The Wise Economy: What makes you Unique Makes you Valuable

My biggest difficulty in Christmas shopping (other than trying to remember which Bakugon the 7-year old said was the really wonderful one, and which one was lame),  is trying to find something that will be unique and valuable for the person who will get it.  To be sure, I don’t strive for that for everyone — the gift for Great Aunt Sophie doesn’t always get the same level of thought as others — but to the extent that I can, for the people who really matter to me, I am looking for something that is

A Bakugon unfolded. I want to say this one is called Redguyimon, but I suspect that's wrong.
  • different from what they will get from anyone else,
  • different from what they already have, and
  • something that they will value.

So for my cool sister-in-law, I am looking for a funky necklace made out of natural materials.  For my niece, I am looking for an outfit that captures her free spirit and will look great on her.   For my kids… well, you know, Santa gets a list, most of which is incomprehensible to me anyways.   Nevermind.

But here’s the kicker: I will probably be willing to pay at least a little bit more for the perfect funky necklace or free-spirit outfit than I would for a typical string of beads or a boring t-shirt and pants.  And because that’s what I am looking for,  I am also more likely to stray from the beaten path and go shopping somewhere other than Target.

In the Wise Economy Manifesto, I said that A Wise Economy

Embraces its differentiators and values its assets, understanding that differentiation leads to value and away from the chase to the bottom…

There’s a lot there to unpack, but the germ of the thought is this: That which makes a place unique makes it more valuable to the people who want it.

A lot of times it’s easy to see our communities as commodities, like the plastic toys on a shelf in a big store.  If I can get the same transforming thingamabob at Big Box A vs. Big Box B, then I will probably buy it where it’s cheapest.  That’s the general retail Race to the Bottom — if there is nothing that makes your store different other than price, then you will win or lose based on how cheap you are.  Anything other factors  go out the window.   But if you are the only store that carries the way cool thingamabob, then you not only win the sale, but you don’t have to charge the rock-bottom price, right?

It’s the same with our communities.   If we regard them– and promote them –as commodities, then the only way that we attract new businesses or people — or keep the people and businesses that have the wherewithal to go elsewhere — if if we make ourselves the lowest-price option.   That is what economic development incentives were about in the first place — making the costs of a location lower, or at least even with, the competition.

Think about it:  If my sales pitch is that ” we are within 600 miles of 75% of the United States,” and hundreds of other communities can make the same claim, then what reason does any business have to come to my community — unless I am the cheapest?  And when I am no longer the cheapest, what reason do they have to stay?

When it comes to creating a Wise Economy, our communit

ies’ ability to succeed long-term depends on our ability to

capitalize on and communicate those

features that make our community

You don’t want to be on this

unique. There are a lot of elements of any community that are nice but numbingly common – “we have a great work ethic,”  “we have

rail service,” etc.    But it’s the unique elements — the ones that make your community different, the ones that cannot be replicated by someone else–that will make you more valuable to someone than anything incentive you can offer.  If you are not playing to your uniqueness, then you are joining the Grand Caravan of Commodities on the Race to the Bottom.

There are a couple of important words of warning, though.

  • First, what is unique and valuable to one person is a white elephant to another.  If you establish yourself as something unique, you become like a gourmet cheese — people will either pay more for your one-of-a-kind taste and texture, or they will drop you back on the shelf when they get a whiff of you.   If your downtown is reknown as the Victorian Antiques Capital of Ohio,  a lot of people would consider  that a point in favor of moving there.  I myself, on the other hand, will probably look somewhere else
  • Second, fake uniqueness will hurt you worse in the long run than being a commodity.
  • Third, remember that blog posts almost by their structure have to simplify everything.  One of the other principles of a Wise Economy is Beware of One-Shot Solutions.  Your community has many aspects that make it unique, and it is that entire package, not just one Claim to Fame, that will help you create a Wise Economy.

In the next post on this topic, I’ll talk about the different between generic uniqueness and real uniqueness, and how we are all really in niche businesses anymore, whether we want that to be or not.

7 thoughts on “The Wise Economy: What makes you Unique Makes you Valuable”

  1. If all planners would consider economic development as part of their sustainability efforts we could have a better dialogue on what makes a “good” community. Why is yellow/single family residential the dominate color on all land use plan maps? Why when the grid pattern of development was rejected in the 60’s and 70’s is it coming back today. Have we learned something or forgot something? Pam Mundo

    1. Yes — I think that fiscal impact analysis generally indicates that all “yellow” on the maps isn’t sustainable, at least under most states’ taxing systems (and as a conversation at my son’s basketball game with a woman from a community with a great school district, no commercial or industrial businesses and an almost impossible tax bill also indicated). Why do folks think that this is the case? Is it a remnant of the “smokestacks are bad, keep the children away from them” learning, or is it simple political pressure? And what should planners do about it?

  2. I agree with your thoughts in this post, but want to point out that pursuing a policy of differentiation over low-cost location does not mean that you can disregard the cost of doing business in your community. All economic development strategies must be concerned with productivity and effiency – that is, achieving maximum value at the lowest cost. A policy of differentiation may require higher taxes to cover the additional expense of differentiation, but there should be increasing productivity and efficiency over time in the ability and capacity of the community to maintain and enhance its differentiation. Otherwise, competition will take its toll on the community as others mimic the “unique” features that allowed the community to differentiate in the first place. Being the innovator gives you an initial market advantage, but unless the economic development strategy includes a drive to efficiency, that adavantage will not be maintained over time.

    I didn’t think there were many planner/economic developers out there – it’s nice to see your blog!

    1. Gary –

      You are absolutely right — just because you are unique does not get you out of controlling the cost of doing business. There is a limit to how much even a desperate Christmastime mother will pay for the very cool thingamabob, right?

      The other thing that you point out, which I think is spot on, is how fleeting an advantage based on innovation is. The shelf life of an innovation, whether it is in downtown streetscaping or in shampoo development, is only getting shorter and shorter, and puts those who propose to live by innovation in a position of having to innovate constantly.

      I think that’s why it’s important to make a distinction between asset-based differentiation and innovation-based differentiation. The benefits of an asset should, at least in theory, last longer than those of an innovation. Since an asset is, almost by its definition, inherent to the place, the benefits to be gained from that asset should have a longer shelf life than something that was invented specifically to tap a certain situation. Certainly an innovation can be derived from an asset, but it’s the asset, not the innovation, that is likely to last for the long term. If I have a highly skilled technical work force, they may be in demand for solar technology one decade and nanotechnology the next. But if I invest in the innovation and ignore the asset, I may find that we are out to sea when another place copies our innovation or we lose our cutting edge. The critical question becomes, what investment does that asset need to keep its value and allow it to flex with new innovations as they arise and decline?

  3. When it comes to innovation, the best quote I have heard is, “The Pioneers get shot.” Communities should be very careful about investing in innovation. Most innovation happens without government investment anyway or at best through investment in transportation and educational infrastructure to the sow the seeds for innovation.

    As for previous conversations a Community should be able to judge for themselves what they want to be. that said they must have the information available to make a sound decision. If they want to be all yellow/SF so be it, just make that decision having completely understood what the adequate tax structure will be to maintain the level of service expected by the Community. By the way this is were the planner/economic developer comes in to inform the Community the consequences of their decision.

    1. Sometimes pioneers get shot, but they don’t stay in the Old Country and die of starvation. Communities do need to innovate, just like everyone else, but they need to target that innovation to the areas where they are uniquely suited to make a difference — like infrastructure — and where they can build on their assets.

      I appreciate your point about the planner’s/ed’s role as the person who enables fully informed choices, but that seldom happens — why? And not doing so strikes me, in an absolutist sort of way, as a dereliction of duty. So what keeps that from happening?

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