What it really means to be an entrepreneur: it isn’t easy, or safe

Last week was the 5th year anniversary of starting the Wise Economy Workshop– my second foray into entrepreneurship and my first that didn’t stem from a lack of conventional opportunities (meaning, this time I chose this path because I wanted to). Normally, that’s a cause for celebration, or at least a Facebook announcement to solicit some of those “Like” clicks that make you feel good even though you know they don’t mean all that much.

But I didn’t.  I said to myself that I had been too busy, too tired.  Too something.

But the fact of the matter is, at that moment it didn’t feel like much of a thing to celebrate. what success looks like

My business is in the middle of a pivot, a repositioning of what I do and what I offer. I added book publishing and sales, promoted myself as a speaker, built partnerships, tried to figure out ways to make money doing this work that can supplement the fee-for-services consulting that I have done for over 20 years.  From an income perspective, the consulting life can sometimes feel like a particularly nauseating roller coaster, and I wanted to even out some of the plunges.

Pivots are hard. Maybe harder than even a supposed small business economic development expert realized.  And certainly harder than then game plan I laid out a year ago looked like.

Entrepreneurship is hard.  Am I doing the right thing?  Can I trust that potential partner? What do my customers want? Do they know what they really want? (You’re supposed to ask them, but sometimes the answer they give you isn’t clear at all).

Entrepreneurship is scary.  Can I pay that bill?  What happens if I put that one off?  How the hell am I going to pay for (fill in the blank)? What happens if…

Entrepreneurship is tiring.  I finished this, but now that is overdue.  The list never, ever ends.  And the amount to do and the people and time you have almost never match up neatly, whether you’re on your own or managing employees. There is overwhelm and there is famine, and sometimes not much in between.

Entrepreneurship is risky.  What am I giving up? What do I lose, do others lose, if I fail?  We like to believe that anything is possible if you try hard enough.  But a high proportion of small businesses in every field fail to see the five birthday milestone that my business has somehow stumbled across.

And entrepreneurship is lonely.  You have to make the decisions. You have to put on the success mask, even when you might not feel so successful today.  You can’t admit to what’s not working, what you’re scared of, the wolf that seems to pace constantly just outside your well-painted door.  Even to your spouse, your partner, your friend, sometimes. They aren’t in your shoes, and trying to show them the dark places might scare them off.   There’s some evidence of a higher than average rate of depression among tech startup founders.  I would not be surprised if that trend covered a much broader small business population.

I’ve put a lot of thought lately into whether we as communities are really doing the right things to foster small businesses and entrepreneurs–and whether we aren’t unintentionally setting too many of them up for ugly and damaging failures.  Should we tell a poor person, a young person, a retired person that they can be an entrepreneur if they just want to enough, when they may lack personal savings, family support, mentoring, and more?

What do the entrepreneurs that our community really needv– needs that we aren’t seeing because we’re allowing us to be satisfied with feel-good stories, and not truly trying to understand?

How many of our entrepreneurship success stories actually end as a small scale tragedies, with failure lost savings, broken relationships, a deeper slide into the personal and community hopelessness that the “you can do it!!!!” of entrepreneurship was supposed to overcome…

Chances are we stopped looking shortly after the happy ribbon cutting, so we don’t find out.

We probably can’t avoid entrepreneurship failures – it’s part of the deal you accept when you start a business.  My suspicion is that we’re not doing enough.

But not asking the question, not paying attention to the full range of issues that differentiate successes from failures, and insisting that faith in yourself is all you need, you can do it if you just try hard enough…

I am pretty sure now that this is not enough.

If entrepreneurship matters, if healthy small businesses matter, if local ownership and investment matter, if economic opportunity for the historically disadvantaged through self-employment and minority-owned small business matter,  then singing our favorite songs from Sesame Street while tossing around a little money and some how-to-start-a-business classes is not enough. Nowhere near enough.

And that’s not a plea for more money.  The answers to small businesses’  needs are not all found in a pitch prize or a program grant.  And money without a sound underpinning can make the fall only that much harder if and when it comes.

I’m in an ideal situation.  I have a business with low costs, plenty of education, a household such that we will not starve when I have a bad month, good health insurance, a good credit score, friends, family… Not to mention a huge ego and an abnormal level of self-assurance.

And even with all those considerable advantages, I have bad months.  I struggle. I get scared.  I wonder if I made the right choice.  I doubt.

Imagine the situation I would be in if a few of those advantages were missing.

 

Entrepreneurship is also thrilling, exciting, empowering, and deeply self-actualizing.  On a deep, personal, fundamental level, I’ve been happier in the past 5 years than I ever was before that, because I can feel and see my own self moving into my potential, the potential that was there for a long time but got truncated and stuffed behind an employers’ priorities.  In a strange way, that’s a gut-level peacefulness that I didn’t start to realize until I took that brave (and, truthfully, kind of naive) step 5 years ago.  For the people whose guts cry out to be entrepreneurs, that is probably the most powerful intrinsic motivation.  And it’s what keeps you going through the lean times and the doubt and the fear.

We say that we value entrepreneurs and small businesses, that we want them to grow and prosper in our communities, for a bunch of reasons. But we don’t act on it very well.

We have to do that work of supporting entrepreneurship and small businesses  better, much better, if we are going to achieve any of those benefits.

We have to cultivate small business, the way we cultivate anything of value. Today we often do little more than throw some seed in a vacant lot (“you can do it!!!!), pass a watering can over the field once or twice (“here’s a loan!!!”), and then wonder why the garden doesn’t explode with produce.  As anyone who has worked a garden knows, successful cultivating takes much, much more.

I’ve been thinking a lot about what small businesses and entrepreneurs —  like me, I guess — really need if we’re going to get serious about growing that increasingly important small business sector of our local economies– you know, the ones that make most of the new jobs and all that.  But I’ve been putting off writing that down until I got some other projects out of the way.

Maybe I need to move that up the list. For myself as much as anyone else.

Building a startup ecosystem: my interview with Mike McGee of Starter League

One of the topics that I continue to study closely is the question of how startup ecosystems and other kinds of small business communities can best be supported, encouraged, fed and enabled to grow into their potential.  I did an interview a couple months back with Mike McGee, a central part of the Chicago startup ecosystem and one of the founders of Starter League, which teaches people from all backgrounds how to code.

 

As you’ll see from this interview, the ability to create web applications isn’t just relevant to “tech dudes” — increasingly, the ability to at least understand how code languages work and how to create things online becomes central to every kind of small business, even in fields where we don’t normally think of coding as a necessary skill.  Mike also gives us some insight here into how the different elements of the startup community in that city relate to each other — and it’s that interrelationship, as much as anything, that has a lot to do with why businesses like Starter League and others are growing in that city.

You can read the full interview at Creating Genius, a lovely publication that focuses on sharing entrepreneur’s stories and to which I have become an occasional contributor.  Here’s a selection from it:

Della:  Who takes your classes? What types of people end up getting involved with Starter League?

code classroom
Inside Starter League. From CreatingGenius Magazine

Mike:  It’s a very diverse group in terms of age, professional background, educational level, city, state, country, etc. The common thread is that our students typically are those who want to transform from consumer to creator.

The common thread is that our students typically are those who want to transform from consumer to creator.

They’ve worked in other industries and they’ve gone to school for another focus entirely, whether it’s history, education, law, retail, real estate. Every professional industry you can imagine. They’ve experienced problems in those areas and they’ve talked with their family and friends about them.

They often say things like, “Oh, it’d be great if I could solve this problem”, but it stops right there, because they don’t have the skills necessary to solve those problems with technology. It’s been festering and boiling inside of them. It’s like “If I could only do this…or if I only had these skills, I could build this app.”

That’s the thread that ties all of our students and graduates together, is that they are just sick of using someone else’s solution, or they’re sick of not having a problem solved. They want to take matters into their own hands and build a solution for it, or just to change their career.

Mike rocks, and you should definitely read the whole interview.  My thanks again to Mike for spending the time with me, and to Lee Constantine, CreatingGenius’s publisher.

 

Cultivating the Small Business Ecosystem (part 2)

To continue where we left off last week, talking about small business ecosystems:

When you grow a garden, you don’t build the plants out of rocks and plastic.  You create the environment where those tiny, threadlike little seedlings have the best chance you can give them of growing into strong and resilient plants.  Some plants grow faster than others, some are inherently hardier.    You can’t do it for them.  Your job is to give them the best chance you can give them to grow. 

Just like gardeners work at giving their plants the best odds to thrive, we who care about communities can build an environment where our small businesses have the best chances to grow.

Fine.  So you can’t build seedlings out of rocks and plastic.  So what the heck are we supposed to do?

If you want to build a healthy small business ecosystem in your community, you have to

children at white house working on garden
www.whitehouse,gov

put in a significant amount of work ahead of time, and maintain diligent attention once the seedlings start coming out of the ground.

Okaaay…and the prep work looks like…what?

  • Helping potential entrepreneurs select the right seeds.  One of those capacity issues we talked about the other day has to do with market knowledge.  Entrepreneurs tend to start businesses on a gut sense of an opportunity – or on a “gee, it would be cool to do that” sort of model.  A lot of time that works out just fine, but there’s also a big risk of wrong moves or mistaken choices that can cut into the entrepreneurs’ reserves.  As we discussed, one of the biggest differences between small businesses and larger businesses is capacity, whether that’s cash reserves, hours in a day or knowledge.  Missteps in the beginning can set a business up for failure, and anything that wastes capacity cuts away at a very thin layer of reserves.

 

Communities can help select the right seeds by sharing real-world information about their assets and their opportunities.  What’s our economic makeup?  Where are we over-supplied or undersupplied?  What are the hidden, maybe small-scale opportunities that result from population subsets or unusual regional destinations that out-of-towners might not know about? This information isn’t hard to come by, if you know where to look.  But it can make all the difference between a hometown success story and a could-have-been-if-only.

 

  • Preparing the soil.  If you are starting a garden on a vacant lot, you don’t just throw seeds down and hope for the best.  You have to make sure that the dirt can nourish the plants you’re planning to grow, and of course all dirt is certainly not created equal.  What you need to add or do depends on what you are planning to grow.  Peat moss?  Mulch?  Compost?  Fertilizer?  Lime?  One seed needs one, one seed needs another.

 

Some business types benefit from opportunities to build strong local networks, while others need international connections.  Sometimes they need help with inventory management, human relations issues, finding funding to grow into their potential.  None of these require a degree in rocket science, but again, remember capacity: if I am an overwhelmed small business owner, chances are I will stumble along by the seat of my pants….until the crisis that has been building up through my inability to manage that issue effectively takes front and center.  And by then, it may be too late.   If we want to build a small business ecosystem, one of the easiest and simplest things we can do it to make this assistance easily available.  Chances are someone somewhere is providing the information your local businesss need… they just aren’t aware of it or able to get it with what little energy they have to throw at it.  Putting that within reach isn’t hard…but it takes consistent effort and lots of repetition.  Just like with fertilizing, once is never enough.

 

  • Monitoring the ecosystem’s development.  Biologists don’t just look at an ecosystem once – they identify key measurable indicators, and they check them regularly.  What’s the water ph?  How many songbirds did we count this year?  Are we above or below the average for rainfall?  How else are you going to understand where things are going – or what we need to change in order to nudge trends in a better direction? 

 

We do a particularly lousy job of monitoring our local small business ecosystems.  We tend to assume that everything is fine based on a few overly-simplistic indicators, like the number of new businesses, without digging deeper into the data to understand whether those factors are actually signs of growth or decline.  An increase in the number of birds might look like a good sign to a biologist, but if most of the growth is invasive species who compete with the natives, that numerical increase might not be such a good thing.  Similarly, adding jobs that pay minimum wage or require only minimal skills could be less something to crow about than something to take as a warning signal.

 

None of these tasks are hard, and none of them require skills or information that we don’t already have or can borrow from other professions.  What we do need to bring to it is the diligence and the long-term perspective to cultivate our small business ecosystems.  It won’t happen overnight.

 

 

 

salt, pig, chicken something…re-learning how to grow a community.

This post is adapted from one titled “Salt of the station street pig and chicken” that originally appeared on the blog of a dear friend and a woman I admire.   Rebecca Maclean is both the blogger behind Food Me Once, and also one of the editors and primary authors of the Digging Deep Campaign.  Becky and I don’t always see eye to eye, but she understands successful urban environments as both a planner and as a person who has made the dedicated choice to live in the city, small kids and husband in tow.  She’s quite an asset to Pittsburgh.  I hope they’re starting to get that.

When I tweaked this entry, I did so to highlight Becky’s message about something that can be tough for economic developers and planners to hear: the places that do best are often the places that do so despite us.  There’s something that happens in successful neighborhoods that a zoning code, an incentive package, or a nice maps with lots of colors…doesn’t.  The critical challenge to our professions in this era is to drop our top-down assumptions and get deep into the understanding of how exactly these places thrive — and how, tactically and incrementally, we can help make that happen.

My distaste for the short-man-in-the-long-cape approach is pretty well known by now, but that’s not the point here.  The point is that we need to start looking closely at case studies like Kevin Sousa’s in Pittsburgh: put some effort into taking them apart and understanding the moving parts.  We need to analyze the details and the myriad of factors that go into these kind of places, and figure out how to support them —  more tactically, more delicately .

We need to regard planning for the revitalization of communities as a social science, not a mechanical, this-goes-in-one-end-and-that-comes-out-the-other process.  There are no magic levers, no simple buttons that we can push to make it go.  Long-term, resilient, successful places need to grow, with all the messy complexity that comes with that.  And if communities seeking revitalization don’t need a Grand Design, they most certainly need a good gardener.  One that doesn’t squash or over-water the seedlings.

That is our job.  Here’s Becky:

Gentrification. Revitalization. Stabilization. All words that come to mind when you’re thinking about what to do, exactly, with declining urban neighborhoods. But at the core of that “what to do” lies a mental barrier that urban planners (myself included) often fail to address.

At the end of the day, we can’t “do” anything with property that we don’t own – at least not easily or without great cost (financial and otherwise) to the community. This is why many of the best-loved neighborhoods, those that have revitalized and stabilized, are organic ones – places that developed, regrew and thrived for reasons that no planner ever planned.  Perhaps they were steered or supported by community development corporations, neighborhood plans, or local planning departments, but, at their core, these places have been driven forward by people on the ground who were willing to take risks, pour their money (and those of their investors) into a place, make connections, and hope it sticks.

Here in Pittsburgh, I’ve had a soft spot in my heart for the East Liberty neighborhood for years. Once the third largest shopping district in Pennsylvania, East Liberty has great history, classic architectural gems, a decades-long period of decline, and some fantastically awful centralized planning decisions. Due to hard work and boots on the ground from the neighborhood Community Development Corporation and other stakeholders, this area is hopping once again. The smaller spaces in the neighborhood have for the most part been slowly rehabbed and now include a mix of established and relatively new businesses.

 

Here’s the sticky part: who’s the most important stakeholder in this process? The neighborhood resident who stuck it out here through the decline and rebirth? The chamber of commerce? The CDC, which busted its butt trying to get vacant buildings filled with a sustainable mix of tenants, only to get flack because they’re the ‘wrong kind’?

The mix is critical to success, but everyone is always critical of the mix.

I’ve been thinking about this a lot lately as I frequent businesses in East Liberty. So many are food-based  – two Ethiopian restaurants, a Jamaican place, the cupcake bakery, the pizza shops, the Parisian bistro, the hip local dive bar, the waffle-centered performance art space, the conflict kitchen, the barbeque place, the hot dog shop, the burger bar, the modern American restaurant. As I write this list off the top of my head, I’m struck by the fact that most of these businesses are relatively new. One of the pizza shops is a long-timer; the rest have been operating a decade or less. And although most business owners are happy with any patrons, for the most part the clientele seems to be young, non-minority, hip, with disposable income. I think it’s safe to say that the immediate neighborhood residents would not fit that description. So East Liberty is back to being a destination – which, to be fair, is its historical role.

 

A conversation with a fellow local food blogger raised a tough question: what level of new investment in a neighborhood is appropriate for someone to bring into the community from outside? Does that level change if the business owners are from the neighborhood, the city, the region – or if they’re a complete outsider? What if they bring with them a certain caché, a cult of personality, a track record for excellence in their world?

 

Local foodies know by now that I’m talking about Kevin Sousa and his East End restaurantSalt of the Earth logo triumvirate (two of which are in East Liberty, and one in the urban core of the neighborhood). His first restaurant, Salt of the Earth in nearby Garfield, earned major accolades from the broader culinary community (Food and Wine and the James Beard Foundation, among others) and has been lauded locally. Rehabbing that building was seen as a Good Thing too, turning a historic Harley Davidson dealership from the 1920s into a hot spot on a stretch of Penn Avenue that sorely needed some eyes on the street at night.  He’s followed that up with two restaurants opening almost simultaneously: Station Street Hot Dog Shop, and Union Pig & Chicken.  And the grumbling has grown along with his foodie empire.

 

I just don’t get it. The hot dog shop had been vacant for over a year, and is carrying on the tradition of a hot dog shop in that vicinity (with that name) since 1915. The barbeque place bore the brunt of the complaints, both because people are very opinionated about their barbeque and because a white dude from McKees Rocks is cooking barbeque in the ‘hood (haven’t heard it in quite those terms, but that seems to be the general sentiment).

 

Food preferences aside (though I admit to being an avid fan of Kevin’s cooking), I keep wanting to ask the naysayers these questions:

  • What would you have put in place of those restaurants?  Both storefronts were vacant. Both places are continuing the traditions of their locations.  While neither place is the cheapest place I can get a hot dog or some fried chicken, they’re not overpriced.   If $22 is too much to pay for a really good rack of ribs, why would you willingly pay $20.99 at a chain restaurant for a mediocre rack?

 

  • If you don’t want a Local Boy Done Good to bring restaurants to your vacant storefronts, where should he go? He’s a successful businessman with a solid following who chose to try new things in a neighborhood that needed it, and said they wanted it (one of the goals in the neighborhood plan is to become a dining destination, after all). He could have rested on his laurels and replicated his brand in the suburbs, and he didn’t.

Me, I’m happy to support a local businessman who serves food that I feel comfortable feeding to my kids in an area of the city that I love. Obviously, a lot of other people feel that way too.

This debate isn’t unique to East Liberty, or Pittsburgh.  I lived in another city neighborhood a decade ago whose parochial blue hairs tried to run the Hispanic businesses off the main street – apparently they liked vacant storefronts more. But if you alienate the small business owner, who is supposedly the lifeblood of the American economy, sooner or later you’ll end up in a chain store (or vacant window) wasteland. That’s not what I’m interested in, at all.

Thanks, Becky.  Take me to lunch the next time I’m in town, OK?

The Wise Economy Manifesto, Version 2.0

Over two years ago I wrote down something that I called the Wise Economy Manifesto (first draft).  The purpose of that statement was to try to capture the sea change that I think we need to make with regard to how we manage the world of local government.  I have worked with communities for about 20 years, and I’ve stood in the midst of places that were thriving and places that were collapsing.  From what I saw and what I know about economies, planning, organizations and psychology, I ended up joining the small but growing army of folks advocating for a a deep-seated reset to how we do the important work we do – convinced that the needs are bigger than a new program or a new method.  And because my experience has crossed many professional boundaries, I was inclined to seek a holistic approach – a sort of universal theory that takes the work of many who strive to make communities better and sets their efforts in a deep-structure context.

So I wrote a thing called the Wise Economy Manifesto, and in it I tried to encapsulate everything I was thinking.  And I think it did that.  But as I have been living with it, and speaking and writing from it over the last couple of years, I have been coming to the conclusion that I made that first attempt more complicated and more fragmentary than it needed to be.  So I’ve taken another whack at it, and I’d be grateful for your feedback.  In the coming months, I plan to be developing some tools to help you put this into action, so the secondary question I have for you is, what can I provide to help you get there?

 

Here is the Wise Economy Manifesto (version 2.0):

  • Communities are human ecosystems.  Everything we do, whether a land use plan or an economic development incentive, or any other public policy, isn’t going to stay in the silo where we put it.  What we do will have wide and deep, and often unintended, repercussions, and we need to change how we work and think to anticipate those as best we can.

 

  • That which makes you unique makes you valuable.   Communities cannot offer everything to everyone, and they shouldn’t try to.  The great challenge of planning and economic development is to uncover, brush off, and illuminate those characteristics that make a place deeply, meaningfully unique.  There is little value in being a commodity, but much opportunity in a well-defined niche.

 

  • We must focus on cultivating our native economic species.  The thing that grows naturally where you are can, with a little help and protection, provide more long-term benefit (and fewer of those unintended repercussions), that the exotics that we try to transplant at great cost.  In this era, the chase after the flashy, the big, the long shot, is too costly and too risky to deserve the lion’s share of our attention.

 

  • Beware the magic pill.  We all want easy answers; we all want there to be a simple solution.  There isn’t one.  Get used to it, and commit yourself to incremental, complex, messy change.

 

  • Crowdsourced wisdom is the best way to find a real solution.  We have tough challenges in front of us, and we need all the bright ideas that we can get.  But just like water needs to be guided into a channel before it can drive a turbine, we have to take the lead in guiding our community’s wisdom into fruitful efforts.  An open mic in the middle of the room ain’t gonna cut it.

 

  • We whose have the job of helping communities work better have to be brave.  We have to reconnect to the reasons why we got into this, before the rules and bureaucracy and politics tried to beat it out of us.   Whether we want to or not, we are going to be on the front line of the fight for new solutions, and we are going to be useless if we are just punching the clock.  We have to critically re-assess our professions and organizations and communities, and find the fortitude to break through the walls that are keeping our communities from being successful.  We cannot be foolhardy, and we must admit that we don’t have all the answers.  But we have to be brave enough to do our job, and lead the expedition.

 

I’d be grateful to know what you think, if I am missing anything, etc.  Thanks.

Economic development, big game trophies and missing workers

This post is edited from a musing written by my good friend Bill Lutz, who has show up in these pages before here and here.   I was deeply impressed by the way Bill captured the essence of the conflict that faces economic development today — and set it in the framework of ongoing generational change, which is an issue close to his heart (and mine), and one that I hadn’t connected the way he has.

We all need to have our eyes wide open about how the world is changing around us, especially if we are old enough to have gotten comfortable with the status quo.  As a Gen Xer, I find myself straddling two increasingly divergent views of the world — views that are firmly ensconces among people ten years older, and ten years younger, than I am.  In my professional life, I don’t see this division as pronounced anywhere as it is in the world of economic development.  Even with all the talk about economic gardening and the

fissure in the ground
fissures: they grow under stress. www.azwater.gov

importance of recruitment and retention, too often the actions of professionals in the field, on the ground, reflect old and unspoken assumptions about what a community needs for its economy.  I wrote last week about how deep and meaningful change requires that we break through our old paradigms, and while that’s never easy, the economic development field seems to be having a particularly hard time of it.

I believe that we as a nation and as communities are in the midst of a zeitgeist shift, one that I continue to hope makes a Wise Economy more and more achievable.  But to make that shift, we have to think ahead and have the wisdom, and the bravery, to make it happen.

For another interesting read on the generational and economic sea changes we’re living throughfissure, check out Fast Company’s recent series on Generation Flux: http://www.fastcompany.com/magazine/162/generation-flux-future-of-business

___

Last month, Tipp City collected a major win in the game of economic development.  Abbott Labs, the makers of nutritional supplements, decided to build a new production plant for one of their products in this small community.  The project will lead to the building of a new $270 million facility and create in excess of 200 jobs.  These are substantial and impressive figures.

Each week, I have the chance to drive by the new home of Abbott Labs on my way to church and each week there is more and more progress on this massively large building.  But as I drive by the building, I can’t help but think if this facility is creating the jobs our future employees will want.  Yet again, is any project that promises hundreds of jobs creating the jobs future employees will want?  I know it’s almost sacrilegious to ask such questions in the heartland of American manufacturing, but these are important questions to ask.

Ask anyone currently working with those in manufacturing and it is not uncommon to hear a refrain that there are not enough people filling the jobs that are out there.  It sounds counter intuitive given the relatively high unemployment rates that currently exist.  Looking at those that are younger, the unemployment rates are even higher.

The big question begs to be asked: why can’t these businesses find people to do these jobs, even when the unemployment rate is so high?  Many postulate the work ethic of younger workers isn’t where it should be.  Some business executives say when their new employees clock in for their first day of work at 8:00 a.m. some leave at lunch and never come back.

Personally, I think it’s too convenient to blame this generation’s perceived lack of work ethic.  I am convinced that each generation has the same proportion of unmotivated, lazy and unproductive people.  I am sure my grandfather’s generation thought my father’s generation was a bunch of slack-jawed hippies that couldn’t carry their own weight.

What I am convinced is that the jobs we are creating aren’t the types of jobs the next generation wants or needs.

If you read a broad cross-section of the regional and national press about economic development issues, two themes  emerge pretty consistently these days:

#1:  Economic developers all across the country are tripping over themselves to get big businesses to come to town — and often throwing a lot of money at them in the hopes that this will make something happen.

#2: Young job seekers aren’t interested in working for big corporate conglomerates. There’s growing evidence, and there has been for a decade or more, that post-Boomer workers are looking for something very different from the Organization Man model that most corporations still hew to in theory, even if the promises of that employment are no longer reliable.

Take those two statements together, and you get a very different sense of where the problem lies.

The post-Boomer generations of worker grew up in turbulent times.  More than likely they saw their parents, or other older adults they knew lose their jobs during the corporate restructuring that was all the rage in the 1980s.  Those folks had been told that theirs were supposed to be career jobs, but it didn’t turn out that way.

In part due to the lack of these jobs, many in this generation grew up with their mothers going to work leading to another generational phenomenon: the latchkey kid.  These were the kids that came home from school to an empty house and it was in these few hours a day that these kids learned to be self-reliant.

So can we surprised when we see the most talented of this generation of self-reliant individuals reject the job offers of big business when they come to town, or don’t last when they discover what a mismatch there is between their guts and these places?

Post-Boomer workers demand to be flexible and agile.  They want to continually build new skills and new abilities, and if necessary,  they are willing to do it on their own.  These workers aren’t interested in signing up for a job, only to be pigeon-holed in a dead end with the ever-present risk of a pink slip handing over their head.

The fact of the matter is that economic developers are, by and large, playing a game that hasn’t changed much in the last 30 years.  Attraction and recruitment is still a big part of the economic development game, the major effort still goes into chasing the big game trophy, and communities keep getting stuck in the slow dance of big incentives and slick marketing.

Most importantly, this approach to economic development is often failing to help answer a bigger question:  Are the communities we live in attracting the jobs and careers we need to sustain our community’s  future?

 

Annotated presentation, Economic Development /Business Enhancement/Economic Restructuring 101, Heritage Ohio 2012 conference

The file at the link below is an annotated version of a presentation that Craig Gossman of MSI |KKG (newly re-branded as MKSK Studios) and I gave at the Heritage Ohio conference earlier this month in Toledo.  Craig and I were asked to work from a standard presentation prepared by Heritage Ohio staff, but for the sake of presentation clarity we felt that we needed to make some tweaks.  As I usually try to do with presentations, I’ve created an annotated version of what Craig and I said… or should have said, or would have said if we’d been smart enough to think about it at the time.

The element of the Main Street Approach (c) that we were presenting on has been a challenge for Main Streets from the beginning and is currently undergoing a sort of rethinking/rebranding among specialists within and without Main Street nationwide.  For those of you who are not steeped in this strategy for downtown revitalization, the basic premise is to create a volunteer-driven organization, supported by professional staff, that works to revitalize a traditional business district through a comprehensive approach designed to address all of the elements of a healthy downtown.  Typical standing committees include Organization, Promotions, Design and Economic Restructuring.

In the past, Main Street Economic Restructuring committees were typically charged with creating a market analysis (there’s a fun task to try to get your volunteers on board with!) and recruiting new businesses to fill vacancies.  It’s become clear that supporting the economic function of traditional business districts may require a different approach.  What that approach should be, however, is still kind of up in the air.  Some people feel that the focus should be on helping downtown businesses operate more effectively, playing a role similar to what economic developers know as Business Recruitment and Expansion (BRE).  Another group of people feel that strategic recruitment of businesses to fill vacancies should be the primary goal, while others feel that the complexities of urban real estate development are such that the committee should be focused more directly on helping make real estate deals happen.  Heritage Ohio, for the moment, is trying to address all three angles, as you can tell from this presentation.  But you can also tell by the number of slides in each section where the organization is currently putting its emphasis.

My concern in giving this presentation is that I think that addressing all three of these elements well would be beyond the scope of most organizations with a full complement of professional staff, let alone an organization that intends to make extensive use of volunteers.  And I don’t know which of these approaches should be subbed in for the old Economic Restructuring in the official canon, or if any of them should be.  My suspicion at this point is that each of these may be a necessary emphasis in different communities and at different times in their development.  And that implies that this part of the organization would have to have a level of fluidity, an ability to pivot, that we don’t expect from other parts of a Main Street organization –and seldom truly expect from most economic development agencies.

This is why I have placed so much emphasis on developing a plan of action for this part of the organization.  A community that is serious about fostering economic vitality in its downtown is going to have to look very closely and unblinkingly at its challenges and opportunities — both the ones that show up in the convention bureau’s publicity and the developer’s sales pitches, and the ones that take more work to uncover.    The bigger challenge, though, will be the actual planning part — understanding the extent of the organization’s capacity, setting priorities and creating a step-by-step plan of action that gives them a fighting chance to actually make a difference.  That’s not easy, and because it’s not easy, it’s often neglected.  But making a sound and useful plan has never been more important.

As always, if you have questions or comments, please see below.  If it’s something more relevant to Craig than to myself, I’ll pass it along and post his response here as well.

With that loooong preamble, here you go.  Enjoy.

BE 2012 Rucker Gossman version annotated final 05 10 12

 

Links from Northeast Ohio American Planning Association workshop, November 18, 2011

For those of you who attended my session on public participation at the workshop,  I promised to post the links to the various online public participation and planning tools that I mentioned in the presentation.  So, in order of presentation, here they are:

 

Mindmixer.  This is the site that is designed to facilitate broad public idea-generation and idea-vetting, with a little game theory thrown in.  The main web site is here and the example community is here.

EngagingPlans.  This is the site that is strong on project management and public feedback, including the public into the process in a variety of ways.  Here is the explanation of the approach and here is the sample community I showed.

Delib.   This is the app -based tool from the UK, which I don’t know much about yet (but I am hoping to correct that soon).  Here’s their site.

Revitaliz.  This is the platform that is set up to enable crowdsourced funding.  It’s kind of hard to get a feel from the web site as to how exactly it works, but it appears to be very robust.

 

Placepulse: This is the developing database of how thousands of people across the world respond to a variety of photos of places.  It’s kind of like a mass visual preference survey.  This isn’t so much a direct public participation tool as it is a way to supplement or test the results you get from a public participation initiative.  Plus, it’s awesome.

SizeUp: this is a new tools from the wizards at GIS Planning, and its connection to public participation is a little less direct, but still important.  First, it’s a tool that can be used on the fly to test statements or assumptions about economic and business issues, so it’s a means of injecting more rational fact into public discussions.  Second, it’s an empowerer — with a little training, community members can use it to fact-check themselves.

EMSI: in some respects, this is the Godzilla version of SizeUp.  It requires a paid membership, but in exchange for that you get incredibly robust information sets and analysis tools on everything from business types to workforce strengths.  Want to do your own economic impact studies on demand?  For less than the cost of most consultants, here ya go.

That should keep you busy for a while!

As I mentioned during the session, I am continually finding new tools like these, so keep an eye out for updates.  I will start publishing a quarterly white paper soon….as soon as I finish goofing around online…..

Slides from APA Ohio, National Trust and Downtown Colorado presentations (also known as the Dry Throat Tour)

 For those of you that attended sessions with me at conferences in September or October, I am glad to say that I finally got the slides posted to Slideshare so that you can download them whenever you want.  As a gentle reminder, I am available for your conference, workshop, training, Little League 7th inning stretch…. maybe I should reconsider that last one….

 

Here’s the link to the session I did with Peter Mallow on economic evaluation methods.  I owe you all some examples, I am still trying to round up some good ones.  We also do have video of that session, which needs some editing… we’ll get that posted as soon as I figure it out.  🙂

http://www.slideshare.net/drucker/economic-evaluation-apa-oh-v-22

 Here’s the session with Mark Barbash and Jim Kinnett on National Trends in Economic Development.  I also need to find some illustrative examples of a couple of things from that session, which I will work on.  We do have video of most of that session, but it’s mostly the backs of people’s heads, which is what happens when you have three vertically-challenged presenters.   As an FYI, this session for us was a proof of concept for a broader training program that we are developing, so if you think some help with Economic Development for Non Economic Developers might be something your organization would find useful, please let me know.   

http://www.slideshare.net/drucker/national-trends-and-best-practices-in-local-economic-draft-41#moreList

 Here’s the session on Public Participation.  I don’t have video or audio of this session, but I am doing a reprise at the Northeast Ohio Planning and Zoning Workshop on November 18, so we’ll try to rectify that.  Stay tuned. 

http://www.slideshare.net/drucker/public-participation-oh-apa-10-20-11

After my stint in Dayton, I made a mad dash to Buffalo to present on You Can Do the Math: methods for demonstrating the economic benefits of historic preservation policies.  Here are those slides — both the slides and an audio recording will be available from the Trust.  I’ll post the links here as soon as I get them. 

http://www.slideshare.net/drucker/you-can-do-the-math-nthp-2011

 Finally, I realized that I never posted the slides from the Downtown Colorado Inc. plenary session I did in September in lovely Durango.  This presentation is a macro-scale overview of what I am thinking about lately, and what I think we need to do to reboot planning and economic development so that our communities are vibrant and resilient for the long term.  Again, I am  available for your annual conference, initiative kickoff or five year old’s birthday party.  Scary clowns and balloons not included. 

http://www.slideshare.net/drucker/an-invitation-to-build-a-wise-economy-rucker-doi 

If anything does not work, or if you have any questions, please feel free to ping me.  And remember, I supply my own batting helmet.

So how do we start building Wise Economies? Grow Your Native Species

Q: What is this  flower?

A: An apple blossom.  It’s also the state flower of Michigan.

 

Q:  What’s this second flower?

A: A Hibiscus.  It’s also the state flower of Hawaii

 

Have you ever tried to grow these things in the Midwest?  I have. When I lived in Green Bay, Wisconsin (about the same latitude as Traverse City, Michigan), I had one scraggly apple tree in my backyard that an old-timer estimated to be about 50 years old.  The thing was uuuuugly… gnarled branches, sort of bent over to one side, very unsymmetrical.  And we did nothing to take care of it.  But every spring, that tree put out a drift of blossoms over its scraggly branches, and every fall it produced apples…which tasted awful, but they were apples, nonetheless.  On a recent return visit, we drove by the old house and peeked in the backyard, and there was that same old ugly tree, laden down with fruit.

I don’t have an apple tree when I live today in Cincinnati, but I do have a hibiscus tree.  It’s actually our second hibiscus– my husband keeps bought a second after the first one finally limped to its demise.   We have to keep it in a pot because it can’t survive the winters, we have to stake it up in the pot because it doesn’t have a deep enough root system to keep it upright in even a little bit of wind when we do put it outside in the summer.  It goes through random periods where it drops leaves all over the place, and when it’s inside it attracts swarms of little white bugs.  It’s got lovely blossoms, when it blossoms, but the rest of the time it’s a pain in the neck.

To grow an apple tree in this region takes very little effort.  To grow a hibiscus in this region takes a huge amount of effort.  If the goal of your gardening is to produce flowers (ignoring the fruit for a moment), growing an apple tree is going to be a more efficient, less labor-intensive way to meet that goal where I live than growing a hibiscus.  They don’t look the same, and the one that isn’t from here is always going to look more exotic and enticing.  But they are both flowers, and one produces the results we want in this location much more easily than the other.

Conventional approaches to economic development put a huge amount of emphasis on trying to grow exotics in places where they do not naturally grow.  We send economic development professionals on trade missions all over the world, we bleed ourselves to be able to announce that we have the lowest tax rates, and we pour millions of dollars into incentives to recruit businesses – or retain them after they are here.  But unless a business needs what we uniquely have to offer, we will never have confidence that they won’t just pull up and move to the next cheaper place when this load of tax incentives run out.  Recent stories about even as midwestern a stalwart as Sears are driving that point home.

There are two truths of economic development that we don’t often talk about.    The first is that very, very, very few businesses relocate in a year, and fewer now than in years past.  All of the chasing after site selectors that economic developers often do, all of the money and effort and travel spent trying to land that big businesses, is going after  a big payoff with extremely long odds.  Much of that money will see little, if any, return.  To a great extent, big business recruitment is a bet on the Powerball: fantastic if you hit it, but hardly what you want as your retirement savings strategy.

The other truth of the matter is that most businesses do not primarily choose a location on the basis of tax incentives.  When most businesses do go in search of a new location, they choose based on their business’s needs – regional location, workforce skills, access to transportation, ability to recruit key talent, etc.  They will ask for tax incentives because that’s part of the dance, and they will threaten to go somewhere else that has better tax breaks because it’s in their best interest to get a little more if they can.  But communities seldom win business that they would not otherwise get through tax breaks. Most business’s needs are much more complex than that.

Given that betting on the exotic requires so much additional effort for such long odds, I argue that the communities and regions that focus on cultivating and fertilizing the businesses and economic opportunities that grow naturally in their area have a much better chance of long-term economic health and resilience.  Your native businesses are the ones that are adapted to your social, cultural and economic environment from the start, and they are the ones who are in the best position to anticipate and adapt to changes in the world surrounding them.  They may be humble, even boring, compared to the unusual and flashy from Somewhere Else, but they are your safest bet for long-term growth.

What’s so great about local businesses?  This topic gets a lot of play lately, with debates over which types of small businesses are creating the most jobs and how to get them growing .   All important , but let me give you a different argument in their favor, and a long-term Wise Economy-type perspective.

Once upon a time, nearly 200 years ago, a couple of men started making candles in a little shop in Cincinnati.   Places with lots of pigs being good places to get cheap candle-making equipment, so this was a business that was a natural outgrowth of the primary industry in the town known as Porkopolis.   The company later added soap (also made from pork by-products), and gradually, gradually expanded production – employing more people, building bigger buildings, and adding additional products.  Today, that company is one of the largest in the world, and their products include Tide, Crest, Pampers and Swiffer.  And despite the fact that Procter & Gamble does not have factories in Cincinnati anymore, they are one of the largest employers, a major local taxpayer and a key funder of everything from youth summer programs to the United Way and the Cincinnati Symphony Orchestra.

P&G started in Cincinnati because of what Cincinnati uniquely had to offer at the time, and it stayed as it grew because of the business and personal connections.  Today it is helping create a new economy in the region – Greater Cincinnati was recently named a center of Consumer Marketing expertise, which includes disciplines ranging from package design to surveying and social media.

Look at the stories of the Fortune 500 companies, and you’ll find lots of stories that follow a similar outline.  Very few corporate headquarters relocate out of their home region (unless they merge or get bought by someone else).  If you want to create a stable long-term economy, if you want to build an orchard that will last,  you need to be growing your P&Gs today.

So how do we start building Wise Economies? Economies = Communities =Ecosystems

Based on my house, I think I live in the "litter" zone.

First, we need to change how we think about communities, businesses, organizations and governments.  We need to understand that economic vitality depends on the health of a community, and that a community is not a set of separate, unrelated systems – a business district, a school system, a park system, a street system — but an ecosystem.  How our businesses do, what happens to our downtowns, what our parks look like, where we spend our money, how we talk about our communities, doesn’t just affect that one thing – it affects everything.  We create a lot of those unintended consequences for our communities simply by not thinking beyond our own pet interests or our own department walls.

Take, for example, the profession of economic development.  Economic Development isn’t _really_ about just increasing the number of businesses.  We all know that.  The reason why communities do economic development, why they invest time and resources in it, is to make sure that the local economy has what it needs and is doing what it needs to be doing to support the health of the overall system.  The purpose of economic development, at its core, is to help the community become stronger by making sure that the economic part of the ecosystem is doing its part well.      

Here’s the hard truth, though: it’s a whole lot easier to define your economic development job, and measure your achievements, if you cast it in terms of “winning new businesses” instead of “facilitating the health of the local economy.”  It’s a lot easier to count new jobs, or new employers, or hits on the web site, or hands shaken at the International Shopping Centers Conference, than it is to evaluate whether you are actually creating a healthier local economy.  That is, unless you have a clear plan and are measuring the right kinds of improvements.  A clear plan and accurate measurements can be done, but they take more honest thought and stronger leadership than just chasing anything that moves.  So more often than not, we count the web site hits and handshakes, shoot what flies and claim what falls, and assume (or take on faith) that those activities are somehow supporting the community’s ecosystem.  Economic developers are starting to figure out that “quality of life” has something important to do with the ability to grow a local economy, but there’s still a good deal of scrabbling in the dark to figure out how to tie those elements together.  And until that understanding of the interdependence of the economy on the rest of the community ecosystem takes root, it’s going to be far too easy to default to old measures that often hide whether our efforts are helping the larger community or hurting it. 

I have been picking on economic developers, but the truth is that there is more than enough blame to spread around.  We are almost all guilty of not seeing outside our silos, and assuming nice simple ipso-facto relationships between our favorite topics and Everything Else.  When urban planners fall into the trap of assuming that a single physical strategy, such as Complete Streets or New Urbanism or Urban Renewal or any of the other catch phrases through the years, will have a “catalytic” effect on the local economy, we are oversimplifying because we are not fully thinking about the entire ecosystem (people who do not have good economic prospects or are insecure about their jobs may use the bike lanes out of necessity, but may not shop in the stores by the bike lane like you anticipated).  When business owners and residents assume that the less taxes I pay, the better, we often fail to fully account for the value of the services that the public sector provides us, whether garbage pickup or maintaining streets or keeping us from being robbed or managing the externalities that other businesses and people create – and their potential deep negative effect on our ability to function.    

 We oversimplify the ecosystem, we stay in our silos and stick to our simple solutions, because it’s intellectually easier.  It’s easier to say “My stuff is important, yours isn’t” than to try to look rationally at the whole range of issues and understand how My Stuff fits into the whole system.  And if we assume that our communities are nice simple frontier towns, with lots of empty land to absorb those externalities and a small homogeneous group of people to accommodate, then perhaps that’s fine, at least until we run out of that land or those people get more complicated.  But that’s where we are today. 

If we are honest about the complexities of our communities, then we have to be honest about the fact that there are few, if any, simple solutions.  Things don’t fit easily within the silos anymore, and when we don’t see these related impacts, we will certainly feel their effects.  There are no one-shot solutions – if we want to facilitate the health of the ecosystem, we have to work on a wide range of elements in concert. 

Ideally, this is what planning of any stripe should do, whether organizational strategic plans or community comprehensive plans or any other variant on the theme.  It’s part of why it becomes increasingly important to plan for multiple possible futures – with this many moving parts, a certain level of uncertainty is inescapable.  But too often we only plan for My Stuff, not for the role our bailiwick plays in building the ecosystem.   And as I’ve said about other challenging issues that require more from us than our common sense and grasp of basic Play Nice With Others rules, there are specific processes and methods that have been developed to help us deal with these issues.  But too often, we don’t know about or make the effort to seek out the tools that are available. 

We are increasingly learning that natural ecosystems are amazing things.  All those interconnections and interdependencies between the plants, the bugs, the animals and all that give a strong ecosystem the same traits that we desire in our communities: long-term growth, healthy organisms, the ability to bounce back from disasters (visit the site of a forest fire three years ago to see what I mean).  And the biologists and botanists and other –ologists tell us that ecosystems that lose key members, like an animal who is part of the food chain, are bound for trouble or collapse. The whole reinforces the parts. 

If we are serious about building Wise Economies – economies that are robust, resilient, flexible and don’t leave us up a creek in the future – we need to think of our communities as economics-driven ecosystems, systems where the silo walls have broken down and where the leaves of one aspect of the community shades the roots and feed the animals that make up the rest of the system.

Retail incubators — hm?

 The article on retail incubators at the bottom of this blog entry is not new, but it’s in the file of “interesting stuff to write a blog about when it feels right.”  Given that we’re nearing the pinnacle of the retail calendar, and many of us are spending way  more time in stores than we’re used to, now seems like a good idea to explore the idea of whether we should be trying to grow more retailers. 

 Much of my recent project research has been about demonstrating to political decision makers that their communities have far more retail space than their population (as well as any other live body they can grab from somewhere else) can support.  That’s become a fact of life for communities and regions in the early 21st century: from downtowns to old commercial strips to new lifestyle and power centers, the amount of space that was originally designed and used (and often zoned) for retail uses far exceeds our populations’ capacity to buy stuff.  For that reason, a relatively high percentage is vacant.  It’s pretty simple math. 

As anyone who has been reading this knows, I am a big fan of entrepreneurship — it’s a central element of the Wise Economy Manifesto (sometimes I have been known to call them cockroaches, but it’s a term of endearment, really it is.)  And I would personally have us buying more of our goods and services from local businesses, for no other reason than the documented higher return on investment to the local community. 

How much do we need?

But……..

As a matter of public policy, should we really be encouraging more retailers?   If the funds we have available to spend in a trade area aren’t infinite, and we already have more retail space than we can support, what benefit do we provide to the community as a whole by incubating more retailers?  Aren’t we theoretically setting ourselves up for more vacant spaces?  Unless the amount of money to spend expands, we are simply shifting market share…. is that a benefit to the community, or just a new form of cannibalization?

To be sure, the catalysts for the retail incubators in this article are the property owners, who are borrowing a page from the economic gardening playbook to try to grow their own tenants.  Probably a good idea for their enlightened self-interest.   And growing entrepreneurs is an emerging central strategy for downtown revitalization programs like Heritage Ohio, which recently hosted a training to help downtown programs support entrepreneurship

On the other hand, a publication that I quote a lot — the ULI’s Ten Principles for Reinventing America’s Commercial Strips specfically asserts that communities should change their zoning to prune back the amount of retail space that they provide — both to create space for new types of businesses and to create increased demand for retail goods and services in that area. 

Here’s my germ of a theory: whether or not retail incubators make sense from a public policy standpoint depends on the explicitly-articulated goals of the community.  If the goal is to keep as much of the trade area’s money as possible circulating within the trade area, then a retail incubator may be a good strategy.  If the goal is to fill storefronts in a specific area, like a downtown, so that the area is perceived as being desirable, then a retail incubator may be a good strategy.  But if the purpose is to meet a goal such as these, then it’s critical that the program be clearly set up to meet those goals.  Incubating retailers so that they can populate downtown storefronts, but then permitting them to relocate anywhere, or not managing the rent equasion so that they can afford to be downtown, would be a waste of effort from a public policy standpoint. 

And of course (excuse me while I find my broken record), retail incubation won’t work as a one-shot solution.  If real estate costs aren’t managed, if the environment where all these great new shops are stinks, if new entrepreneurs can’t find ways to work with and support each other, then an incubator strategy will, at best, result in one or two new niche destinations that succeed against the odds surrounded by evidence of good intentions gone sour. 

The neat thing to me about this blog is that I know that you cover the spectrum — economic developers, planners, downtown types, rural types, real estate mavens — and at least one random banker(Sorry, Ron!).  What do you all think?  Are there other benefits to incubating small retailers?  What would you do to make sure it’s done right? 

http://retailtrafficmag.com/news/incubator_programs_04142010/

Tell your Story, share your Journey to build your capacity.. and your Wise Economy.

Sometimes the universe just seems to be on the same page for once.  This post from the Michigan Main Street Center has been circulating the Twittersphere the last couple of days, an indication of how much this post resonated with people in community economic development.  Here’s the main point:

A related theme that has come up across the board with all our Main Street communities is that they are not telling their story often and to enough people.Many of our communities are doing great things from retaining and recruiting business to holding special events and festivals or retail events that get the cash registers ringing to making sure the downtown looks great from a physical standpoint. But, the one big thing communities often forget is telling their story about all the things that are happening in their community.

How true.

In the Wise Economy discussions, one of the points that I have emphasized is that the aspects of your community that make it unique are what makes it economically valuable.  That uniqueness doesn’t have to be specifically about industrial sectors, or business services or any of the typical economic stuff.  Your uniqueness is whatever makes your place stand out from the crowd. If it’s a business, or a natural feature, or a festival, or an original stretch of the Lincoln Highway… whatever it is, that which makes you distinct makes you valuable.  It makes you stand out from the Great Sea of Dullness, and it sets you apart as a place that has, not just something interesting, but a place that has vitality, that has something to offer.

I recently came across a resource that I think could help communities trumpet their uniqueness in a very powerful way.  I recently met the creator of a series of podcasts and SIRIUS-XM broadcasts called Journeys Into.  There are a variety of Journeys Into — American places, beer and hockey, among others.  But the overriding goal is to create a multi-venue source for telling the stories of the people and events that make a place distinct — that make a place truly and honestly unique.  The founder of the Journeys Into initiative is also the creator of the Hidden America web site/travel database,  so he has spent his time in the trenches learning about the kaleidoscope of what makes places unique.

The Journeys Into emphasis is on creating audio recordings — some of which are aired on SIRIUS radio’s Left Jab show.  These are basically conversation-style interviews– think Charles Kuralt kind of pacing.  But the resulting interviews with community people are enjoyable and much more informative than most typical place marketing approaches.  Here’s a couple of samples:

http://conversationsontheroad.podbus.com/?p=301

http://conversationsontheroad.podbus.com/?p=291

Think for a second about the potential this kind of venue creates.  Stories like these are showing up on national satellite radio because people are interested in unique and distinctive places — we’ve know that since at least the initial heritage tourism boom of the 1980s, and that’s only getting stronger.  So there’s the national broadcast example.  But if you clicked one, you were listening to a podcast — an mp3 file, just like the music files you download from the internet.  If you want, you can download it and plug it into your Ipod to play later.

What if you could:

  • Play them on local radio stations?
  • Place them on the radio in the nearest big city?
  • Make them available for download on your web site?
  • Combine them with photos or video and send to your 20 top recruitment prospects?
  • Play them at your organization’s public meeting?
  • what else could you do?

We are often told that visual is the way of the future, that you don’t want to have a web site that’s full of text — people won’t pay attention unless there are pictures.  But this approach provides the opportunity to break out of the visual clutter and connect in a different way — and a way that people can access while driving, which isn’t when they can look at your web site.

What do you think?


Creating a Wise Economy by breaking out of the box

We all live in boxes.  We all operate on the unspoken assumption that the options available to us are constrained, are limited  by something or someone.   And those constraints limit what we think is possible.   As the medieval maps used to say at the edge of the known world, “Beyond Here Be Dragons.”  If we stay in our box, within our constraints, we stay away from the dragons, right?

But what happens when it becomes obvious that the box is breaking apart?

I spoke this morning to an old friend of mine who is comtemplating self-employment instead of the menial jobs for which she is over-qualified (it’s a wrong place at the wrong time kind of situation).  She is struggling.  She has always assumed that she needed to have a “real” job — the voice of her father, a long-dead career corporate attorney, telling her that in her own mind.   But there does not appear to be a “real” job that fits what she, uniquely, brings to the table.  So should she put aside that box and step out into an unknown future, or should she adhere to the voice of conventional wisdom?

That’s what she would say is her struggle, but I think that struggle is over.  At this point, a job that fits her father’s expectations doesn’t seem to exist for her.  Which means that her choice is really something else: to try to rebuild her increasingly tattered box — to try against long odds to get the world to conform its relationship to what she thinks it should be — or to let go of that assumption and move on into the big but unknown world beyond that box.

I think this is a microcosm for what many of our communities are facing today.   We have a communal set of expectations about our  places — we are a bedroom community, we are a blue-collar town, we make cars, we support happy families.  But there are a whole variety of forces that are upending our boxes and threatening our self descriptions.  Maybe it’s sprawl forcing a small town to a first-ring suburb, maybe it’s a closing car factory, maybe it’s aging housing stock and aging residents, maybe it’s closed businesses.   Across the country, I find myself dealing more and more with communities whose formerly comfortable self-definition is falling apart in the face of forces within and forces without.

And a lot of them are wringing their hands and not doing anything, because they don’t know what life outside the box looks like.

Ben and Rosamund Zander, in their book The Art of Possibility, describe an old mental puzzle in which a person is given a square with nine dots and is told to connect all the dots with three straight lines.  Here, try it:

connect all dots with three straight lines?
connect all the dots with three straight lines?

No can do, eh?

Scroll down for the solution.

Here’s the trick: don’t let the grey frame around the dots trick you into thinking that there are impenetrable borders around the dots! No one said you couldn’t go outside the plane of the dots, right?

Now, of course, you can’t not see the solution.  But it sure seemed impossible before, didn’t it?

In my posts on the Wise Economy, I have emphasized the need to look for unexpected possiblities and to be brave in the face of challenging goals. For a community to make the choice to go beyond the accustomed box, and to look for those unexpected possibilities, and to maintain bravery (sometimes we call this focus or commitment), is a whole lot more complicated than my friend looking at her career choices.  There are more people involved, more different ideas, and more possibilities than any one individual will face alone.

But we have to do it.   So many of our communities are struggling because we have allowed them to be defined by what they have been, instead of looking at the assets they offer in the new light outside the old box.

So how do we get out of the box?  Stay tuned.

A Manufacturing Incubator (of sorts) in Milwaukee

http://www.biztimes.com/news/2009/11/13/a-new-corporate-umbrella

An interesting article out of Milwaukee.  Not every community can have a sort of Daddy Warbucks like these three gentlemen, but what I think they have really done goes far beyond a holding company.  By consolidating not only the usual office space amenities, but the equipment and the skilled employees necessary for manufacturing, they are creating a new model for business incubators — one that has the potential to take that idea beyond services and applies  it to the core processes of  manufacturing.

I’m sure some people might argue that it would be better for each company to have its own employees, and perhaps one day they will do that.   But I think it’s better to do this — to not only employ a few people, but to use that opportunity to help three businesses grow and get their legs under them.  Entrepreneurship isn’t exotic, and it’s often just plain old hard work.

Of course, these three companies share a workforce because their bosses told them to.  Could this work in a more conventional incubator structure?  Could a typical incubator convince or coerce its tenants to share core staff?  Or would that lead to a muntiny, perhaps even if the alternative were to close the doors?  More to the point of my recent posts, is this an

oh, if we all had one.

that our governments and agencies — and entrepreneurs — are ready to accept?

http://www.biztimes.com/news/2009/11/13/a-new-corporate-umbrella

The Wise Economy manifesto, first draft

As I discussed in this post, I have spent most of my adult life thinking about how to deal with the impacts that economic change has on the health and quality of life of communities.  I firmly believe that economic change is inevitable, but I also believe that change creates opportunities, usually at the same time as it takes away what we knew before.  Of course, that doesn’t mean it’s easy.  As a Cleveland native, I had an early front-row seat at the spectacle of the implosion of the 20th century industrial economy, and I can tell you first hand about the pain and harship that causes.  But I don’t believe that there is any point in trying to turn back the clock to some magical Time Before.   Not only is it impossible, but that Time Before wasn’t too great for at least some people, either.

As a result,  I believe that the best service I can do is to help communities figure out how to thrive — how to find a bright future in the face of  swift and often unnerving change.  Most of our communities aren’t naturally inclined to handle that any better than many of our residents are, but both job hunters and thoughtful community leaders know that if we don’t find a way, we won’t succeed.

I have previously summarized my theory as Sustainable Economic Development, but I have been moving away from that term because of the potential for confusion with the economics of green construction.   What I am concluding, however, is that what I am really talking about is how to create a Wise Economy – an economy that makes the right decisions not just for today, but for the future.  Here is what a Wise Economy does:

  • Looks constantly for new opportunities — and particularly seeks the unexpected ones.
  • Embraces its differentiators and values its assets, understanding that differentiation leads to value and away from the chase to the bottom, and that liabilities turn into assets depending on how you look at them.
  • Begins with the end firmly in mind, and sticks to a shared plan of action.
  • Understands that the life of a community is a marathon, not a sprint (but celebrates winning the stages as well).
  • Bewares one-shot solutions and magic pills.
  • Maintains bravery in the face of setbacks.
  • Grows by cultivating its native species, rather than investing everything it has in transplanting something exotic, finicky and not interested in the community’s differentiators.
  • Fertilizes the soil.
  • Feeds the cockroaches
  • Supports a healthy local government that can provide the high quality public goods and services that the community needs.
  • Understands not just what is going on in the larger world, but the unique role that it can play in that world.

Despite my own mostly brown thumb, there is a horticulture thread here that I think lends some valuable insights.  Many of the communities I deal with have been left with exhausted economic soil – the products we are used to making, the ways that we have been used to extracting them – are worn out.  We are left to deal with the leftovers – what economists call “externalities.”  An externality sounds like it should be a non-problem — it’s external, after all — but this is one of the tricks of economics: an externality to one, such as a business, is usually an impact on others.

But leftovers can also become fertilizer.  The big question is, what new opportunities exist because of our assets? How can what we thought was waste fertilize new opportunties?

If you’ve ever had a garden, you know that  just throwing leftovers on a field will not give you healthy plants.  Composted leaves make a rich fertilizer, but if you just leave those leaves to cover the ground over the winter, you will have bare dirt when the time comes to grow again.  The investment of time and resources is what turns the leaves to compost.  It doesn’t have to be a very big investment, but we have to see the value of what we thought was waste, and put in some effort to transform it into something new, before we can enjoy that new growth.

The kind of  growth that we are seeking won’t just drop from the sky – even if it takes the form of a casino, a streetscape, a convention center or the typical incentive – based city program.  Those may have short-term impacts, but their impacts will only last as long as the casino has a monopoly, the streetscape looks clean and new, or the little piece of the economy that they were depending on is holding strong.  When that fails, the benefit of that one-shot solution fades, and we are once again faced with the search for opportunties.

Just like real change in a person’s lifestyle has to ultimately come from internal motivation, a Wise Economy grows from the investment and the dedication of the people of the community.  These aren’t the Captains of Industry of decades ago – these are the people who have the will, the audacity, to roll up their sleeves and make it happen.  These are small retailers, franchisees, established industries, creative thinkers and technological innovators who are willing to take the risk  –  willing to buck the old conventional wisdom – and make something new.

Just like you don’t farm with bare hands alone,  however, the community’s new captains need a variety of tools to grow a new economy.   They need safe and clean places, space to work on their opportunities, places to experience being part of the community.  And they need encouragement – they need to know that it can happen, and that their investment will pay off.

Right now, though, the big question is:  what am I missing?

I am working these ideas out in detail in blog entries filed here under Wise Economy.    I hope you’ll come along for the ride and share your own ideas of how a local economy can become wise (and if you can see where I am going dumb, please let me know that, too, OK?).

Why give incentives?

This editorial from South Carolina’s  News & Observer advocates an idea that isn’t new but is still radical: that financial incentives to recruit businesses aren’t worth it.  The author, Dr. Jesse L. White, Jr., writes:

The headlines on two consecutive days said it all: Dell Computer closing shop and laying off over 900 workers and Cree Inc. adding almost 600 jobs. The difference: Dell – headquartered in Texas – was lured to North Carolina with the promise of over $300 million in incentives, while Cree – a homegrown business spun out of N.C. State University technology – requested no state incentives (although in fairness Cree did get an incentive a few years back to build an expansion plant).When are we going to halt public expenditures on the “buffalo hunt” for footloose industry and instead focus our resources and efforts on the sector that produces by far most of the jobs – existing industry and homegrown business?

One of the important  ideas that the author touches, which many discussions on this topic overlook, is the issue of the opportunity costs of incentives.  Economics 101 students learn that an opportunity cost is the value of the other choice that you could have made.  When my 11 year old’s money burns a hole in his pocket (happens a lot) and he buys a new game for his DSi, he is learning that the opportunity cost will become apparently very quickly — usually the next time he sees an ad for a new Lego set or finds out that all his friends are riding skateboards.

As White points out,

Imagine if the South in general and North Carolina in particular had put all of the money spent on industrial recruitment into education, training and small business support. We would be watching even more Quintiles, Cree, PPD, Southern Seasons, Performance Bicycle and other homegrown entrepreneurial success stories all across North Carolina. And, although there are no silver bullets in economic development, homegrown businesses are more likely to stay put, invest in the local community, provide stable civic leadership and keep the control and wealth local instead of away at some remote corporate headquarters.

Two of my principles of sustainable economic development are that one-shot solutions almost never work, and that one of the most important things that any economic developer can do is to grow local businesses – for all the reasons that Dr. White identified.

Imagine, if we invested in growing what sprouts in our communities instead of exhausting our resources trying to transplant one exotic species, how much more growth would we enjoy?

http://www.newsobserver.com/opinion/columnists_blogs/other_views/story/184804.html

 

The challenges of the Youngstown decline management model

My last blog post focused on one of several points made in an article at www.newgeography.com that discussed issues around Detroit’s post-industrial environment.

In addition to an interesting insight into what I recently dubbed the cockroach system for entrepreneurial development (I’m betting I am going to regret that…), the article also provides a great illustration of the loss of building density in Detroit’s neighborhoods over the past 60 years and presents a concept diagram of a future spatial reorganization of the City of Detroit with a central business center orbited at a distance by small, compact villages, connected by transporation corridors and separated by what the diagram calls “opportunity areas.”

This is the first time that I, at least, have seen a concept that begins to make a little bit of sense out of the newly – popular idea that cities that have lost population could create a quasi-rural environment to enhance the quality of life of those who remain.  From a fiscal point of view, if for no other reason, that idea has not seemed workable to me because a big part of what makes it possible to deliver urban services is  the density of the users.  Ask any suburban county that has been trying to figure out how to pay for a transit system, and you’ll see what I mean.

If the users are too spread out, there aren’t enough users in the area that can be reasonably served to generate enough income to pay for it.   And that applies whether we are talking about bus lines, garbage pickup, sewer systems or fire services.  Regardless of how you feel about density, it’s pretty clear that density makes higher levels of public service possible.  What the Detroit concept does is create centers of reasonable density, which might overcome the challenges that I think would face a quasi-rural city.

But here’s where I am still struggling: how do you do this?

How does a Detroit or a Youngstown create, or at least facilitate, this kind of massive spatial change?  Presumably the scattering of people outside of the “villages” would need to either relocate to the villages or live a more rural type of existence – no bus stops, minimal road maintenance, etc.    But a property that is not in one of the villages would presumably become less valuable than a property that was in one of the designated villages.  So (assuming a massive government-funded buyout was not in the cards, how could the population financially make the shift from dispersed to concentrated?  And is there anything that a Detroit or a Youngstown could do to help people make the private decision to relocate to a place that is better for the City to serve?

 

Detroit, the Land of Opportunity

This article from newgeography.com is more dense with information and ideas than I can cover in a blog post (especially a Friday night blog post!), but — and I say this with full awareness of all of the pain that Detroit’s dysfunctionalism causes — I think this is an interesting object lesson of the cockroach theory of economic development that I proposed yesterday.  In the relative absence of the usual structures of neighborhoods, city services,  jobs, etc., there are at least a subsection of people who will find some opportunity to do something new, even if that new thing is as old as selling what you killed.  As one of the comments on yesterday’s post wrote,

Entrepreneurs will find, beg, borrow, and do it what it takes to succeed if they feel it is worth it. Groups of entrepreneurs show up where it is least expected because no one will meddle with them.

I think the key question is, what can communities do to empower more people to find and capitalize on the opportunities available?  Can we really just rely on the subset of people who naturally have the chutzpah to take on the challenges that others find impossible, or should we be trying to grow more entrepreneurs?  Is that even possible?

btw, my husband says it should be “dysfunctionalocity.”  He’s from Detroit, so he should know, right?

http://www.newgeography.com/content/001171-detroit-urban-laboratory-and-new-american-frontier

the cockroaches and economic development

Last year I chaired a work group focused on urban entrepreneurship for Agenda 360, a Cincinnati-region strategic planning effort.  One of the issues we struggled with was, what urban communties do effectively to really build entrepreneurship. A very bright lady who works with CDCs finally said something like this:

“Entrepreneurs are like cockroaches… they are very, very good at finding and using what they need.   What we need to do is make a pile of rich food available to them.  If the pile is available, they will find the right food for them,  and they’ll make the best use of it.”
I have been thinking a lot lately about what communities can do to build their base of entrepreneurs.   I think there is a little more to this — potential entrepreneurs need emotional and social support, and they need to know how the heck to run a business — but her idea is certainly part of the equasion.

But here’s what I want to know: what kind of rich food do the cockroa…er, our precious entrepreneurs, need?

Home based businesses are 50% of all??

Wow…. This article claims that more than 50% of businesses are home-based.   Imagine how that changes the game for planning and economic development:

How do you retain your businesses and help them expand if you can’t see them? 

What does a home-based business operators need from your ED programs, anyways?

What do they need in terms of community facilities?  Should you give incentives to coffee shops?  Require wifi hotspots in new subdivisions? 

Can you give an incentive for expansion to a business that has virtual employees, but is based in your town?

http://www.businessweek.com/smallbiz/content/oct2009/sb20091023_263258.htm?link_position=link9

Seeing past incomplete market knowledge in rural America

This article from the Center for Rural America demonstrates a key challenge in small city redevelopment — and in any place, urban or rural, that is having trouble attracting redevelopment:  Why isn’t anyone investing in us, and what can we do about it?   

The standard market analysis tools that site selectors, retail chains and developers use often miss the opportunities that communities can present, especially when those communities don’t fit the perfect mold.  Site selectors, retailer location specialists, etc.,  have to make their first cut when looking at new sites on the basis of information from national databases, such as Claritas.  And for many communities that are not attracting investment, the information they are seeing is probably less than encouraging.  If the trade area they choose shows  them low incomes,  few households, low home values, etc, why should they look further?  They usually cannot see what you in the community see. 

Chances are, it’s your local entrepreneurs  (or, in these cases, your whole community) that can see that opportunity – not just the need, but the real economic opportunity.   The grocery stores in this articles, just like the entrepreneurs  in your community, aren’t getting big government handouts or being bankrolled by sugar daddies.  Entrepreneurs can succeed where franchises fail to go because they have richer market knowledge – and the ability to flex their business to take advantage of the opportunities.  As my father used to say, “Where there’s a will, there’s a way.”

Thanks also to Jack Schultz of the Boomtown Institute for publicizing this article in his newsletter

http://www.cfra.org/newsletter/2009/10/sustaining-small-town-grocery-stores#