Originally published in the Nov. 2013 issue of the Nova Scotia Business Journal
By Fred Morley
Success requires that we understand our economic ecosystem
There are lots of genuinely new ideas for growing cities and communities. In fact, I have some new favourites.
The first is a concept from Brad Feld who published the ground-breaking book “Start-up Community” last year. Feld speaks to the vital role entrepreneurs play in the growth of communities and how governments can either help or hurt this process. The second is the concept of “Economic Gardening” popularized by the Edward Lowe Foundation.
Start-up communities need start-ups and entrepreneurs. But that’s not enough to ensure success. Feld’s “Boulder Thesis” (Feld is based in Boulder, Colorado) suggests that successful start-up communities have four elements:
1 The start-up community is entrepreneur led. These entrepreneurs have to be networked in a very real sense. Partnership attitudes are required. Zero sum mentality (the notion that there must be one winner and one loser; for every gain there is a loss) is a start-up community killer.
2 Communities have to commit for the long term. Building a start-up community is a 20-year process and doesn’t adapt well to the three- or four-year cycle of government. It’s why start-up communities can’t be led by governments.
3 Start-up communities are not an exclusive club but are open to anyone who wants to join. Those that can’t partner or have zero sum or “old school” compete-with-my-neighbour attitudes are quickly excluded.
4 Activities and events are important. But they can’t be the old school cocktail receptions, awards banquets and speaker of the month clubs. Think more start-up weekends and hackathons.
Feld distinguishes between “leaders” (the entrepreneurs who must lead the process) and “feeders” (organizations like government, NGOs, universities, suppliers and basically everybody else). His basic observation is that feeders can’t lead. Governments sometimes try this but they are hierarchal and slow moving. Start-up communities are networked and move fast.
So we need entrepreneurs to lead growth in our communities and we need to support them as much as possible. Businesses invest more in business lines that generate the best results; we need to rejig our business support structures to do exactly that. This doesn’t mean picking winners. That’s not required because winners pick themselves. It’s pretty easy for communities that have active business outreach programs, like Halifax’s Smart Business program, to identify companies that are consistently growing by more than 20 per cent a year.
Many successful communities focus economic gardening programs on exactly these kinds of companies. The Edward Lowe Foundation in the U.S. runs economic gardening programs in 42 states, so it is not an experimental concept. It’s just new to us. These kinds of programs encourage business networks, peer-to-peer learning often through business accelerators. Accelerators put promising business leaders from hyper-growth companies through a comprehensive assessment and a kind of boot camp for business where key skills are learned and shared.
Concepts like start-up communities and economic gardening all have one thing in common, a much deeper understanding of the nature and needs of successful business and successful communities. These kinds of ideas recognize that business and communities prosper or fail because of the business ecosystems they exist in. Success requires more than simple ideas and short-term band-aids. Success requires that we understand our economic ecosystem.
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Fred Morley is the executive vice president and chief economist of the Greater Halifax Partnership. He has written over 100 articles on economic growth issues and presented his views to dozens of organizations and governments around the world. You can reach Fred at firstname.lastname@example.org.