The global economy has changed fundamentally in recent decades, and the ways that we have traditionally approached economic development no longer work.
We are in a transition from an Industrial Society to a new, more organic society and economy. Fundamental principles of thinking and organization are not just reforming, but transforming. Reformation is about improving ideas and methods that have existed for many years. Transformational change redefines institutional structures and challenges their undergirding principles.
The weak signals of the next iteration of an economic system are beginning to emerge. Economic developers—individuals and organizations who are generally responsible for promoting and sustaining their communities’ prosperity (good jobs, good homes, good schools, good infrastructure)—must be able to juggle multiple and rapidly changing priorities, accommodating both short-term and long-term perspectives. They’re responsible for attracting and expanding business, developing a workforce capable of continuous innovation, and facilitating collaborations, among other interrelated challenges and opportunities.
The goal of economic development in this new environment is to help new knowledge emerge. The connection of new knowledge to new resources in the creation of transformational projects will seed what we call a Creative Molecular Economy. It is molecular in the sense of working with the smallest units of organization; it is organic in the sense of mimicking biological systems and processes.
As we emerge from the recent recession, it is clear that we must endow our communities with greater economic resiliency. We must prepare them for a different kind of economy that will require the ability to adapt to constantly changing conditions. And this resiliency cannot be achieved through just reforming the current practice of economic development. In other words, we can’t just tinker at the margins.
Adding to the complexity of community development over the next 20 years are three different types of economies that are now in churn and mixed together:
The first is the very last stages of the old Industrial Age economy based on hierarchies, economies of scale, mechanization, and predictability.
The second is a transitional economic phase called the Knowledge Economy, which was recognized a decade or so ago and is based on knowledge creation and diffusion.
Finally, this transition phase is reaching its maturity and will quickly shift within the next 10 to 15 years to an emerging Creative Molecular Economy. Biological principles—such as interdependence, systems thinking, and designing parallel processes—will form the framework for how this new economy will be organized and operate.
Preparing for success in this new economy will require leaders who are open to new ideas and who understand the challenges of transforming their approach to the future. Economic development must become comprehensive community transformation in order to address the following questions:
And the list goes on.
Addressing these challenges is no small task for economic developers in collaboration with other community leaders. It will not be easy. There is no template, model, or standard operating procedure to guide the journey.
Since the profession first developed in the late nineteenth century, economic developers have primarily been focused on two functions: (1) attracting and expanding business and industry, and (2) more recently, business creation.
The Industrial Society brought with it the term jobs, so attracting jobs into the local community, region, state, or specific geographic boundary became the key focus of the economic developer. And thus it has been until more recently.
The profession rocked along for years until the weak signals of change in jobs provided per business relocation began to occur in the 1980s. Over the last 20 years, the number of jobs created per recruited business has declined.
Impacting this is the projection that, by 2015, only 4%–8% of all the jobs in the United States will be in manufacturing. Both the number of start-ups established per year and the number of jobs provided per start-up have fallen over the past 20 years, according to a 2011 Kauffman Foundation study, “Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation.”
The confluence of these and other trends and weak signals reflects a continuous shift to a more digital, entrepreneurial economy driven by collaborative networks. This Creative Molecular Economy will be defined by the following:
The economic-development profession now has an opportunity to transform itself to meet the changing requirements of a Creative Molecular Economy.
The last 30 years in business and industry has focused on increasing productivity, lowering costs, and pushing for more consumption to drive economic growth. In that environment, economic developers could focus on competing with other places to attract, retain, and expand business within their specific geographic areas. This is done primarily through offering incentives to lower costs, providing necessary infrastructure, finding access to financing, and expanding worker training.
It was a natural fit for the special expertise needed in an economic system where specialization was the norm.
We are now moving into an age of dynamic connections and disconnections: The economic vitality and sustainability of any economic-development jurisdiction—be it a local area, region, or state—will be based on the agility and effectiveness of decision-making processes affecting the workforce, capital availability, and the educational system.
Hierarchies will give way to interlocking networks; standardized processes will give way to multiple methods; and the need for predictability will give way to finding comfort with ambiguity and uncertainty, allowing us to identify newly emerging patterns from apparent chaos.
Economic development will increasingly be about building parallel processes where different people and organizations work in deep collaboration to help each other succeed—not just in individual communities, but across the globe as well. True transformation will not occur unless many projects, programs, processes, and people are involved in a totally new system of dynamic, adaptive planning and execution.
This emerging context of a new society and economy offers—perhaps requires—economic developers who realize that only a system with processes of community transformation will provide a healthy economy, and that their local communities, by themselves, may not yet have the types of leaders who are able to build “capacities for transformation.”
It also requires economic developers who are truly visionaries. This means individuals who can move from a commercial culture centered on economic materialism to a transformational culture that fosters a healthy economy and society based on continuous innovation, openness, and collaborative interlocking networks.
So economic developers will now need to expand their focus beyond creating jobs to building better places in which to live, work, play, and run a business. And it means developing their citizens into a Future Forward Workforce—i.e., agile workers who can take advantage of opportunities anywhere in the world without abandoning their communities, and who can move in and out of the three types of economies at will.
This Future Forward Workforce will be critical to sustainable economic health in future communities. Within the next 20 years, the largest corporation in the world may employ no more than 1,500 people, whose roles will be to facilitate networks of free agents and start-ups. By 2040, up to half of the workforce may be working from their homes for employers who may be on the other side of the world.
But these workers will still be shopping, playing, and raising their families in communities that depend on their individual vitality and viability.
Economic development will thus be as much about developing citizens, workers, and institutional structures that are able to adapt to constant change as it has been about the physical or cultural amenities that lure new factories or corporate headquarters away from other places. Instead, the goal will be to ensure that individuals develop the capacities they need to be involved with and adapt to a constantly changing economy based on creativity, deep collaboration, and connectivity.
Individuals in the Future Forward Workforce will become responsible for their own economic capacities, including:
Communities can promote this Future Forward Workforce by promoting collaboration: Self-interest and community interest are one, because self-adaptive systems need to have individuals working together. The culture must promote continuous innovation—and foresight skills in recognizing and adapting to change.
A Future Forward Workforce needs to be able to adapt to constant change, so developing that capacity will require moving education systems beyond traditional educational theory and practices to transformational thinking and action. Community colleges will become even more important in creating a culture of continuous innovation in local communities.
Key ideas of Transformational Learning are:
Many local leaders are unfamiliar with trends and weak signals. As a result, they are not able to develop effective strategies for dealing with emerging issues.
Now, with the advent of smartphones, GPS systems, cloud computing, and more, citizens can instantly access and share knowledge and opinions with each other and with their governments—a phenomenon that will reshape how our society operates.
This eventually will lead to a new concept, “mobile networked governance.” Community leaders will develop knowledge-connection processes that harness the vast resources of disparate community members. We’ll soon see a shift from radical individualism to many new levels of deep collaboration. Ultimately, this mobile networked governance will be transformational, creating a new decision-making structure that engages as many people in the community as are interested.
Change is scary for many people, and something to be avoided if possible. As a result, leadership by economic developers is an absolute necessity to help communities understand the need to build capacities for a Creative Molecular Economy using the concepts and methods of comprehensive community transformation.
Growing beyond the context of our current economic development system, three levels of interlocking networks will emerge: regional, state/provincial, and national.
Within each are community-level collaborations. These areas can work both individually and in collaboration with others to promote systemic community transformation. As important, they can create interlocking networks of interested economic developers who are willing to become Master Capacity Builders, or Transformational Leaders.
Master Capacity Builders complement traditional leadership. Traditional leaders focus on concrete outcomes in the short run. Master Capacity Builders learn how to build capacities for transformation in people, groups, and communities, enabling them to adapt to constant change over the longer run.
Traditional leaders focus on projects, linear processes, and quantitative measurement. Master Capacity Builders focus on helping people learn how to shift their thinking, consider issues within a futures context, and build parallel processes so that true transformational change can emerge.
The Center for Communities of the Future has worked with a wide variety of community leaders to meet their specific economic-development needs. Several examples of this work are highlighted exclusively on the World Future Society Web site:
Economic developers who are a part of developing a culture of continuous innovation must be simultaneously involved in multiple concepts of economic development (including traditional business and industry attraction) as they learn this new approach to preparing local communities for a different kind of future.
There is no magic wand that will move us from old-school transactional economic development to the new world of never-ending transformation. Linking the two is a necessary transitional process. Economic developers have a critical opportunity and responsibility to make this happen.
The role of an economic developer is, itself, in transformation. No longer merely a recruiter of business and industry, a twenty-first-century economic developer will need to become a futurist as well as a facilitator of connections of ideas, people, and processes in comprehensive community transformation. As Christopher Meyer and Stan Davis argued in It’s Alive (Crown Business, 2003):
Connectivity in the environment has accelerated change and increased the volatility in the business environment. Business must respond with more rapid and varied adaptation, and will experience fewer periods of stability in which efficiency is the dominant source of economic health.
Founded by futurist Rick Smyre and based in North Carolina, the Center for Communities of the Future is a global network of individuals and community organizations collaborating to develop new tools for governance, economic development, education and learning, and leadership to improve citizens’ ability to cope with a rapidly changing world. For more information, visit www.communitiesofthefuture.org.
LaDene Bowen, associate director, Institute for Decision Making, Northern Iowa University, Cedar Falls, Iowa.
Ronnie Bryant, president, Charlotte Regional Partnership, Charlotte, North Carolina.
Jim Damicis, senior vice president, Camoin Associates, Scarborough, Maine.
Scott Gibbs, president, Economic Development Foundation of Rhode Island, Cumberland, Rhode Island.
Norma Owen, president, Avadon LLC, The Colony, Texas.
Rick Smyre, president, Center for Communities of the Future, Gastonia, North Carolina.
Mark Waterhouse, president, Garnet Consulting, Woodbury, Connecticut.
The Fayette County, Georgia, story started with a simple question that emerged from a chamber board retreat: What must chamber leadership do to ensure that the organization will continue to be relevant for the future?
From that question emerged a new focus: How can the chamber grow from a successful event planning and networking organization to a dynamic entity at the center of a collaborative and transformational community movement? How can the organization bring people from disparate functions across the community together to think, learn, and develop new systems and processes to prepare Fayette County for a rapidly changing economy?
Step one involved a year-long process of transformational leadership development. The chamber brought together 30 leaders representing large and small businesses, K-12 and university leadership, economic developers, nonprofits, and civic leaders to study Master Capacity Building principles with Rick Smyre, president of the Center for Communities of the Future (COTF).
The group learned about systems thinking, parallel processes, “and/both thinking,” and the process of creating interlocking networks. Most importantly, they saw firsthand the power of framing any issue or dialogue within a futures context. The group moved from trying to find the one right answer or the “silver bullet” to finding possibilities and innovative approaches never before imagined.
Upon conclusion of the formal instruction, roughly half of the Master Capacity Builders continued to meet informally and began to develop self-organizing efforts to seed collaborative, future-focused projects in the community.
One of the first examples was a “Future Fayette 2030” art and science contest for high-school students, sponsored by the Rotary Club. Students were asked to envision Fayette County in the year 2030 in areas such as health, transportation, recreation, and energy and to share their vision through a model or artistic representation. Entries were displayed to the community at the chamber’s annual EXPO tradeshow. The first year’s winning entry was “Dr. John,” a smart toilet that could instantly analyze key health metrics and communicate instantaneously to an individual’s doctor or caretaker. The contest was a wonderful inaugural effort to bring youthful innovation together with a traditional community event like the EXPO.
Another example of a collaborative and future-focused project is an ongoing series of Community Conversations hosted by the chamber for alumni of their 30-year-old leadership development program, Leadership Fayette. These conversations bring a panel of thought leaders together to begin a dialogue with the Leadership Fayette alumni and others in the community on emerging trends or concepts central to Fayette’s future.
The first such conversation included a panel composed of the local school superintendent, university president, technical college president, an industry leader, and a young professional, brought together to ponder the question, “How can we prepare students for careers that don’t yet exist?” The meetings have been designed to connect ideas, people, and new processes or methods with critical community functions like education and economic development.
While Fayette County’s transformation to a Creative Molecular Economy is still in its infancy, the framework for creating innovative and future-focused points of engagement for the community have been seeded and the momentum is tangible.
Virginia Gibbs is president and CEO of the Fayette Chamber of Commerce, Fayetteville, Georgia, www.fayettechamber.org.
The Institute for Decision Making (IDM) at the University of Northern Iowa has traditionally been a Midwest leader in community visioning and strategic planning. The institute provides community and economic development technical assistance and applied research to communities and organizations in Iowa and beyond.
Founded in 1987, IDM began five years ago to prepare rural community leaders for the new challenges of comprehensive community transformation through three major projects:
1. County-wide education about future weak signals and a parallel-planning process for county government.
2. The development of a core group of economic development leaders in a five-state region who were coached in new leadership concepts, connecting new knowledge to new resources and methods that relate to community transformation.
3. Ongoing incorporation of adaptive planning into IDM’s visioning and planning model.
With the assistance of futurist Rick Smyre and the Center for Communities of the Future, the planning project started by painting a picture of the 2028 future for community and government officials, community leaders, and interested residents. The adopted vision continues to be the driving focus of Black Hawk County government, and no budgets are approved until each county department submits short-term plans tied to the vision.
An excerpt from the county’s adopted vision statement includes the following passage:
Transforming How We Lead
By 2028, we help each other succeed by attracting and using a diversity of talents and competencies in a transparent manner. We develop talent of all ages, enabling effectiveness and collaboration in decisions and action. We think innovatively by linking ideas and people in new ways. We join with people from all neighborhoods to develop shared vision and learn of emerging trends. Together, we work to prepare our communities and governments to adapt long term, plan short term, and take action daily.
IDM’s second project was to become the Mid-Central Node for an evolving community and economic-development network to help new knowledge emerge. Six economic-development leaders from five Midwest states agreed to be a part of a leadership team for a Global Rural Network. The initiative attempted to create a network of individuals interested in the future of rural development, recognizing that, in this new economy, new skills and thinking would be required to be successful.
The third IDM initiative, ongoing, is to play a proactive role in incorporating many of the comprehensive community transformation concepts into IDM’s services to communities and organizations.
IDM has also made adjustments in its planning model to incorporate a parallel-planning process and to better position communities to embrace adaptive planning.
LaDene Bowen, a certified economic developer, is the associate director of the Institute for Decision Making, University of Northern Iowa, Cedar Falls, Iowa, www.bcs.uni.edu.
Communities face numerous challenges when it comes to creating and attracting jobs, producing wealth, and fostering economic opportunity. Too many communities are caught in the trap of focusing on job relocation or industrial recruiting as the cornerstone for economic development.
McAllen, Texas, is taking a different approach based on the emergence of a Creative Molecular Economy (CME), a term and concept pioneered by the Center for Communities of the Future. The figure at right shows how the McAllen Chamber has transformed its approach for creating wealth and economic opportunity by developing a “bio system” of innovation. This new approach connects multiple ideas and programs to create small business economic development opportunities and a flywheel effect of momentum for the development of entrepreneurs, innovation, and small business start-ups able to compete in a global economy.
Of key importance is the creative use of networks, including a unique community called Inventors and Entrepreneur Network (I&E Network). A monthly meeting brings together inventors and business creators to connect and start “stuff.” Ideas that emerge from the I&E Network can be funded in two ways: through the chamber’s Innovation Grant Program (providing up to five $10,000 grants per year) and through the community’s business plan competition. These two sources fund start-up needs such as patent search, prototype development, market research, testing, and other services that can move an idea to a pre-launch stage.
The McAllen CME Innovation Model is unique in several ways. Prospective innovation applications and business plan competitors are required to complete two different phases of “venture ready” software that help the entrepreneurs assess their readiness for market. Once the assessment is complete, the ideas are ready for competition and selection. The process is competitive and based on viability and prospects for success. As products or ideas move forward, other funding sources are identified through crowd funding or local angel investor networks. The goal is to have ideas or products that have been polished and have a realistic chance to succeed or to get serious consideration for funding.
Another key part of the CME Innovation Model utilizes a business accelerator concept designed to get an idea developed or dropped quickly, before too much time and energy is spent. Entrepreneurs see this part of the process as critical for the chamber’s and program’s credibility. A Makers Faire will be added to this CME Innovation Model in 2012 to connect entrepreneurs, ideas, and emerging products more quickly.
Clients are encouraged to become comfortable with uncertainty, ambiguity, and nonlinear activities. Stops, starts, and changes in ideas and direction are central to this innovative process. Old rules are no longer applicable in today’s volatile global economy. In the future, economic success will be measured by how fast new opportunities can emerge from connecting and disconnecting people, ideas, and processes. If one looks beyond the horizon to find economic innovations for a Creative Molecular Economy, the leaders of McAllen, Texas, will be found.
Steve Ahleniusis president of the McAllen, Texas, Chamber of Commerce, www.mcallenchamber.com.
The Economic Development Foundation of Rhode Island Inc. (EDFRI) is planning the launch of an online crowd-sourcing platform to spark a more inclusive idea-innovation process to advance sustainable economic health in the Ocean State. This crowd-sourcing initiative reflects EDFRI’s position that the economic development profession and system are failing to adopt new organizational models and strategies in response to radical changes in the global competitive environment.
This new initiative, branded as RIdeation, is directed at transforming the organizational silos, inefficiencies, and ineffectiveness of Rhode Island’s existing economic development culture into an open culture that supports continuous innovation.
EDFRI’s RIdeation effort is one key part of a new system for transforming economic development based on the work of the Center for Communities of the Future to seed systemic change through comprehensive community transformation. The idea of crowd-sourcing as one element of an emerging Creative Molecular Economy was introduced at the Northeast Economic Development Association’s Conference in Providence in October 2010. RIdeation is the first practical application of crowd-sourcing economic development in the United States.
Three economic development challenges will be presented every quarter. The crowd-sourcing platform will enable the posting of original ideas in response to each challenge. Interested individuals will form self-organizing networks to work on further development of these ideas, which will be ranked by the crowd; the winning ideas will then move to an online idea planning stage for eventual execution.
EDFRI will offer small financial rewards for proponents of the winning idea. EDFRI can also serve as an idea investment broker to accelerate the innovation process by matching winning ideas with suitable organizations for implementation.
Building an open-source economic development culture in Rhode Island is arguably a prerequisite to building trust, collaboration, and information sharing among the state’s economic-development stakeholders. Success in an economy and society of constant change will be defined by how quickly new ideas can be identified, connected, and implemented.
EDFRI envisions a future economic development organizational model that can adapt to constant change. Such a model will be based on a network of economic development service providers who are focused in specific core competencies and able to collaborate at a deeper level to provide market-leading innovations for customers. A shared computer and information technology platform, along with various software applications for customer relationship management, business resource matching, and other information matching services, will support the envisioned Rhode Island Economic Development Network. RIdeation will be integrated into the technology platform to support continuous collaboration and innovation.
EDFRI views its proposed initiative and organizational vision as a test case for possible replication throughout the various regions and states in the United States. Reinventing the economic-development process is necessary, as local and regional economic challenges grow in an environment of declining public resources.
Scott A. Gibbs is president and Marcel A. Valois is vice president of the Economic Development Foundation of Rhode Island Inc., www.edf-ri.com.
Wake Technical Community College in Raleigh, North Carolina, has collaborated with the Center for Communities of the Future (COTF) to explore the emerging concept of a Future Forward College. Working together for more than six months, the team of deans and department heads identified these key ideas as the basis for a Future Forward College:
The final concept — Future Forward Workforce — will be the key to the future economic sustainability and vitality of any community. It emphasizes the need to prepare students to adapt to the varied requirements of the Industrial Economy, the Knowledge Economy, and an emerging Creative Molecular Economy.
The Future Forward Workforce will require these skills:
The development, expansion, and success of a Future Forward Workforce depends on transformative changes in education at all levels. Wake Tech and other visionary community colleges are creating the flexibility and adaptability necessary for newly emerging economic demands and a transition in workforce needs. This effort could make such colleges strong models for transformational education in this era of constant change.
With a 50-year history of business–education partnerships, Wake Tech is moving such partnerships into a “futures context,” launching a Center for Strategic Futures with support from SunTrust Bank. A speakers forum hosts thought leaders who engage in lively dialogue with students and faculty on ideas relating to the future of education, workforce, and economic development. The Center’s goal is to create a culture of future-thinking students, staff, and faculty.
These conversations have encouraged instructors to develop futures-directed assignments and projects. The informally organized Futures Forward Faculty group is developing new approaches to teaching and learning that will encourage students to prepare for careers that require adaptive, creative workers. The interdisciplinary group itself is dynamic in number and makeup, and students are engaged as frequently as possible as partners in project development.
One course in development is a futures course, where students would learn techniques of adaptive planning and trend identification. After hearing from experts (faculty and professional) on issues ranging from natural resources to microeconomics and green technologies, small groups would focus on specific challenges like transportation or housing, then develop plans for addressing issues that might arise in the next 20 years within a “futures interdisciplinary framework.”
As a national leader in the Future Forward College idea, Wake Tech will play a key role in a national network with other community colleges, including Henderson CC in Henderson, Kentucky; Muskegon CC in Muskegon, Michigan; Tarrant County College in Dallas, Texas; and UDC–CC in Washington, D.C.
Steve Scott, credited with coining the term Future Forward College, is president of Wake Technical Community College in Raleigh, North Carolina, www.waketech.edu.
Carol Cutler-White is vice president for Federal Funds at Wake Technical Community College.
Benita Budd is an English instructor at Wake Technical Community College.