Open Source Economic Development: A Glossary

1. An Introduction to Open Source Economic Development
2. Changes in our economy hit home
3. Moving from a First Curve to a Second Curve economy
4. The Urgency of Open Innovation
5. New, Networked Approaches to Economic Development
6. Building an open civic process: Strategic doing
7. The emerging role of the civic leader
8. The importance of mapping our networks
9. Mapping and aligning Second Curve networks

10. Open Source Economic Development and Web 2.0

11. Open Source Economic Development: A Glossary

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A glossary of terms for Open Source Economic Development

Cluster

A cluster is a network of firms and organizations within a geographic region that provide products and services to a related group of markets. Clusters operate as open innovation systems in which participants regularly share ideas and resources.

Innovation

Innovation is the process of converting ideas into wealth. It involves the introduction of a new or significantly improved product or service to the market, or the introduction of a new or significantly improved process within a business. Innovation can be the result of the introduction, adaptation or adoption of new knowledge or technological developments. It can also be the result of the combination of existing technologies in a new business model.

Traded Business

A “traded business” represents a business that generates more than 50% of its revenues from customers outside a region. In economic development, a traded business imports income into a region. Typically, traded businesses pay higher wages than firms that serve a local market.

Sheltered or Local Business

A “sheltered business” circulates income within a local or regional economy. More than 50% of its customers are local. Sheltered businesses typically contribute to the quality of life of a regional economy.

First Curve Businesses

These traded businesses arose in the industrial age. Their business model depended generally on the control of cost and building economies of scale through volume production and vertical integration. By building volume and a relatively low cost position, the largest companies became the most profitable.

Second Curve Businesses

These businesses represent a new generation of firms that integrate knowledge and information into their products and services. Indeed, they blur the distinction between products and services. These businesses build value based on networks, and they achieve their scale through networks. These firms rely on innovation (top line growth) to power their business models.

Brainpower

Brainpower represents mental ability. Recent advances in brain science reinforce the notion that our brains continuously change throughout our lifetime, and that early childhood experiences are especially important in determining long term mental ability. The neural networks that form the “hardware” of our intelligence increase with use and decrease with disuse.

Quality, connected places

Quality, connected places refer to built environments that reflect principles of high quality design and sustainability. For example, quality neighborhoods are distinctive, accessible, diverse, linked to other areas, and environmentally friendly. Quality commercial districts include distinctive, balanced and linked mixed uses. In addition, broadband access has become a critical component of quality, connected places.

Collaboration

Collaboration represents a process of joint decision-making that achieves collective results beyond what participants could accomplish working alone. Collaboration involves a range of activities, including communication, information sharing, coordination, cooperation, problem solving, and negotiation. Collaboration implies innovation and breakthrough results.

Entrepreneur and innovation networks

These are informal networks within the region that accelerate business development. If these networks are weak, business development, measured in the rate of business formation, is relatively low. In contrast, regions that aggressively and continuously build these networks have economies characterized by innovation, flexibility and resiliency. The networks effectively move resources – people and money – to areas of the greatest opportunity.

Branding

Branding represents the civic process by which a region explicitly manages the stories that leaders use to describe the region to residents and outsiders. Branding involves describing experiences with these stories. Effective stories shape perceptions and alter behavior. Community or regional branding relies on these stories to build a platform from which different marketing campaigns are launched.

Web 2.0

Web 2.0 is an umbrella term for a basket of technologies that enable users to exploit the interactivity of the Internet and the World Wide Web. These technologies include web-based applications capable of replacing desktop applications for many purposes.