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- An Introduction to Open Source Economic Development
- Changes in our economy hit home
- Moving from a First Curve to a Second Curve economy
- The Urgency of Open Innovation
- New, Networked Approaches to Economic Development
- Building an open civic process: Strategic doing
- The emerging role of the civic leader
- The importance of mapping our networks
- Mapping and aligning Second Curve networks
- Open Source Economic Development: A Glossary
The Urgency of Open Innovation
To understand the challenges ahead for our communities, regions and states, we need to step back and get a clear picture of the dynamics of economic development. The easiest way to understand how an economy works is to divide the money flowing through it into three parts: good, neutral, and bad.
Good money flows into the coming from the outside. This money comes from businesses which trade with customers outside our state. These so-called “traded businesses” are vital, because they inject to new money into our economy. The wages generated by these traded businesses tend to be higher.
Neutral money
flows through businesses on that circulate money within our economy. We
can talk of these firms as “local businesses.” When economists talk
about a “multiplier,” they are referring to how well money circulates
among these local businesses. These businesses also make major
contributions to our quality of life. They represent our local
retailers, cultural organizations, and tourism businesses.
Bad money represents money flowing out of our economy from purchases we make outside and from people who leave.
The strategy of economic development is straightforward:
- Increase the volume of good money;
- Increase velocity of neutral money; and
- Reduce the flow of bad money.
These basic tenets of economic development have not changed. However, the strategies we employ to translate these principles into action have changed dramatically. In the past, most communities and states relied almost exclusively on business recruitment as a way to expand good money flows. This may have worked well as a First Curve strategy, but as a Second Curve Strategy, its impact will be limited.
As the networked, global economy emerges, we need to play to our strengths. We will build our good money flows by building innovative businesses. Recruitment still has a role to play, but a far more important challenge comes in building collaborations to tie together the extraordinary assets in our communities and regions. A globally competitive strategy means building clusters. Building clusters means building open networks of innovation. Every town, every county, every region, and every state can follow this approach to build its prosperity.
