Johnathan Holifield - Global Detroit - Inclusive Competitiveness - America21

Building Inclusive Competitiveness in Metro Detroit

Global Detroit TechTown Presentation

May 10, 2012

Johnathan M. Holifield Co-founder and Chief Strategist & Evangelist, The America21 Project

johnathan@blackinnovation.org

www.BlackInnovation.org

Part I. Peeling Back the Onion of Metro Detroit’s Innovation Economy and Ecosystem

America21 defines the Innovation Economy as the period in the late 20th and early 21st centuries

marked by radical socioeconomic changes brought about by the:

• further globalization of commerce • democratization of information • exponential growth of entrepreneurship, and • acceleration of new knowledge creation

2012 Copyright Johnathan M. Holifield, Principal and Co-founder, The America21 Project, Inc. and Founder, Trim Tab System, LLC

What is the Innovation Economy?

Economic Crisis Squeezing Metro Detroiters

Innovation Economy Pressures: New & Unrelenting

Overview of negative Innovation Economy impacts on Metro Detroit: • Decline in traditional, industrial manufacturing • Globalization of auto industry • Dramatic population decline • Inability to create new jobs • Devastating crime • Exacerbated racial tensions • Talent flight – Black and White • Negative quality of place impacts

Crisis Undermined Economic Competitiveness

“TAPIM”

Economic Competitiveness Crisis Triggered . . .

• Thought • Advocacy • Policy • Investment • Market

Deeply understanding the progression is absolutely crucial.

What is “TAPIM”?

Cannot overstate – deeply understanding the progression is absolutely crucial.

What is the “TAPIM” Progression?

Momentum Buildup

Breakthrough

Sustained Execution

“TA” Produced New Metro Detroit Economic Narrative

Led the way in articulating and inculcating a new narrative to increase Metro Detroit economic competitiveness –

leading to the formation of new economic Policy.

“TAP” Led to New Economic Investment

Key assets providing new Investment to increase Metro Detroit economic competitiveness.

“TAP” Informed and Created New Economic Investment

Regional philanthropy $100M+ (8 yr) and State of MI hundreds of millions of $$ to increase

Metro Detroit economic competitiveness.

“TAPI” Triggered Market Response

Market connected into new “TAPI” to create Metro Detroit’s innovation ecosystem – designed to

increase economic competitiveness.

Metro Detroit’s innovation ecosystem

Recalling and deeply embracing the progression is absolutely crucial.

New “TAPIM” Created and Nurtures . . .

Building Inclusive Competitiveness in the Metro Detroit:

Part II. Overview of Black and Hispanic Businesses: Good, Bad and Ugly

U.S. Census Bureau Reports between 2002 and 2007: Hispanic-Owned Businesses Increase at More Than Double the National Rate Hispanic-owned businesses increased by 43.7% to 2.3 million, more

than twice the national rate of 18.0% 249,168 had paid employees, an increase of 24.9% Employed 1.9 million people, an increase of 25.7% Payrolls totaled $54.6 billion, an increase of 48.7% Receipts totaled $345.2 billion, an increase of 55.5%

Nationally, the Good News . . . Positive Trends

U.S. Census Bureau Reports between 2002 and 2007: Black-Owned Businesses Increase at More Than Triple the National Rate African American-owned firms increased by 60.5% 1.9 million firms,

more than triple the national rate of 18.0% 106,824 had paid employees, an increase of 13% Employed 921,032 million people, an increase of 22.2% Payrolls totaled $23.9 billion, an increase of 36.3% Receipts totaled $137.5 billion, an increase of 55.1%

Nationally, the Good News . . . Positive Trends

U.S. Census Bureau Reports between 2002 and 2007: Black-Owned Businesses in Metro Detroit Increased at Nearly Four Times the National Rate African American-owned firms increased by 71%, to 53,380 firms,

almost four times the national rate of 18.0% Receipts totaled $3.7 billion, an increase of 16.9%

Metro Detroit Good News . . . Positive Trends

U.S. Census Bureau reports the Hispanic population at more than 50 million or 16.3% of U.S. population 16.3% of U.S. population Hispanic Business Productivity is $345.2 billion U.S. Gross Domestic Product is $14.2 trillion

Bottom Line: More than 16% of U.S. population accounts for less than 2.5% of GDP

Bad News . . . Profoundly Unbalanced Contribution

U.S. Census Bureau reports the Black population at 12.6% of U.S. population 12.6% of U.S. population Black Business Productivity is $137.5 billion U.S. Gross Domestic Product is $14.2 trillion

Bottom Line: Nearly 13% of U.S. population accounts for less than 1% of GDP

Bad News . . . Profoundly Unbalanced Contribution

U.S. Census Bureau reports the combined Black and Hispanic population in the U.S. is about 29% Bottom Line: Nearly one-third of U.S. population accounts for less than 3.5% of Gross Domestic Product

Ugly News . . . for the U.S.

U.S. Census Bureau reports the Detroit MSA Black population at 23% 23% of Metro Detroit population Black Business Productivity is $3.7 billion Metro Detroit Gross Regional Product (GRP) is $198 billion

Bottom Line: More than 23% of Metro Detroit population accounts for less than 2% of GRP

Ugly News . . . Metro Detroit, Mecca of Black Business

According to Brookings, metropolitan areas contain 68 % of the nation’s multiracial population, 74% of Blacks and 80% Hispanics. America’s innovation assets are highly concentrated in U.S. metropolitan areas where Blacks and Hispanics live:

78 % of patents 85 % of new firm starts 69 % of high-growth firms 75 % of GDP 68 %of jobs 96 % of venture capital 81 % of R&D employment

Assets are invisible to those disconnected from them

Invisible Assets

Black unemployment rate double Whites – 40+ straight years!

“Job Growth in U.S. Driven Entirely by Startups” Kauffman Foundation Study

The invisibility of the Innovation Economy to Black and Hispanic Americans and their disconnection from it,

results in the absence of job creating high-growth enterprises - a profound inability to create new jobs.

Profound Consequences

Building Inclusive Competitiveness in Metro Detroit:

Part III. Competitiveness: The Economic Physics of the Matter

No region can sustainably increase economic competitiveness without growing enough of the right people to create and take advantage of that increased

economic competitiveness.

If your region’s economic competitiveness goals consistently outpace your growth rate in the right people,

you simply will not – indeed cannot – build a resilient, economically competitive region.

Inspired by Packard’s Law of Hewlett & Packard Co-Founder, David Packard

Law of Economic Competitiveness TM

No region can sustainably increase economic competitiveness without growing enough of the right people to create and take advantage of that increased

economic competitiveness.

If your region’s economic competitiveness goals do not focus on inclusion, you simply will not – indeed cannot –

grow enough of the right people to build a resilient, economically competitive region.

Inspired by Packard’s Law of Hewlett & Packard Co-Founder, David Packard

Law of Inclusive Competitiveness TM

In an increasingly flat and uncompromisingly competitive 21st century world, we cannot afford to

have large portions of our population contributing less than their full measure to the nation’s economic

competitiveness.

It’s time for All Hands On Deck . . .

Where we are . . .

Building Inclusive Competitiveness in Metro Detroit:

Part IV. Inclusive Competitiveness Solutions

“TAPIM”

Inclusive Competitiveness Crisis Triggers New. . .

Developing and implementing Inclusive

Competitiveness strategies responds to the same needs and follows the same path that created Metro Detroit’s

innovation ecosystem.

Recalling and fully embracing Metro Detroit’s proven path is absolutely crucial.

Follow the Proven Path . . .

Follow the “TAPIM” Progression

Momentum Buildup

Breakthrough

Sustained Execution

• New Thoughts and new Advocacy to produce a new economic narrative

• New economic narrative breaks through to form new Policy

• New Policy attracts new Investment • New Investment ignites new Market responses Deeply understanding and fully embracing the “TAPIM”

progression is absolutely crucial.

Time for Inclusive Competitiveness “TAPIM”

Benchwarmer

Metrics and strategies to improve Black and Hispanic performance in areas important to Metro Detroit’s

economic competitiveness. Will we be benchwarmers or competitors?

Competitor

What is Inclusive Competitiveness?

New Individual Practices New Organizational Practices

Bottom line: Trim Tab Practices

How Is Inclusive Competitiveness Delivered?

Individuals and organizations

are the Trim Tabbers

Metro Detroit Innovation Economy assets are the Rudder

High-leverage individual and organizational actions that turn the rudder and, ultimately, turn the ship in the

desired direction 2012 Copyright Johnathan M. Holifield, Principal and Co-founder, The America21 Project, Inc. and Founder, Trim Tab System, LLC

Metro Detroit is the Ship

What are Trim Tab Practices?

• Lack high-leverage intermediary functions

• Lack high-leverage intermediary organizations

• Lack high-leverage intermediary practices

Existing economic leadership infrastructure is

necessary, but alone is insufficient

Bottom line: No Trim Tab Impact

Black and Hispanic Communities

©2012 A21 2012 Copyright Johnathan M. Holifield, Principal and Co-founder, The America21 Project, Inc. and Founder, Trim Tab System, LLC 2012 Copyright Johnathan M. Holifield, Principal and Co-founder, The America21 Project, Inc. and Founder, Trim Tab System, LLC

Trim Tab Practices Yield Results

• Unique experience - may be only Black to Launch and Lead Regional Technology and Innovation Initiative

• $600K into $5M of Entrepreneur Economic Impact

• $40M into $250M Early-stage Capital Network

• Innovation-based HS/Turnaround Education Model

• Regional Tech Workforce Alliance

• Statewide Innovation Organization Alliance

• $40M+ Grants, Cash, In-kind Support

Not the only way . . . a proven way

• Cannot Incent Right Behavior From Wrong People

• Treat Problems Like Market Opportunities

• Lead by Action, Persuasion, Influence

• Conspicuous Public Presence

• Flexible and Well-networked

• Strong Convictions

• No Fear of Judgment

• Energetic Creator

Individual Trim Tabber Attributes

Organizational Trim Tabber Attributes

• Archimedes – “A firm place to stand . . . “

• Well-networked Facilitators

• Disinterested, Not Uninterested

• Hub, Spokes and Nodes Approach

• Honest, Objective Broker

• Flexible, Agile Drivers

• Entry/Outreach Portal

• Cross-ecosystem Leadership

Trim Tabber Focus Areas

Expressing and inculcating 21st century “TAPIM,” focused on three basic pillars:

1. STEM (and STEAM/including arts) education

2. High-growth entrepreneurship

3. Capital formation and investment

Part V. 8 Trim Tab Practices to Infuse Inclusion in Metro Detroit’s Innovation Economy and Ecosystem

Practice 1: Comprehend Speed of the Game

• Bo Jackson Moment

• High Bar for Everyone; Higher Bar for Us

• Further Democratization of Information

• Most Meritocratic Economic Era

• Money, Without Collateral

• Not the Civil Rights Struggle

• Flatter World

• No Magic

Practice 2: Mine the Environment

• How Innovation Ecosystems are Built

• Innovation Asset Urban Location

• 19th and 20th Century Asset Visibility

• 21st Century Asset Invisibility

• Making the Invisible, Visible

• End of the Day . . . The Market Must Respond

Practice 3: Begin at the Beginning

• Measure Competitiveness, Not Participation • Innovation Asset Stewardship Mapping Angel Networks/Venture Capital Sources/Banks Innovation Councils/TBED Orgs./VDOs Bioscience/ICT/Adv. Manufacturing Companies University/Corporate Research Capabilities Chambers/Econ. Dev./Philanthropy Incubators/Accelerators

Practice 4: “The Way” Over “The Thing”

• Simple Process (Way)

• Deployed on Diverse Content (Things)

• A.O.L.

Aggregate key wealth and resources

Organize them into actionable forms

Leverage them to achieve desired impact

• Engine Oil

• Public Policy

• “Private Policy,” i.e., the Big Metro Detroit Agenda

• Integrate into the Value Chain (Wetting Beaks . . . Don Fanucci)

• Money

Practice 5: Be the Lubricant

Practice 6A: Encourage Entrepreneurial Churn

• Old Notions of “Economic Stability”

• Energy, Vitality, Creative Destruction

• No undefeated seasons

• Must Prepare for Losses

Practice 6B: Encourage Entrepreneurial Churn

• No “defeated” seasons, either!

• Gotta have wins

• No to Risk-Averse

• No to Risky

• Yes to Risk-Astute

Practice 7: Pursue Exponential Impact

• Leverage, Leverage, Leverage

• Measure Outcomes

What gets measured gets done

What gets measured and rewarded gets done well

• Aggregate Incremental/Exponential Breakthrough

Practice 8: Embrace Asset Obsolescence

• Trim Tabber Role = flexible/enduring

• Innovation Ecosystem = adaptable/enduring

• Innovation Ecosystem Assets = constant change

• No Asset has “Right” to exist

• Only Support Assets Demanded by the Market

Concludes Presentation . . .

Let’s Talk

Contact:

Johnathan M. Holifield Co-founder, Chief Strategist & Evangelist The America21 Project

Email: johnathan@blackinnovation.org or jholifield@nortech.org Phone: 216.274.0267

Global Detroit TechTown Presentation

May 10, 2012

Johnathan M. Holifield Co-founder and Chief Strategist & Evangelist, The America21 Project

johnathan@blackinnovation.org

www.BlackInnovation.org

Johnathan Holifield - Global Detroit - Inclusive Competitiveness - America21

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