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Foundations of Open Source Economic Development Presentation 2 Curve 1
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Transcript of Foundations of Open Source Economic Development Presentation 2 Curve 1
I-Open’s Approach to Changing the World
Ed MorrisonI-Open
May, 2007
What happened to our grandfather’s economy?
Building Prosperity: The Basics
Climbing the Second Curve
The New Road Map
Setting Out: The Basics of Strategic Doing
I-Open Results
Innovation in our grandfather’s economy: Move a lot of stuff
Our Metrics of Success
The problem is that nothing stands still...
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 20000
20
40
60
80
100
120
140
160
Millions of tons
Steel production
1810 1820 18301840 1850 1860 1870 18801890 1900 1910 1920 19301940 1950 1960 1970 19801990 20000
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Population
Cleveland
Cuyahoga County
Steel declined, and the region’s leadership failed to see the transition
The consequence has been a decline in population and relative incomes
What happened to our grandfather’s economy?
Building Prosperity: The Basics
Climbing the Second Curve
The New Road Map
Setting Out: The Basics of Strategic Doing
I-Open Results
1
Rest of the
World
Traded
Businesses
Local Businesses
Purchases and paychecks
Your economy
Another
region
Brain Drain and
Purchases
Sales
3
2
1
2
3
Good Money: Import income into the
region with traded businesses
Neutral Money: Circulate the
income in the region with local
businesses and workers
Bad Money: Reduce the leakage
by reducing outside purchases
and workers
Economic Development in an Nutshell
Source: Ed Morrison
1
Rest of the
World
Traded
Businesses
Local Businesses
Purchases and paychecks
Your economy
Another
county
Braindrain
Sales
3
2
1
2
3
Competition for traded businesses is
now far more complex and global
Wal-Mart and the malls make
shopping a regional experience
Young people moving out have
created major brain drains
Economic Development Challenges in an Nutshell
A prosperous cycle of economic development
accelerates with a healthy civic spaces
Entrepreneurial
activity
increases
Tax base grows
Civic amenities
and infrastructure
improves
Lower taxes
Well-paid jobs
increase
Quality of life
improves
Skilled labor
supply grows
New firms emerge,
established firms
grow
Build a quality,
connected place
Build brainpower
with stronger work
skills
Build innovation
and entrepreneur
networks
Healthy
Civic Environment
Skilled people
move in
Source: Ed Morrison
A downward cycle of economic development
accelerates with a deteriorating civic environment
Entrepreneurial
activity
declines
Tax base erodes
Civic amenities and
infrastructure
deteriorate
Higher taxesWell-paid jobs
decline
Quality of life
deteriorates
Skilled labor
supply shrinks
Businesses
shrink or leave,
start-ups do
not arise
Business base
gets weakerDeteriorating Civic
Environment
Skilled people
move out
Brain drain as
young people
move out
Place develops a
bad reputation
Source: Ed Morrison
Virtuous
Cycle:
Prosperity
Downward
Cycle:
Decline
Years
Prosperity
Index
Consequences of different cycles
of economic development
Today
Source: Ed Morrison
What happened to our grandfather’s economy?
Building Prosperity: The Basics
Climbing the Second Curve
The New Road Map
Setting Out: The Basics of Strategic Doing
I-Open Results
What happened to our grandfather’s economy?
1930 1940 1950 1960 1970 1980 1990 2000
0
20
40
60
80
100
120
Cost index
Sea Freight
Air Transport
Telephone
Satellite
Costs collapsed
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 20050
100,000,000
200,000,000
300,000,000
400,000,000
Number of Internet Hosts
The Internet exploded
The Second Curve economy is emerging
First Curve: Wealth driven by large "command and control"
organizations
Second Curve: Wealth driven by "link and leverage"
networks
Source: Ed Morrison
On the Second Curve, dynamic networks rule....
Connect First Curve assets to Second Curve opportunities
Key Point 1:
Economic development is all about innovation
Innovation: Translating ideas into wealth
Learning to Climb the Second Curve
Innovation
Productivity
Prosperity
Key Point 2:
To innovate, we need to shift our thinking from hierarchies to
networks
There’s no top...no bottom...only links and nodes
Key Point 3:
Command and control habits do not work in
the civic space
The Civic Space
Most communities and regions are fragmented...People are still living in a Curve 1 world
The economic development “system” in Charleston, SC
Alliance
Mt. Pleasant
AlliancePartnership
County ED
Digital Corridor
Chamber
Chamber
Chamber
County
County
County$
$
$
BusinessInvestors
$
County ED
County ED
WorkforceInvestment
Board
ThinkTec
Low Country
Mfg.
Port
MUSC
Defense Industries
MarineSciences
Other Local and Chamber ED
Activities
Tourism/ CVB
Education Foundation
Environmental Groups
COG
Base Closure
Higher Ed consortium
Low Country Graduate
Center
BenchmarkCollaborative
Charleston
N. Charleston
World Trade Center
State Legislators
Key Point 4:
We need to connect and align our
resources in the civic space
It’s all about “linking and leveraging”
The “soft stuff” is the hard stuff
The Civic Space
Source: Ed Morrison
Key Point 5: We need to balance open participation and leadership direction...(it’s both “top down”
and “bottom up”)
Leadership directionOpen parti
cipatio
n
Dialogue Decision
Collaboration
Leadership DirectionDecision
Low High
Public ParticipationDialogue
Low
High
Apathy
Street
politics
Effective Strategies
Back room politics
Effective strategies require both
public participation and leadership direction
Source: Ed Morrison
Transparency and trust are strategic
They lead to stronger civic networks
Regions with stronger networks will be more prosperous
They will learn fasterAlign fasterAct faster
Key Point 6:
Our opportunities expand as our
networks develop
Hint: What’s the value of one fax
machine?
Low
Low
High
High
Prosperity
Trust and
collaboration
Key Point 7:
People move in the direction of their
conversations
We can ignite action by mapping our assets
Purposeful conversation is
strategic
Half full
conversations
Half empty
conversations
Years
Prosperity
Index
Consequences of different conversations
about economic development
Today
Source: Ed Morrison
Key Point 8: We strengthen our networks by
translating ideas into action quickly
Source: Ed Morrison
Find
Launch
FocusLearn
Evaluations
Action Plans
Insights
Initiatives
Develop ideas about what we can do together
Choose what we will
do
Identify and align resources to specific initiatives
Execute and measure results
Strategic Doing is a civic discipline to guide innovation
Source: Ed Morrison
Key Point 9: To compete globally, we need to
collaborate regionally...We need regional networks
Key Point 10: To strengthen regional networks, take the
Shanghai perspective
Our View Their View
Returning to Our Key Point 1:
Economic development is all about “open” innovation
Innovation
Productivity
Prosperity
Innovation Productivity Prosperity
Strategic Activities
Strategic Outcomes
Accelerating cycle
BrainpowerInnovation networksQuality, connected placesEffective brandingCollaborative leadership
Source: Ed Morrison
The challenge is to build and support
productive, focused networks
Innovation Productivity Prosperity
Strategic Activities
Strategic Outcomes
Accelerating cycle
BrainpowerInnovation networksQuality, connected placesEffective brandingCollaborative leadership
To innovate on the Second Curve, we need to “connect and develop” and
“link and leverage” open networks
What happened to our grandfather’s economy?
Building Prosperity
Surfing the Second Curve
The New Road Map
Setting Out: The Basics of Strategic Doing
I-Open Results
World classBrainpower
Entrepreneur and
Innovation Networks
Effective Branding
Quality,Connected
Places
Civic Collaboration
Innovative Businesses
Healthy, Creative Places
Healthy, CreativePeople
Dynamic Clusters
Our New Road Map to Regional Prosperity
Collaboration
Source: Ed Morrison
The Road Map incorporates different
economic development perspectives
Region
Cluster
County
Neighborhood
World classBrainpower
Entrepreneur and
Innovation Networks
Effective Branding
Quality,Connected
Places
Civic Collaboration
Innovative Businesses
Healthy, Creative Places
Healthy, CreativePeople
Dynamic Clusters
World classBrainpower
Entrepreneur and
Innovation Networks
Effective Branding
Quality,Connected
Places
Civic Collaboration
Innovative Businesses
Healthy, Creative Places
Healthy, CreativePeople
Dynamic Clusters
This model works on different geographic levels
Source: Ed Morrison
Building healthy, world class brainpower
• New high school reform models
• Manufacturing Boot Camp for High School Graduates
Civic
Collaboration
Brainpower Innovation
Branding
Quality,
Connected
places
Innovative Businesses
He
alt
hy,
Cre
ati
ve
Pe
op
le
Creative places
Dyn
am
ic c
luste
rs
In the 21st century the only competitive advantage available to the South or to any region in the global economy is brainpower.We will be successful only to the extent that we unstintingly cultivate, develop and wisely deploy our intellectual capital. Education is everything.
1998 Commission on the Future of the South
Building innovation and entrepreneurship networks
• Economic gardening
• Entrepreneurship training in every high school
• Business plan competitions linking high schools and colleges
Civic
Collaboration
Brainpower Innovation
Branding
Quality,
Connected
places
Innovative Businesses
He
alt
hy,
Cre
ati
ve
Pe
op
le
Creative places
Dyn
am
ic c
luste
rs
Building quality connected places
• Strengthening downtowns with Main Street programs
• Expanding broadband infrastructure
Civic
Collaboration
Brainpower Innovation
Branding
Quality,
Connected
places
Innovative Businesses
He
alt
hy,
Cre
ati
ve
Pe
op
le
Creative places
Dyn
am
ic c
luste
rs
Effective branding
• Integration of heritage tourism
• Regional food brands
Civic
Collaboration
Brainpower Innovation
Branding
Quality,
Connected
places
Innovative Businesses
He
alt
hy,
Cre
ati
ve
Pe
op
le
Creative places
Dyn
am
ic c
luste
rs
Civic collaborations
• Weekly civic forums to explore opportunities
• Regional forums to check on progress
Civic
Collaboration
Brainpower Innovation
Branding
Quality,
Connected
places
Innovative Businesses
He
alt
hy,
Cre
ati
ve
Pe
op
le
Creative places
Dyn
am
ic c
luste
rs
Region 1
Region 2
Region 3
World classBrainpower
Entrepreneur and
Innovation Networks
Effective Branding
Quality,Connected
Places
Civic Collaboration
Innovative Businesses
Healthy, Creative Places
Healthy, CreativePeople
Dynamic Clusters
What happened to our grandfather’s economy?
Building Prosperity
Wake up to the Second Curve
The New Road Map
Setting Out: The Basics of Strategic Doing
I-Open Results
Find
Launch
FocusLearn
Evaluations
Action Plans
Insights
Initiatives
Develop ideas about what we can do together
Choose what we will
do
Identify and align resources to specific initiatives
Execute and measure results
Strategic Doing is a civic discipline to guide innovation
Source: Ed Morrison
Strategic Doing Requires Simple Rules
• Move fast: Focus on the task at hand: Don’t get hijacked: Limit digressions: No speeches: No whining
• Stop thinking only about today’s issues: Focus on outcomes in 10 years, your legacy, your children, your grandchildren: Get your eyes off the rearview mirror
• Encourage “stretch” thinking: Generate new ideas: Don’t burn ideas: Don’t recycle old opinions
• Push for specifics: Get beyond rhetoric: No bumper sticker thinking
• No blame game: No simplistic solutions: Think in terms of connections, incentives and systems
49
Sample
We use workshops and workshop exercises to move
people around the circle.
We use civic forums to build habits and uncover
connections.
Civic forums provide the venue to define new opportunities
and practice new civic behaviors
Source: Nead Brand Partners, Ed Morrison
Source: Ed Morrison
Regions are moving toward civic processes
that focus on Strategic Doing
What happened to our grandfather’s economy?
Building Prosperity
Wake up to the Second Curve
The New Road Map
Setting Out: The Basics of Strategic Doing
I-Open Results
Developing and deploying new tools
Web 2.0Collaboration
Social NetworkAnalysis
Source: Ed Morrison
Regions are moving toward civic processes
that focus on Strategic Doing
Accelerating regional growth involves
developing open networks
Translate Open Source Economic Development into Regular Civic Forums
Translate Open Source Economic Development into Regular Civic Forums
Translate Open Source Economic Development into Self-Supporting Cluster-Based
Organizations
Translate Open Source Economic Development into Workforce Innovations: Indiana
Zone (consists of)
Anchor2+ Founding Partners
Education/R&D
• Must have initial resources (people & money for county match) to start a zone
• Must provide the leadership and drive in place to make it happen
• Must provide “brainpower” plan and actions to link students to zone businesses
1+ Hot Spot and 1 Business Network
• Where goal-directed collaborations happen
• Location for anchoring physical zone development
Hot Spot(s) Business Network(s)
• For providing supporting services to the zone
PHASE 1• Must map proposed
zone network• Formalize a community
of practice (charter)• Designate 1 or more Hot
Spots• Develop business case
for the zone, including budget and basic incentive pack
• A package of services and incentives unique to each zone that will attract employers and entrepreneurs
• Each “pack” must contain for-profit (through the business network) and government contributions (e.g. county concierge service, tax, permitting, regulatory relief)
Zone Incentive Pack (ZIP)Incentive Pack
PHASE 2• County provides
matching dollars and designates Hot Spots (logo for branding?)
• Growing the community to build out business network
• Formalize incentive pack• Develop physical
development plan
PHASE 3• County provides
matching dollars and designates Zone (logo for branding?)
• Functioning incentive pack, business network, and government services
• Physical development underway
that collaborate to define…
Through which the founding partners define a…
Minimum Requirements
Anchor Partners
agreement tosupport, map and share
develop a brainpower plan and
zone incentive packcreate a business
development network
to support businesses in the hot spot
to support businesses in the hot spot
Anchor Partners designate one or more hot spots
Source: Ed Morrison
Translate Open Source Economic Development into Policy: Cuyahoga Innovation Zones
Translate Open Source Economic Development into Chambers of Commerce: Commerce Lexington and
Regional Strategic Doing
Translate Open Source Economic Development into new Economic Development Organizations:
Hoosiers Helping Hoosiers
Promote Open Source Economic Development Nationally: EDPro Premium Weblog
“I find EDPro to be a great source to learn about issues outside of traditional manufacturing based ED.”
“Your newsletter continues to be our Bible.”
“I forward it as the source of information for anyone new or any long time EDPros. Great information. Keep it up.”
“I enjoy the focus on innovation-led, technology based economic development.”
“I find the Weblog to be an asset as a one stop center for learning about cutting edge innovations in the world of economic development. There is a lot of stuff that can be accessed by the net, but you are not confident in its credibility. The EDPro weblog is a credible source.”
I-Open Web Sitehttp://www.i-open.org
EDPro Webloghttp://edpro.blogspot.com
Purdue Center for Regional Developmenthttp://www.purdue.edu/dp/pcrd/
Thank you!