Bad news this morning when we came to set up for Providence and Beyond with John Abrams - South Mountain Company offices were burglarized last night, and John must stay on Martha's Vineyard to deal with the police, insurance, etc.

We are soldiering on in his absence and with Robert, a longtime colleague, playing both roles in what was to have been an In the Actors Studio type interview. We'll shorten this portion considerably and add the time to the cafe. 

John and Robert worked together on the Martha's Vineyard 50-year plan. The Island sought to diversify its economy from just tourism. But the planners recognized the need to look at the ecology, the economy and the Island's culture _before_ examining the built environment.

We also hoped John would talk more about the cooperative structure of South Mountain. Rather than an ESOP (employee stock ownership plan), it's a true cooperative where a finite number of people are both employees and owners. At least two factors are driving an increasing popularity of this model:

1. Baby Boomers who have started businesses want to get out, but don't want to sell out
2. Many entrepreneurs want to stay connected to their companies after they step away from full time management

We were going to talk some about the counterintuitive business approach at SoMoCo. They insist on building high levels of affordable housing, and it is very difficult to determine which units are affordable and which are "market rate".  

Lastly, we were going to ask him about how SoMoCo is dealing with the current economic downturn, especially in the housing sector. They list six steps they will take, and none of them is layoffs. Never was it suggested that the newest employees be more vulnerable, nor was it suggested that they take the opportunity to "cull" the workforce, eliminating the least effective workers.

Instead, the crisis has served to unite the company even more strongly.  

Our current plan would reschedule John sometime in January or February 2010. We hope to announce it in a few days.

If you're unfamiliar with the experience, a busy or even not so busy day in Manhattan sees something around 3 million people occupy 23 square miles, with most of them packed into the middle. These people walk at a very quick pace, and they very rarely collide. It's a live action dance improvisation on a truly massive scale.

When I was a child my father would take me with him to New York where he worked. I quickly learned the basics of walking in the city: walk fast and don't get in anybody's way. I was really impressed with how fast New Yorkers did things - how fast they walked, how fast they talked and how fast they accomplished the moment-to-moment transactions of urban life. But most important, I learned that failure to execute an appropriate and timely action brought shame and scorn upon the transgressors. They had branded themselves as "out-of-towners".

Even though we had taken the train from Connecticut, we were considered New Yorkers because we acted like New Yorkers. 

The Three Standards

As I spent more time in New York, I would watch the traffic patterns from the windows of buildings, sometimes for hours. And, of course, I walked the city from Harlem to the ferry. Clearly, I've spent more time researching the subject than may be good for my sanity. But I finally got down to what I think is the core of the New Yorker's code of transit conduct - The Three Standards. 

1. Keep Moving
2. Don't Prevent Other Movement
3. When 1 and 2 conflict, follow The Rules.

These standards enable the mad but successful weaving of people, cars and bicycles in the street and sidewalks of New York because, unlike rules, they are flexible enough to apply to almost every shade of nuance one might encounter "in the field". That said, having The Rules as a backup supports large amount of successful, extra-legal action that does no harm and adds great efficiency to the system. 

Rules are too rigid for these situations. But a set of standards that guide behavior allow for thousands of interlocking temporary complex adaptive mini-system to execute an intricate weave spur-of-the-moment. We're talking about tens of thousands of people making an endless series of split-second decisions based on the rate and trajectory of dozens of separate, self-directed objects each with its own set of goals.

They do this at a terrific rate, and yet they almost never collide. David Weinberger - Fry favorite, co-author of Cluetrain and one of the uber-nerds at Harvard's Berkman Center - refers to this as "tacit governance", a soft governance of standards (norms, he calls them) without explicit rules.

A Simple Example

The simplest example is the single pedestrian approaching a red light. Does she cross against the red or not? Standard 1 says keep moving, but will that motion violate Standard 2 by preventing other motion like, say, a taxi cab going 45 mph? If so, then the pedestrian follows The Rules, but only until the cab has past. If there is a safe window of opportunity, the pedestrian crosses against the red and is considered to have followed The Standards even though she broke the rules.

As we add more elements to this example, the The Standards' flexibility allows for virtually any situation. Perpendicular pedestrian traffic, for example, would have priority as they 'have the light'. Their continuing motion, supported by Standard 3, is more important than our single pedestrian who must still make a separate calculation about crossing 'against the light'. Thus, she would yield to let the crossing pedestrians 'make the light', then approach the intersection and consider her next move. 

The Expectation of Compliance

New Yorkers make these decisions almost without thinking because The Standards are so much a part of their everyday life. According to Weinberger, tacit governance only exists when compliance is nearly universal and non-compliance is dealt with organically. In New York, a simple "Go back to Jersey" usually gets the point across.

This expectation of compliance - that another pedestrian will recognize the priority of your motion and allow you to continue - is the heart of the system. There isn't time to consider whether or not all the other moving entities are aware of The Standards.

You act as if they do. If the don't, you tell 'em all about it.

Live blogging

7/16 Providence & Beyond

Round 1
Major Factors in the Next Economy

Provocation #1

WHEREAS:
•    The current economy is in “creative destruction:” the products and services previously developed are falling apart
•    The next economy is growing around these ideas: heal the ecology, develop clean energy and cradle-to-cradle product cycles, build healthy ‘whole place’ neighborhoods/communities
•    Everything is getting smaller, lighter, smarter, packed with more know how…think i-Phone…”small is beautiful”

THEREFORE,
•    Design thinking will reinvigorate every segment of the economy: growing food, making things, serving people, developing knowledge

COMMENTS
Add transportation/mobility/flow
Design thinking then doing - fixing 'award winning' buildings
Relationship between design thinking and ecosystem destruction - we make things smaller, but make more of them so there's no net decrease of material use
Challenge: creative destruction 'full of ideology' - just a cyclical reinvention of the economy
Bifurcating economy where affluent follow green thinking, less affluent don't (challenged by anecdotal evidence - "they" get it)
3rd world countries "great at recycling because we need to use everything we get"
Challenge: creative destruction -
Challenge: new products/services - is that what drives the economy? Since 65, rate of mfg profit has dropped - current global situation shows overcapacity. Long trend of boom/bust - first phase is product oriented, then shifts to finance as markets are saturated. Not clear that they are cyclical. Usually based on a new place usurping markets.
Local angle - 'only thing growing and thriving is government' - if we replace factory mills with condo mills, what happens to the other housing stock?
Wood is an irreplaceable factor on the planet


Provocation #2

WHEREAS:
•    Non-compete clauses are unenforceable in California but enforceable in Massachusetts
•    In the 1980s, each had a small but growing IT sector
•    In California, Silicon Valley drove an unprecedented wave of innovation and economic expansion
•    In Massachusetts, Rt. 128 failed to reach its potential
•    An economy functions as a whole system where each element is dependent on many others for life. Elements advance based on co-evolution and co-determination
•    An ecosystem includes more than just companies – also disruptors, mavens, social/civic entrepreneurs, connectors as well as the places where they congregate
•    The denser and more layered the ecosystem, the richer the output

THEREFORE:
•    An ecosystem-oriented development strategy is essential to economic prosperity

COMMENTS
Hunter/gatherer societies - provocation is true of older societies - level of technology determines how we exploit environment. Technology evolving so its impact gets redefined over time
- artist comment: I'm hunting and gathering, just in a different way.
Ecosystem can't be managed or control - an ecosystem that is nourished (as opposed to a development strategy) is essential...
Add the qualifier "sustainable economic prosperity"
Ecosystem model - one of constant change. Strategy would help us develop an ecosystem economy
Choosing winners break the model, breaks feedback mechanism
Challenge: currently MA's economy working better than CA's - CA unemployment 50% higher than MA
We can't pick winners, but we can enable a process to evolve as an economic development paradigm - what has to go into the system to nourish -
Challenge: Without including people and relationships in the conversation, language sanitized and not nuanced. Is this healthy for people, this success in the IT sector a good thing?
Challenge: Was the non-compete all that important or just one of many factors?
Challenge: Stop using the word "ecosystem" - confuses holistic approach with the natural environment
1986 CA study: predicted that biotech was bad bet for local/regional economy
In RI, we need to focus on the basics, not go off on tangents
On concept of flow, US still strong maybe because of natural flow. The more we incentivize, the more we 'screw up the natural flow'
Challenge: how do we define "prosperity" - in another conversation, the basic discussion went from buildings (20 yrs ago) to quality of life (today)
Citation: google redefining progress


Provocation #3

WHEREAS:
•    Corporations in our region are not providing the number or quality of jobs that they have in the past
•    Many jobs in the future will not be “jobs” but “work” where wealth is created in other forms
•    Entrepreneurial traits are “randomly distributed in the population” to “at least one in six people” (David McClelland: The Need for Achievement)
•    Newly-created companies have greater economic impact than relocated existing companies

THEREFORE:
•    The next economy requires a new definition of entrepreneurship that recognizes various sizes (self-employed, Mom & Pop, slow- and fast-growth companies) and various types (commercial, social, civic) of endeavors as part of the economy

COMMENTS:

Extend: nurtures, enables, connects, not just 'recognizes'
Recognize that entrepreneurship should go beyond traditional econ dev thinking
Extend: development of entrepreneurial thinking and doing that extends beyond business
Teaching/expanding entrepreneurship needs it to be pushed through all our systems
- Entrepreneurship: accountability for ones life
- Motivating people to entrepreneurial action
- teachable or 'inherent trait'
- always as "one's own company" or can it be inside an existing company
Over past couple of decades, the 'safe company job' has gone away, so people become their own product - inherent entrepreneurship
Class on green entrepreneurship - now forming a cooperative - 111 startup ideas
- not about big companies, but all the little companies that support the big one
How do we look at the pace of the entrepreneurial world - can we slow it down?
- have to shrink the economy to slow the pace
- 'don't shrink the economy' but have a choice
Risks to entrepreneur are so great that we only talk about the successes
- social piece of the equation - costs of failure on families
- - failure has never been so popular
- - "within the class of people that are likely to do so"
- do people really have a choice
- - once you step into a path, choice largely becomes moot
- - - expectations are what keep people in their paths, not lack of choices
Immigrant perspective: good students 'at home' fail in the US, something in the system turns them off to education
- is it really the students that are failing?
Use of the word 'entrepreneurship' - that there's an elite club of a few creative people that innovate. People need jobs.
- need to value non-entrepreneurs

Round 2
Supporting Innovation

Provocation #1

WHEREAS:
•    97.5% of start-ups are bootstrapped - they borrow small amounts of money here and there from friends, relatives and credit cards (<$100,000)
•    Less than 0.03% of start-ups get venture capital and the minimal threshold investment is in the mid 7-figures (~$5,000,000)
•    Innovative funding/lending options (social lending, micro-banks, “patient capital”, micro-enterprise grant funds, local currencies) are starting to fill in the gaps

THEREFORE:
•    The next economy requires a capital structure that recognizes and supports a very large number of very small enterprises

System now: the more you need capital, the less you qualify and vice versa - can that change?
- how long can you self-finance
- (Robert's story about self-financed company)
- again, we only tolerate/discuss success
- we have to talk about what's normal, it can't be anecdotal
Research: Small business failure rate is under 20% -
Research: Most job creation comes from small existing companies, not start-ups - giving $ to entrepreneurs often just burns that money
- what about new business development pipeline - you need to keep adding to the beginning of the process
Challenge: new funding sources are too small and disconnected from larger economy to make a difference - $5k grants not very meaningful
Challenge: THEREFORE needs to recognize all scale of businesses
Small biz perspective: was a gradual, evolutionary experience - hard to define the stages - just keep moving forward with new ideas
Why should we care? What's the social benefit?
- define the goals
Capital is not free, but it should be patient - easy capital is almost always wasted

Provocation #2

WHEREAS:
•    Current public policy does not recognize many of the new forms that entrepreneurship is taking
•    The forms include cooperative ownership, collaborative entrepreneurship, social enterprises, L3C (low profit) corporations, a cooperative of cooperatives, etc
•    Newly-recognized “loose connections” are facilitating the rapid creation and dissolution of enterprises that exist for a short period to achieve a specific goal

THEREFORE:
•    The next economy requires major, new public policy that recognizes these new formation and support their rapid creation and dissolution

Concern: public policy results in bureaucracy -
Concern: bureaucracy doesn't support dissolution
- is there a place for public policy?
If there are issues, people need to advocate for the change
Simplicity matters: the more complicated it gets, the more it costs
- selling stuff out of your front room is not easily made legal - requires special permits - why?
- even if everything is small, you can't escape the complexity of how big our society is
Public policy drives money, and money drives outcomes
- current stimulus has special green component - it's having a real effect now
- impediments of structure limit some activity
- - 4 people getting a mortgage together: basically impossible
- - banks thought Dirt Palace was prostitution
Much basic research is done from the public funding
- NIH for biochem, NSA/Pentagon for computer sci
Solar industry perspective: 70s solar industry 'killed by Jimmy Carter's generous handouts
Challenge: losing the human perspective

The source (not specified) is Indeed's own listings that aggregate postings on company career pages and major boards. They have some filters to eliminate duplicates, but as this shows , this is really two jobs listed as four jobs. So the degree of overlap could play a significant role. Places that have offices of major employers that aggressively post on multiple boards as well as their own website will have some increase in representation.

Also, they don't define how they calculate what a 'metro' is. Lets assume it's "metropolitan statistical areas" or MSAs. An MSA is not, IMO, a good proxy for economic development area. It's too small. I grew up in a town that's part of the Bridgeport-Stamford-Norwalk MSA, but everybody worked in NYC. While that MSA has more in-market workers now, the Metro North trains are packed taking workers to the city. Economic development is more regional than local.

Finally, because the state boundaries put a good part of our metro in another state, all the jobs in the Attleboros, etc. probably aren't counted. It really depends on how they parse their listings. The odds are good that the population figure is based on the MSA, which includes Fall River, etc, but the jobs number is RI-only. 

I guess that's a long way of saying that you have to take any given statistical output in its proper context.

Lies, er, Statistics About Rhode Island

I was at the People's Power and Light annual meeting last month, and Ken Payne (who is wikkit smaat, BTW) spoke a bit about why Rhode Island has the nation's lowest per capita energy use. It's certainly not because of any program by the state to reduce energy use. It's actually quite simple, entirely due to our small size, and not all that great an indicator for us.

Three factors have come together to create our statistic. First, we are very small, so small changes make a big difference for us statistically. Second, we are on the ocean and even have the bay in the center of the state. This strongly moderates the ambient temperature, so we're usually a few degrees warmer than, say, Worcester in the winter and a few degrees cooler in the summer. The take away is that our heating/cooling demand is, per capita, lower than our larger neighbors who have land far from the coast.

The last factor - and it's the "not good" part - is that our industrial demand is very, very low. Industrial demand can be a huge part of a region's energy demand, and ours has dropped as factories close down. Replacing industrial demand in a factory with residential demand in a converted factory is not even close to even.

The take-away isn't that statistics can be misleading. It's that RHODE ISLAND statistics are more misleading than others because our small size makes us statistically unstable.

Now as to that study that shows we're psychologically unstable ... DUH!

I recently started a community wiki about Pawtucket and I've been focusing on transportation. (Duh, it's Pawtucket.) Using RhodeB.us, I have links to all Pawtucket bus schedules. That's important, but it's not the most important aspect of this little hack. To me, this is a testament to the power of several active trends, including open source software, hacker/maker culture, direct citizen action and the unique culture of the greater Providence region.

Not to go too far under the hood, but open source software is software the source code of which is publicly available. This movement has created several well-known and widely distributed programs. In this case, the ubiquitous PHP (hypertext preprocessing) web development software used in the RIPTA sitehas facilitated this hack. PHP is fairly simple (as far as programming languages go) and works under some basic standards that have allowed our hackers to enter the site through a side door, if you will.

This hack is entirely benign. Better than that, it's entirely helpful. This is hacker culture at its finest. With expert knowledge and good intentions, programmers with no official capacity to make changes and without the knowledge or permission of RIPTA have vastly improved the usability of the RIPTA website. What's not to like? The term "hacker" may scare you, but not me. 

Citizens, therefore, have taken a direct action and provided a service to their community. For this, RhodeB.us get no reward other than the eternal thanks of anybody who needs to check RIPTA schedules often. They've done it as a civic good. And because THEY THEMSELVES USE RIPTA CONSTANTLY. Citizens taking action to improve the services they use. I'm thinking that's a good thing.

Which leads us to our final trend - the Providence culture. Geeks, hackers, makers, artists, enviro-greens, progressives and all the other subcultures that are so active these days have one thing in common: they (we) LURVE (the greater) Providence (region).  They recognize its shortcomings, but have the knowledge and the capacity to improve things. So they do.

To me, this is shockingly wonderful and a tremendously positive omen for the future. We need to find ways to unleash this power of well-qualified people taking direct action outside the official structure to rapidly and cheaply provide improvements to our infrastructure. It could be a hack for the RIPTA site. It could be a semi-regular citizens clean-up patrol. It could be anything and everything.

Do you have a pet project you'd like to just go ahead and do? Let us know. 

PS. One more time with feeling -- thanks, RhodeB.us. You've done us a solid.

I should add that none of the three speakers was from the bio/med field. Don Siegel is dean of the SUNY Albany B-school, Allan Tear is an entrepreneur and founder of Providence Geeks, and Rich Bendis runs Innovation America, a group that helps city-regions develop innovation capacity. But, as I said, the room had a bio/med tilt. And that's what got me excited. 

Here is a whole new wing of the innovation economy that is only just beginning. Where we geeks have had several years head start, the direct university-to-commerce channel is functionally only in the planning stages. In fact, the whole purpose of the Business Innovation Accelerator event was to bring stakeholders together to discuss what RI-CIE can and should (and can't and shouldn't) do. Put another way, the event was trying to innovate ways to accelerate the business of setting up a technology transfer/commercialization center.

The process - he writes with some admiration - was a tightly managed facilitation where breakout groups clustered around pre-determined area: 

• Sector Analysis
• Women Entrepreneurs
• Issues of Technology Transfer (research perspective)
• Issues of Technology Transfer (commercial perspective)
• Gap Analysis: Innovation Businesses vs Main Street Businesses
• Local Conditions Analysis

We ran two rounds of breakouts - the first on obstacles and challenges and the second on workable solutions. In between each round, the large group reassembled and reported back. (Sound familiar?)

Sadly, I had to run out before the second report-back in order to set up for the Providence Foundation's Next Generation project. (More on that as it develops.) 

Regardless, my take-aways are all to the good. Where the geeks leverage RISD indirectly (arts/culture attracting high-knowledge workers), RI-CIE can directly leverage Brown, URI, RI Hospital and any research institution that wants to play. The availability of an innovation pipeline is sure to draw out RI's hidden venture capital and attract out-of-state capital as well.

I understand there's quite a lot of money in this health care thing.

I hope to keep up with this effort and will blog on it from time to time. I have very high expectations for RI-CIE, and with the crew running it and the crew they attract, I think those expectations will be fulfilled.

 

As before, the groups are not necessarily consistent from provocation to provocation.

Provocation 1: In the next economy, place matters more than transactions

Group 1: Confirm: place matters, but table has different perspectives. In regard to the competition of places. "Competition contributes to growth." Place is very good predicter of health outcomes, points into so many other spaces - economy, culture, etc. Question of taxes: cost vs investment.

Group 2: Mixed reaction - Challenge importance of place: internet drives placeless society. Confirm: some people need to try on their shoes, won't buy online. People want experience. The more diverse people we have, the better the quality of life. What is 'whole'? A situation where the various parts - culture, economy, ecology, arts, etc. - are working together. 

Group 3: Confirm: concept of 'happiness' studies - trust is crucial. Trust in RI is very low, esp in government. Even people in government say "It's RI. It's screwed up." As if it's our natural, inevitable state. -- Discussion of how difficult it is to do something that make Providence more 'whole'. But are we really that different from other places? New Orleans, Chicago, New Jersey? Formerly, an ombudsman helped manage regulatory environment for developers, but she died and was never replaced. 

Provocation 2: There is no separate creative economy

Group 1: Discussion - Industrial mindset destroys creativity countered with comment that manufacturing is still as large as ever in the US and in RI. 

Group 2: Add to: entrepreneurs need to find new ways to get things done, high level of creativity is a requisite, not an option. 

Group 3: Confirm: every economy has to be creative to survive. Also Challenge: is 'creative' really the best metric. Slave economy was 'creative' but didn't work for everyone.

Group 4: Challenge service 'with grace and in community': service sector is not in a creative place, especially in terms of front line workers. In some orgs/companies, the closer you get to the customer, the lower your pay.

Provocation 3: We are already at the beginning of the next economy 

Group 1: Partial challenge: How high can RI build given geology? More constrained by zoning, but zoning will have to change to meet growing infill needs? 

Group 2: Challenge infill needs: do you need to build more infill or save that for greenspace? 

Group 3: Challenge regionalization: how far down the specialization chain can you go before regionalization breaks down? 

Group 4: Challenge: Should we be talking about 'next' economy or the 'inclusion' economy? Manufacturing vs service economy - as if the one dies and the other is all that's left. 

Note: Groups are not necessarily in the same order from provocation to provocation. Also, see the post below for complete provocations. 

Provocation 1: Providence is the hub a regional economy that includes 3 states

Confirm, challenge or build on. Six minutes of small group discussion.

Group 1: Theory or reality? Current practices don't align with that statement. Why does Providence need to be the hub? Is hub the right word? Endup: Challenge of word "hub"? (offered alternative: node and links AOT hub and spokes) How do you establish the power to define "healthy mix."

Group 2:  Challenge: 'easily replaces imports with regionally made options' - sometimes, others can do things better than we can.

Group 3: Because of geography, our hub is off-center, our wheel is incomplete. /separate thread/ Economy is 3-dimensional with car-based mega-economy intersecting with smaller, local economies. 

Provocation 2: Some sectors are more important to a regional economy than others 

Group 1:  Challenge example of IT: cluster develops because region is supportive of that kind of creativity. Like minded people drawn to a region, artist or IT developer. Also challenge argiculture as central: so many fewer farmers, so much less local agriculture. Concept seems outdated. 

Group 2: Challenges agriculture as central: is it really about the hinterlands, or is ag moving to a more urban approach? Is ag really so place-based? Farm workers are mostly mobile. Capital can cross borders, but workers can't? Also challenges IT as placeless: our IT sector is all about community. Why does a place need to draw these "special" people? Why do economies have to 'compete' with each other? 

Group 3: Challenges example of IT: those workers want to be with similar people, go to where they congregate. On agriculture: to strengthen a place define 'what speaks to whom' in terms of stationary and mobile resources. Displacement of farms by other resources - major institutions are built on old farms.

Group 4: Challenges whole thing: too black-and-white. If not for IT cluster (web developers), who would know about the farmers market? 

Provocation 3: “Buy Local” programs are essential for a healthy regional economy 

Group 1: Challenge: should create a strong buy local vibe, not put ads on TV telling people what to do. Put the positive vibe out, don't bang people on the head. Why in Providence in the 90's? It has one of everything I want.

Group 2: Add to: Another logo isn't the answer, needs to be informational. Also, program should provide platform to support (shared website for farms, like FFRI). Providence is lucky without a major strip mall neighborhood, and a maker culture. Buy local tends to focus on foods, what about other sectors. People's Power & Light stresses local/regional distributed generation. Centralized generation is far less secure. In food, CA central valley will have/is entering a major water shortage. That will effect us. Will we be ready? Will one region be able to make up for another region's failure?

Group 3: Observation: Talked more about the buy local experience, not the 'ad campaign. 

 

 

Round 1: What is the Next Economy?

Provocation 1: Providence is the hub a regional economy that includes 3 states

Jane Jacobs, in The Economies of Cities, argues that healthy city regions are the most viable economic unit. City regions are not just about geography, or about exporting, or serving as the tourist attraction.

Rather, a city region:
•    Readily replaces imports from far away with locally/regionally produced goods and services
•    Engages in reciprocal trading among regional trading partners
•    Holds community and community building as central
•    Makes entrepreneurship the core driver of vitality
•    Provide diverse services and products – a healthy mix with no single engine/cash cow

As economic entities, city regions don’t have to respect state lines. Providence is the hub of the Southern NE city region that includes southeastern MA, parts of central MA, eastern CT and even the Cape and Islands. Our regional economy will not thrive if it is seen as confined within the borders of Rhode Island.


Provocation 2: Some sectors are more important to a regional economy than others

Not every economic sector can contribute to a regional economy in the same way, nor can every sector benefit in the same way.

Local agriculture is key to a regional economy because it draws concentrated urban income out to the broader region where farmland is located. On the other hand, because so much of IT work is essentially placeless, that sector will contribute minimally to the evolution of a regional economy.

Provocation 3: “Buy Local” programs are essential for a healthy regional economy

Money spent in the local economy has a powerful effect. Of each dollar spent at Starbucks, 38 cents circulates locally. That same dollar at an independent coffee shop circulates 73 cents locally, or almost twice as much.

But consumers often equate buy local with limited choice. Also, consumers may be apprehensive about trying new products or brands whose quality is unknown to them.

Official “Buy Local” programs are essential to educate consumers about the availability and quality of local products, and to communicate the benefits to the regional economy.

Round 2: What Needs Doing?

Provocation 1: In the next economy, place matters more than transactions

21st century economies require place to be at the center. Villages and cities are natural incubators of entrepreneurs and entrepreneurial companies because their density creates an atmosphere where ideas can circulate, combine, divide and, eventually, combust.

But not all cities and villages attract and hold entrepreneurs equally. More and more, overall quality of life is the factor by which potential locations are judged. Creating an attractive regional economy requires an expanded understanding of place that includes economy, ecology, culture, community people and geography. In this way culture, people and land become mutually dependent.

Put another way, the more Providence becomes a whole place, the more it will drive its transactional economy.

Provocation 2: There is no separate creative economy

There is no creative economy that exists or will exist apart from the overall economy. Creativity has been vital to our economies throughout the world since day one.  The creative economy, even the knowledge economy is not the next economy.

Instead creativity will be infused across the board to bring back and enliven all 3 of our historic economic eras:

•    Grow food in new ways and in new places
•    Make things that are smarter and smaller
•    Serve people with grace and in community

Provocation 3: We are already at the beginning of the next economy 

Almost any activity could be a path to the next economy because almost everything needs innovation. The overall challenge with everything we do next is: when we innovate, how can we source it or sell it regionally? Whatever “it” is.

All of these economic needs require innovation and could have or already do have a regional component:

•    Make things smaller and smarter so we use less and reduce waste
•    Oil supplies are past peak: build local renewable energy facilities
•    Make water – we are going to need it 
•    Energy retrofit existing buildings - 50% of current buildings will last 25+ years
•    Make more houses for more people in tighter spaces
•    Community activists, artists, and immigrants are becoming small-increment commercial developers
•    Most places have too many cars; create new on-demand forms of transit: bicycles, Pedi-cabs and so on
•    Place-defining experiences in neighborhoods: coffee houses, green grocers and boutique hotels….new public places for public meandering and public conversation
•    Develop adult literacy education for immigrants without grants
•    Alternative education and afterschool programs for at-risk youth

To reach the next economy, we do not need to create new industries, new companies, or new markets. We simply need to take the economy we have now, the needs for innovation we have now, and regionalize as much as possible.

Likely Improvements

1 - Right off the bat, it's clear the plan is to implement massive changes right away, particularly with regard to the new director to be drawn from a national search. That opens the door to new blood, new thinking and new possibilities for our economy. But the changes could also be for the worse. A lot depends on the new director.

2 - The report also emphasizes the need to coordinate the various state-level econ-dev units. Last year, the Economic Policy Council (EPC) - which developed strategy - was merged with the EDC - which was supposed to manage the implementation. The current report recommends abolishing EPC altogether to put strategy and implementation into the same agency. That leave only the Division of Statewide Planning to coordinate. Statewide Planning manages the state's comprehensive plan of which econ-dev is a part.

Our old pal Larry Quick referred to EPC/EDC/Statewide Planning as "the three-headed monster" and tried, in vain, to bring the three groups together. Now, it seems, the idea has taken hold. In reading between the lines, I believe the current recommendation implies that the EDC will consult with Statewide Planning, but deliver the econ-dev portion of the comprehensive plan as a fait accompli. (NB: Speculation on my part!)

3 - The report cites a strong perception (accurate or not) that EDC is "focused on landing the "big fish" from out of state" at the expense of helping existing businesses. It recommends re-focusing EDC entirely on supporting and growing existing and emergent businesses. Now, it should be noted that the EDC program Every Company Counts (ECC) focuses on micro and emerging businesses. Perhaps it is the very EDC/ECC distinction that creates the perception. Regardless of truth or fiction, emerging businesses don't see EDC as in their corner. (Chamber of Commerce, you, too.)

4 - The advisory panel recommends that EDC recognize and support industry sector support groups, specifically calling out Providence Geeks as an example. EDC and Providence Geeks partnered to create RI Nexus. What would the creative sector equivalent look like?

Potential Problems

1 - Right off the bat, it's clear the plan is to implement massive changes right away. Yes, that's #1 in Improvements, but it's also #1 in Problems. Who is going to be on the search committee? What will the job description say? What qualities will most impress them? Unless I miss the mark badly, the advisory panel is basically traditional econ-dev thinkers. The report shows a distinct lack of imagination and, sometimes, a bit of obliviousness as to the realities of the RI economy. Long story short: the new board and new director could be stuck just as deeply in the rut as their predecessors.

2 - In the 17-page report, the notion of public education is mentioned exactly once. An "underperfoming secondary education system" is listed as one of three "aggravating factors" behind our poor economic results. I really think that understates the problem. Much later in the report, they suggest the need to "provide employment opportunities for all levels of Rhode Island's population in the near term." Clearly, there's a recognition that there are gaps in the educational level of Rhode Islanders. But, again, they don't seem to take this issue very seriously. They do so at their peril.

3 - The advisory panel does not seem to believe or understand that Rhode Island hosts a healthy and growing creative sector (arts, culture, design, entertainment). You know, that whole Creative Capital whatnot. You'd think they'd have read a newspaper or something...

4 - The report demonstrates a continuing obsession with "job creation" to the exclusion of all other possibilities. Self-employment does not seem to play a role in their thinking, even though current estimates in New York indicate that 20% of workers are freelance/self-employed. Combine our unemployment rate (white collar layoffs) with our creative sector, and we could easily have that high a percentage. Of course, you'd also have to be looking for that kind of data, which NYC does. It took me about two years to get the phrase "1099 economy" into the lexicon of the geek sector. The advisory panel may take longer, yet. 

5 - Another data point that shows how the advisory panel is out of touch with the real world is their suggestion that, if the EDC became relevant to growth sectors, it could "indirectly create a team of potential "economic development ambassadors." Which is to say there are no such ambassadors currently. If the advisory panel had more boots on the ground, they would know how absolutely passionate, articulate and devoted the creative sector is about building the greater Providence region. The woman who's running the Pecha Kucha events moved from Portland, OR. When she goes back, she puts "Move to Providence" stickers everywhere.  

On Balance...

I remain cautiously optimistic about the possibilities of a newly imagined EDC. If they take this report as a start, and THEN GATHER A MUCH BROADER SET OF INPUT, they'll have a lot more buy-in from the very sectors they seek to support - micro- and emerging enterprises.