on Information/knowledge to make an effective case and not opinions and anecdotal information...and foster transparency and metrics and not hubris and self-promotion.
• Use a pull-strategy focus and not a push-strategy.

Creative Tensions – opposing ideas to hold at the same time

These “opposite” ideas have to be held in our minds at the same time without getting seduced into letting one side go in favor of the other. Each pair is a creative tension, where one side is more familiar and historically used in economic development. With each pair, one side is newer to the economic development profession. It will take a lot of heavy lifting to keep the newer idea in our minds.

• Short-term thinking...Long-term thinking
• Transactions...Transformations
• State focused...Regionally focused
• Political....Transparency, equal access
• Old organizations...new organizations
• Attraction of companies from elsewhere...grow local companies from the inside through “economic gardening”
• Fixed-capital investment…human-capital investment
• Strategic planning…vision/mission/value acculturation

The intent of these creative tensions is not to imply that they are mutually exclusive, but rather to emphasize that it is a question of balance or learning how to stand in the tension of the opposites. For example, let’s not lose our ability to do transactions, but strive to continually transform at the same time.

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