We just reviewed Regions Matter (OECD, November 2009). It’s chalk full of bits and bobs we’d picked up (and learned ourselves) while studying, conducting research, or providing technical assistance to stakeholders in regions, but offers a difference level of coherence than we’ve seen in some time.  We thought we might share.

Key Policy Messages about Regional Economies and Development (the “Big Picture”)

• The intent of regional policies is evolving: they are increasingly about fueling growth and not just limiting (or reducing) disparities.
• There is no consistent relationship between urban concentration and economic performance – simply concentrating resources in a place does not necessarily lead to growth.
• Public policy matters in maximizing the potential of assets in regions.
• Leading and lagging regions are both important – when lagging regions improve, they make important contributions to growth and equity, opportunity.
• The use of productive assets (labor, capital, technology) are correlated with growth, but no single factor explains improved performance in a region. It is the interaction and interdependence of key assets that matters (suggesting flexible and integrated policy approaches).
• Investment and governance are important dimensions of regional innovation and change, but there is no blueprint for these. Policy should be developed in the context of the specific assets a particular region offers.
• Research- and technology-driven innovation is highly concentrated, but public policy can impact growth and capacity in regions with assets in emerging fields.
• Innovation policy is not just about inventing the next new technology, but also about its adoption or application. Different regions have different innovation assets and can and should develop these based on their unique capacities. Some regions will invent; others will deploy or scale.
• Innovation capacity is moving East (to Asia, where there are high concentrations of skilled labor and dense supplier networks). This mean regions in OECD countries must be mindful of how they develop knowledge capital that allows them to compete.
• Rural regions offer innovation potential but in different ways – social innovation around environmental issues, better public services (on which most rural areas are highly dependent), and new cooperative arrangements for living, working, and managing communities hold promise.
• Sustainable urban growth is widely recognized as a key policy priority.
• Regional policy is difficult to manage at the national level. It would benefit from coordination and multi-year co-financing.
• Learning, knowledge-sharing, monitoring and evaluation need to be coordinated across levels of government.

What turns places with concentrations of assets into agglomeration economies? (from Krugman, 1991)

• The sharing of unique, place-based facilities (labs, universities, creative space, etc.)
• Gains from producing complementary products in a wider array of facilities
• Gains from a wider array of suppliers (and supply chain connectivity)
• Deeply and broadly skilled labor reduces risk of adjusting to market shocks
• Matching mechanisms (connecting workers and jobs, suppliers and purchasers, distributers with buyers and sellers, etc.)
• Learning mechanisms based on the generation, diffusion, accumulation of knowledge and the systems that cultivate and disseminate it.

Results of OECD Growth Model Analysis

• Human capital and innovation positively influence regional growth (as traditional growth theories suggest).
• Elements from new economic geography theories (e.g. agglomeration economies) are also relevant and reveal a spatial connection to growth.
• Infrastructure is a necessary but not sufficient condition for growth – it is only relevant if human capital and innovation are also present.

Time also matters in regional development efforts…

• Infrastructure and human capital shifts require three years to positively influence growth
• Innovation is even longer-term, netting positive effects after five years.

Governance in Regions

Regional development depends on efficient governance. Accountable and credible leadership is important, but it looks different than a generation ago:

• It’s network-based, not organization based.
• It’s championed by collaborative leaders, not individual heroes.
• It’s more likely to be university or public sector-based than private sector based (and that’s okay, as the attention of private sector leaders is now often global, not local).
• It manifests in shared public-private ventures that can take a variety of forms.

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Thanks to ell_brown for the Flickr photo.

Training vs. Jobs

In communities across the country where unemployment is especially high, leaders and policy makers urge workers to upgrade their skills and search for employment in new and growing industries – like wind energy. But often, the jobs aren’t there yet.

Better Bridges Between Economic and Workforce Development

Yes, the world is getting smarter. Technology has enabled us to work in new and different ways: to collaborate, partner, and innovate in the way we do our work. Yet in regional economies, where programs are increasingly reliant on federal and state resources, siloed funding streams systemically impede effective collaboration. Integrated, comprehensive planning can help regions that are looking to bridge that gap. And new tools for practitioners and better research about integrated approaches are emerging.

Regional Research Symposium

In late October, the U.S. Economic Development Administration (EDA) partnered with the Regional Research Institute at West Virginia University on a Regional Research Symposium (links to presentations). EDA has invested in a number of initiatives that suggest areas where workforce and economic development should be connecting to create comprehensive regional strategies:

• Data. A collaborative research program between Indiana and Purdue Universities (leads), EMSI and the Rural Policy Research Institute’s Center for Regional Competitiveness created a set of data tools that take a regional approach to innovation-based growth to help identify promising paths to economic growth. While not yet complete, the tool will allow users to create their own region and access federal data all in one place.
• Funding Innovation. The same group also created an innovation index to help guide new investments. Innovation was seen as a place where economic developers could broaden their thinking and provide definition for other federal agencies. Further research into human capital qualities that promote innovative growth was also mentioned as a future funding interest.
• Linking Industry and Occupational Clusters. The research team from Indiana and Purdue Universities also created maps to help understand local workforce and education clusters to help bridge the gap between workforce and economic development. The maps can show how well the occupation and knowledge clusters strength match industry cluster strength. Location quotient analysis and changes in location quotient analysis maps can be found on their website.

Community Resilience

Another place of intersection is around community resilience. The EDA funded research from the Savannah River National Laboratory Community and Resilience Institute (CARRI) to provide a framework of community resilience. Taking a comprehensive approach to resilience, CARRI is researching communities’ ability to adapt to perceived adversity—in any situation—and suggests a long-term planning agenda to grow social capital between community assets.

We are keen to find ways to enhance our own effectiveness by integrating these new tools and approaches.

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What’s Community Agility?

Two years ago – when we launched the Community Initiatives Team – agility was on ours minds. Pre-recession, we were hearing flat, but seeing spiky. Our team members live and work in regions as diverse as Portland (OR), Tucson (AZ), Charlotte (NC), and all over Michigan. So while the U.S. economy at the time was widely perceived as booming, our communities were still smarting from the steep downturn a few year before. Yet, we were also bearing witnesses to infinitely creative responses to new challenges, and the beginnings of new kind of economy.

In our work, we were confronting significant structural challenges:

• Decreasing overall economic security for families despite job growth
• Industry-wide transitions changing job and skill requirements for large numbers of workers
• Lack of access to investment capital where entrepreneurs seemed to need it most
• Chronic budget shortfalls compromising basic public services in our communities, and
• Institutions, agencies, and organizations with clearly shared missions acting in isolation.

At the same time, we saw opportunities for collaboration (on and offline) and reinvention everywhere. We focused on building agility.

Developing Methods for Change

With the aim of helping communities find opportunities to thrive while also managing through downturns, and with partners including the U.S. Department of Labor, the Council on Competitiveness, and the Charles Stewart Mott Foundation, we developed methods and approaches for cultivating agility:

• Developing shared intelligence, by collecting and making meaning out of data that matters to multiple community organizations and agencies.
• Promoting network weaving, based on the theory that a whole host of benefits derived from well-networked communities (we had been studying networks for some time, but found Sean Safford’s early work at MIT – subsequently published in book form – very compelling). Later we partnered with June Holley to learn techniques for social network analysis.
• Facilitating collaboration across “silos”, so that people from across disciplines, departments, agencies, programs, organizations, and institutions find common ground and begin to share ideas, talent, and resources in ways that maximize wider community benefits.
• Encouraging public engagement, since real change happens in firms, schools, and neighborhoods, not just boardrooms.
• Advancing an entrepreneurship agenda that emphasizes not just new ventures, but entrepreneurial culture itself.

These methods emphasize the building of capacity—to collaborate and to innovate—so that communities can reinvent themselves over and over, not just build the next new thing. We worked with (and learned from) community leaders and project partners from five U.S. Department of Labor WIRED regions (Southeast MI, Mid MI, Southern AZ, Kansas City, and the Piedmont Triad NC partnership) and two BRAC regions (Ft. Bragg NC and Southwest OK), and a host of other communities in transition.

Checking In

Last week, our team met in person to review progress, and take a look at the current (and growing) ecosystem around community agility (now increasingly called resilience.)

New Trends

While we’d been paying attention to the emergence of new conversations and community innovation spaces individually, sharing this information helped all of us see that we are now in the company of more (and more diverse) people advancing some of the same goals. Here are a few we’re pretty excited about.

Social Innovation

The people who identify with “social innovation” are a wildly diverse, eclectic and exciting bunch, ranging from the academically-inclined Stanford Social Innovation Review crowd to the entrepreneurial community that is Social Edge (Skoll Foundation) to the activists, organizers, and media mavens who see new ways to make change through the social web. The new White House Office of Social Innovation will certainly accelerate interest in the field, which is now beginning to map itself. And interest in social innovation is appropriately global. The Young Foundation, SIX, and the Skoll World Forum, together with institutions like Ashoka and the Aspen Institute have nurtured social innovation networks around the globe for years. More recently, the John S. and James L. Knight Foundation has sponsored a host of initiatives designed to help innovators of all ages and stations leverage the power of social media and the web.

Video and Twitter have helped make much of this activity accessible and transparent. Last week, 900 people gathered at SoCap09 in San Francisco to figure out how to fund it.

Gov2.0

Government (at all levels) is also beginning to reimagine itself. The Obama campaign demonstrated the power of technology to enable self-organization in a campaign context, now we’re working through the implications of this kind of mass connectivity on governing itself. Catalyzed by Tim O’Reilly’s advocacy of “Government as Platform,” gov2.0 has become a rallying cry for transparency, participation, and just better, smarter, government  – among people inside government and out. This week’s Gov2.0 Summit brings together public servants and technologists and advocates and organizers, many of whom are already working together to build the next generation of public intelligence systems and platforms for participation.

The Resilience Movement

The resilient communities movement stems from two different though related sets of ideas: one relating to security, and the other to sustainability more broadly.

• The U.S. Department of Homeland Security (DHS) is exploring Community Preparedness and Resilience in a variety of ways – the Community and Regional Resilience Initiative (CARRI), for example, reflects a partnership between DHS, the Department of Energy’s Oak Ridge National Lab, and a handful of communities in the Southestern U.S.
• The Institute of Urban and Regional Development at the University of California Berkeley (supported by the MacArthur Foundation) has established a Building Regional Resilience Network , which has published a variety of papers on different dimensions of resilience (environmental, social, economic).
• The Council on Competitiveness made the materials used in its Risk and Resilience workshop available to the public.

People are helping communities become more resilient outside the U.S. as well – parallel efforts exists in Australia, and a more locally-driven approach launched in England.

Smart Communities

Firms like Cisco are promoting smart cities from a data-connectivity point of view, and IBM is advancing its “internet of things” agenda. But people and processes matter just as much. The stakes are high, the promise, great, and the need, urgent. Brookings is tracking the impact of the American Reinvestment and Recovery Act (ARRA) on cities and regions seeking to advance innovation or leverage structural change. Rosabeth Moss Kanter and Stanley Litow offer a manifesto for smarter, more connected communities.  John Hagel, John Seely Brown and Lang Davison’s Big Shift focuses on change dynamics in firms, but their analysis offers insight relevant to communities, too.

Going Forward?

We’re taking a good look at this context in an effort to learn from others, and focus our efforts in ways that maximize impact.

We believe in the power of not just tinkering, but “…unbundling and reconstituting…”
– Don Tapscott

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Beets in Detroit by ellievanhoutte

Unemployment in Macomb County

I recently met with a Macomb county commissioner whose district is embedded in the metro Detroit region of roughly 5 million people. The commissioner was concerned because, despite state unemployment in excess of 15%, county unemployment exceeded 16%, and pockets in her district face rates as high as 25%. “We’re heading toward a brick wall,” she noted.  ”We just don’t know when we’ll hit.”

What New Jobs?

The commissioner voiced concern about moving forward job training strategies when, really, the potential for new job creation has no hope of matching—even remotely—the rate of job loss. “I  sometimes actually wonder if we should do what New Orleans did and offer to help people relocate to places with more opportunity.”

Exclusive Collaboration?

This commissioner, like so many public officials, economic and workforce developers, community organizers, and even citizens, is overwhelmed by the immensity of the employment challenge in Michigan and daunted by a lack of public resources to make a difference. “I know there’s the Recovery Act—I just don’t know what we’re getting out of it.”

Moreover, she expressed confusion over facing these challenges in a large geographic region where, certainly, people are working overtime to shift economic gears, but the results are dispersed, and her constituents are her neighbors who don’t see a direct or immediate benefit.

Home-grown Efforts

She knows about a host of home-grown efforts, including the New Economy Initiative (NEI), Road to Renaissance, and others, she just don’t know anyone who is part of these efforts. How can she connect? She can’t be everywhere at once. How can she learn whether and where her county benefits from these efforts?  Is it enough for community “big dogs” to drive community change, and can they do so successfully—or at least meaningfully—without bringing other community stakeholders on board?

Resilient Outcomes and Communities

Having a resilient community means recognizing the importance of social capital and having an engaged and informed community, both organizationally and individually. People at all levels need to feel they are contributing to solutions or, at the very least, feel in touch with them, and there are many ways to do this:

• IdeaMinnesota is an effort of the state community foundation, which has asked community residents to share their ideas to address community problems and has agreed to fund the best ones.
• “My Region” in central Florida has asked community members, “How shall we grow?”  Roughly 20,000 people have responded through surveys, videos and other means, and many have invested out-of-pocket in the effort, which has driven several community-change initiatives.

Michigan’s Defining Moment has engaged 2,000 people in outreach efforts to express their views on Michigan’s future. And One D’s online scorecard allows organizations to show how their efforts are moving forward key community indicators. How can these efforts be channeled to engage regional community stakeholders in thinking about solutions for the region’s future but in conjunction with stakeholders like NEI that are investing resources in solutions to improve it?

Solutions-driven engagement

Some fear that community engagement may open the door to unwarranted critique and judgment, but the alternative could remain the sense of disconectedness and concern like that expressed by our county commissioner.  And, yes, community engagement is time intensive and difficult, but investing in it is questionable only if viewed as an end in itself.  The ultimate goal in engagement should be to connect real people to the development of real outcomes and solutions and, ideally, investment in them.  This will give participation true meaning and foster a sense of pride and ownership in the outcome.

After all, is innovation really game changing if only some people feel part of it?

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