Saturday, January 11, 2014

Economic Gardening

Chris Gibbons, Director, Business/Industry Affairs, Littleton, CO (
An entrepreneurial approach to economic development - data for each state and town, numbers of commercial establishments and jobs
89-90% of businesses self-employed or ten to one hundred employees for 30% of jobs
another 30% of businesses are mid size and for another 30% of jobs
Large companies have had a net loss of jobs over the last decade
Job growth comes primarily from expansion
"Work with local businesses to create good jobs" is the mission statement from the city gov
Started this process in 1987 after losing 7000 jobs at one large defense contractor
Uses complexity science, systems thinking, network economics, temperament
Complexity theory: mechanical versus biological, riding the edge of chaos
Support system using modern tech:  google adwords, GIS, customer and market info, SEO, on a national and international basis, database research, competitor intelligence, social media strategy with facebook, twitter, linked in...
One local company, ADA-ES, removes mercury from coal power plants
From 1990 to 2010 employment doubled, adding jobs all through the recession
1990-2005 job growth rate of 135%
Now more jobs than the town has workers
Florida has begun this statewide in a 2 year pilot funded for $3.5 million and grew jobs by 3,285 with a $2467 cost per job and an increase of tax revenues of $18 million
GrowFL companies got a net job gain of 7% in the last 3 years
Kansas, Louisiana, Wyoming, Michigan, Missouri, Oregon, Nebraska, Washington and regional projects including Vermont, New York, Indiana
Michigan governor's Rick Snyder's economic development plan is completely economic gardening
Q: What is the level of skill needed by public servants to access this data and what about areas where data isn't too great?
A:  skill level needed is high.  Have a learning center and model is a hub and spoke on a regional basis (for instance, Florida has its data center at univ).
Privacy and availability is different depending upon the country.  US has the most data available.
Q: Secret of success in moving from one town scale to many states?
A:  Most communities in US recruit but now the pool is drying up (overseas export and globalization) and people are looking for something else.
National center ( will work with the community and turns info around on three weeks.
Q:  how loyal are the businesses?  How many move?
A:  There is turnover but experience is that there are deep roots locally and few who leave.
Q:  for the first time in thirty years Chinese city of Hsintsin (spelling?) has entered a recession what is your suggestion?
A:  Complexity - punctuated equilibrium, sometime the bottom drops out. It has nothing to do with what you do.  We are riding a wave beyond our control, to a large extent.
Q:  Edge of stability and chaos, how do you keep them on that edge?
A:  Temperament has lot to do with it. Intuitive-thinking-judging personality types on Myers-Briggs personality test are the ones who run companies.  You need a temperament for change and innovation.
Q: Seems to be the same people as before but a different system.  Does that mean everyone can succeed?
A:  Not everyone can succeed, success follows the power law with a long tail and only a few who get most of the goodies.
Q: Building a business ecosystem similar to an industrial ecology?
A:  Need a business ecosystem which may not be available in smaller towns as well as entrepreneurial spirit. Entrepreneurial gene got bred out of industrial midwest due to factory heritage, in great plains Farmers had such thin margins that risk gene is out
Q: Work with start ups?
Failure rate very high but like Little League.  They are more like college ball, candidates having to go through a couple of screens, although they do work with smaller businesses by city council mandate
Q: If you tell everyone your secret won't you build your competition?
A:  Take the moving of jobs out of it and it doesn't really matter.  Every town has its own, different economic garden.
Q: What do you do different from big consulting firm?
A:  Cater to smaller scale businesses and McKinsey has just now stumbled into complexity but they don't use temperament at all and don't use network economics, for instance, Brian Arthur from Stanford on increasing returns and lock in
Q:  If everyone did this isn't the fundamental skill the capacity to network?
A:  Part of the formula.  Any business is either a commodity (product is exactly the same) and price is the only measure (producing a race to the bottom) or innovate (one of a kind) and keep on innovating to stop from becoming a commodity.  Two words based upon 35 years of experience - export innovation, make it new and export outside your community
Q:  How do you structure your service?
A:  National center will do a company for $4000.  Usually a public agency, the city or state, pays.
Q:  How much depends on a high tech work force?
A:  Not high tech per se but innovation instead.  Get out of commodity jobs into skilled and innovative, one of a kind work.
Q: Work force development through community colleges?
A:  Yes, in constant communication with community colleges as to what is needed from education.
800 communities have visited Littleton over the 25 years to learn how they do economic gardening.

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