Articles

3.5 days of professional training at the Edward Lowe Foundation in southwest Michigan Sept 25-28, 009. Contact chrisgibbons@q.com for details and agenda.

Minneapolis and St. Paul are looking at green manufacturing as an opportunity for growth. This report gives you some good background.

Chris Gibbons has been spreading the word. Read more.

So is Burt Chojnowski.  Read more.

The platform under Economic Gardening Economies keeps improving.

The folks at Near Time have added some exciting new soclal networking features. You can learn more about these features here. You can attend a free webinar by registering from the same page.

Note from Chris:

I got to thinking last night that the current fiscal crisis that has the nation in an uproar is a variation of Tragedy of the Commons that many of us learned about in Economics 101.
 
A refresher from Wikipedia:
 
The Tragedy of the Commons is the title of an influential article written by Garrett Hardin, first published in the journal Science in 1968.[1] The article describes a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared resource even where it is clear that it is not in anyone's long term interest for this to happen.

Central to Hardin's article is a metaphor of herders sharing a common parcel of land (the commons) on which they are all entitled to let their cows graze. In Hardin's view it is in each herder’s interest to put as many cows as possible onto the land even if the commons is damaged as a result. The herder receives all the benefits from the additional cows but the damage to the commons is shared by the entire group. If all herders make this individually rational decision, however, the commons is destroyed and all herders suffer.

This one might be called the Irresponsible Forest Owner.  If I live in the forest together with my neighbor and he is very careless about fire – what is my response when he sets fire to his property?  My instincts are “You need to live and learn from your own mistakes.  If your house burns to the ground, perhaps you will be more careful next time.  This is the natural consequence of your actions.”
 
But then I watch the fire getting ready to spread into the rest of the forest including my property and so I reluctantly go to his rescue.  I am angry, I have violated my principles of self responsibility but my only other choice was to watch the entire forest go up in flames.   Grrrrrrrr.
 
I sense the great majority of Americans are against the bail-out.  But I also sense that the great majority of Americans don’t believe that the “fire” has any possibility of spreading to them.
 
So ultimately it gets down to whether a person believes credit will dry up because of the fear created by this sleazy affair.  Let me relate a conversation I had the other day with our local banker who chaired my advisory committee.  He said simply--people are pulling their money out and taking it home.  He is a profitable bank but now he is less liquid and less able to meet his legal requirements.  He doesn’t want to but now he cannot make as many future loans and is starting to call in current loans.  Did the far away fire on Wall Street spread to his property simply through fear?
 
So here’s how it could play out.  The bank’s got less cash in it.  The local business person last week was profitable… but that depended upon the credit of the bank.  He now has less wiggle room and starts to shorten his net terms from 45 to 30 days or less.  He needs the money to make payroll and pay his own expenses.  This then backs into his customers who either buy less or start to stow more money in the safe deposit box.
 
It’s exactly the same issue FDR faced when he said “The only thing we have to fear is fear itself.”
 
And so it spreads…everyone profitable under the existing conditions, no one wanting to dry up credit, but everyone forced to do it to stay alive, simply because of fear.  The individual rational decisions of each business person and customer (regardless of their opinions about the crisis), just keep tripping down the system like falling dominoes.  This is similar to an electrical blackout when a single failure causes each inter-related network to go into a defensive mode to protect itself, further exacerbating the problem down the line.
 
When the entire economy gets turned upside down by fear, its really hard to get it upright again.  Each person in the chain has to again loosen up credit but no one person can do it on his own…otherwise he goes under.  Getting everyone to agree to loosen up at the same time is nearly impossible—it took the overwhelming forced production of WWII to get us free from the Great Depression of 1929-1941.
 
So here’s the big question --  Has the fire spread beyond irresponsible Wall Street? Has fear been turned loose in the land?  A whole bunch of people in Congress are debating that question today.
 
Frustrating when you have to swallow your principles because of systemic characteristics.
 
At least I think that’s the way it works.
 
Chris Gibbons
Littleton, Colorado

In Kokomo, we are developing new strategies for managing the downsizing of Delphi. In mid-August, the company announced a cutback of 600 to 800 salaried positions, 450 of which are scheduled for cuts this year. Many of these salaried staff are highly skilled engineers.

The talent is in demand, but how can we retain as many of these people as possible? We are focusing on engineers with some entrepreneurial interests.

The WIRED focus is on strategies to retain this brainpower and talent in Kokomo.

• We are working on a flow chart  to get a conceptual model of the people facing downsizing;
• We are designing a new initiative that focuses on meeting the challenges of industrial transformation through innovation and entrepreneurship; and
• We are taking a long term view: next generation automotive; emerging energy; nanotech; medical devices; and aerospace.

This initiative will be housed in Inventrek.

We are looking at several components to include, such as Fast Trac from the Kauffman Foundation and Invention to Venture. We are also looking at how Kalamazoo adjusted to the Pfizer downsizing.

Here is an example of the type of companies we are already spinning out:

and

If you are interested in this initiative or think you can help us, please contact Jan Hendrix.

Chris passes on the video from the 2008 RTP Product Design Street Faire held in Morrisville, NC on 13 Sept 2008:

The Milken Institute/Greenstreet Real Estate Partners Best Performing Cities Index ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth.  The components include job, wage and salary and technology growth.  http://bestcities.milkeninstitute.org/

Last spring, The Kauffman Foundation held a panel discussion with a group of EDPros. The topic: What are the important lessons that effective entrepreneurial support organizations follow? The conclusions are not rcomplex...The guidance is more on the level of "Put the shower curtain on the inside of the bath tub."

One dimension that is important: The report recognizes the importance of developing networks to support entrepreneurs. Again, there is nothing startling here. The challenge, of course, is deciding how best to develop these networks quickly and effectively. (Those are some of the tasks we tackle with Open Source Economic Development.)

You can read more about the background on the panel and its deliberations (as well as download the report) from this page:

My colleague at Purdue, Scott Hutcheson, introduced Open Source Economic Development to Purdue's extension offices. This new approach to economic development has strong applications in rural regions.

Here are Scott's slides:

Just learned the University of Oklahoma and Purdue have agreed on a certificate  in Open Source Economic Development. Introducing Economic Gardening will be part of the curriculum. We start next spring!

Rafael Carbonell writes:

As so many of you already know, Chris does such a phenomenal job in
telling a compelling story, providing facts, data and anecdotes to
support it and getting people to buy in to the vision. We were so
fortunate to have him here in Madison yesterday to share his vision
and how-to with many of our regional economic development
professionals, county/city/village/town administrators/clerks, elected
officials and businesses.

We actually made a trek (yes, intentional choice of the word as Trek
Bicycles is the perfect example of a home-grown company right here in
the Madison Region) out to Denver and Littleton back in February 2006
with 50+ business, government, education and non-profit leaders from
our area to learn about their collaborative, regional economic
development/quality of life efforts. Visiting with Chris and his
incredible team helped us to shape our own efforts. With the hundreds
of volunteers, thousands of hours and $2.6 million pledged by 157
investing companies and communities for the first 3 years of
operation, in Feb 2007 we were able to launch Thrive, the regional
economic development enterprise for the eight-county Madison Region in
Wisconsin. And no, "Thrive" is not an acronym; it's an outcome and end
benefit of living and having a business here.

Our vision is to grow this region's economy in ways that preserve and
enhance the quality of life. Our approach incorporates some economic
gardening principles: focus on target industry sectors based on our
assets (agriculture, biotechnology and healthcare), create and grow
your own (not recruitment) and needs-based - ask the companies in the
sectors what they need, identify where there are gaps to address those
needs and develop scalable pilot projects to fill the gaps. We strive
to also enhance the great efforts of our many regional partners
(avoiding duplication/replication - always seek to add value).

Some specific examples: our "Growers to Grocers" project with a longer-
term goal to increase the regional consumption of regionally-produced
foods and our "Boomerang" project to fill hard-to-fill positions
(e.g., seasoned management, niche scientific, physician, pharmacist)
for our biotech companies (over 150 located here! many early-stage)
and healthcare orgs. This one project complements our efforts to also
address the production of talent side. For more info on the Madison
Region, Thrive and our pilot projects, check out www.thrivehere.org -
we're also on twitter and facebook if you'd like to follow us in those
worlds.

There was tremendous buzz among the many attendees yesterday and
energy to explore incorporating even more of the EG strategies and
tools in our region. We’ll be sure to keep you in the loop.

Yes, this started out as a "thanks" to Chris and ended up being an
infomercial on the Madison Region and Thrive. Just wanted to share how
Chris and the EG community have helped to mold our approach to
regional sustainable prosperity.

Rafael

Rafael Carbonell
Executive Vice President
Thrive

www.thrivehere.org