Collaboration vs. Competition For Economic Growth

Lots of talk about the economy focuses on how individual businesses compete.  Generalizing from the situation of individual businesses, public officials who are responsible for the overall growth of their local economy also often talk about competition.  Making their cities “competitive in the world economy” or enabling their “residents to compete" are frequent phrases you hear.  

And they worry about where they stand in the competition with other cities.

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Even in today’s global economy, the biggest cities still envision themselves as standing alone, in competition with all other jurisdictions.

And, of course, with cash, tax and other incentives, local economic development officials will try to steal – i.e., compete – with distant or even nearby jurisdictions.

Granted that sometimes the word “competitive” is used merely to mean prosperous or good or something else positive.  But the use of the metaphor of competition can be misleading, even in those cases.

The fact that individual businesses often find themselves competing with
each other doesn’t mean that regions as a whole thrive by focusing on
competition with other regions.

Getting back to basics, an economy grows as people develop and exchange
specialized services/products and, in various ways, create new ideas and
services/products.  The better connected and more collaborative the residents of a region are with everyone else, the more likely they are to be creating more wealth and income for themselves.  This means that
overall economic growth of a region is much more about collaboration than
competition. 

The value of collaboration has begun to be heard
in some parts of the economic development profession. For example, John Jung, Chairman of the Intelligent Community Forum (ICF), wrote “Collaborative Innovation – the New Competitive Edge for Economic Development”.  From a conference on Global Competition and Collaboration in 2011, there was “New Building Blocks for Jobs and Economic Growth”.  The Wharton School at the University of Pennsylvania affirmed this idea: “We Need More Collaboration And Less Competition For Economic Growth”.

Unfortunately, most of the huge global cities have not yet seriously adopted this approach.  In contrast, an increasing number of smaller cities, towns and rural areas have come to the realization that they have a better future if they cooperate, collaborate and network.  

An interesting example is Mitchell, South Dakota, which has 15,000 people, but was among ICF’s Top 7 Most Intelligent Communities this year — among cities like Rio, New Taipei and Columbus Ohio.  They were in trouble a decade ago.  They had lost 30% of their population, especially young people, like many other small communities in the countryside.  

Mitchell turned that situation around.  They have three Internet service providers that deliver gigabit bandwidth.  They’ve seen the growth of tech companies and precision agriculture.  Their unemployment rate is 3%, with hundreds of open jobs.  Unusual for a small city, it has its own workforce development director.  

At the recent ICF Summit in Toronto, Bryan Hisel, Executive Director, Mitchell Area Development Corporation, put it simply: “entrepreneurship is our way of thinking here.”  So the leaders of Mitchell view their small size as an advantage, not a disadvantage.  That entrepreneurial culture of its people came before they had broadband.  

With that entrepreneurial spirit, you’d think that Mitchel is all about the competition.  But Hisel pointed out that all the things people elsewhere have started to talk about — especially collaboration — comes naturally to small communities.  So Mitchell has extended its service to nearby communities and even provides advice to small cities that others might see as competitors.

Perhaps the tradition of collaboration in parts of the countryside is also why there was increased interest at the summit in my proposal for a global virtual metropolis that connects small cities like Mitchell – a connection for economic success that arises from collaboration rather than competition with one another.

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© 2015 Norman Jacknis

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Main Street Stores Need A Tech Upgrade

Many small towns wish they had a big box store of some kind as an answer to the retail needs of their residents.   The owners of Main Street stores, of course, worry about big box stores.  After all, Walmart grew into the colossus it is today by first serving the small town and rural market.

Then the growth of Amazon and other e-commerce companies just made things worse for bricks-and-mortar stores on Main Street.

Some stores have sought to survive by focusing on especially narrow niches or creative, quirky products.  But this hasn’t been enough to replace all the retail business that has been lost.

Of course, local leaders and economic development officials just want to revive their main streets somehow – and making the stores their viable is part of that revival.

Meanwhile, the retail business is shifting and using space to create exciting and entertaining environments inside the store, rather than stocking up as much inventory as they can.  

Stores in small towns need to jump ahead and aggressively adopt the new retail technology.  There are some interesting examples of technology that could be used in these Main Street stores.

Adidas built a virtual wall which shows off all of their shoes, lets shoppers see them at all angles and purchase what they want, which can be delivered later.  It amounts to a limitless inventory for a small store.

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Using an approach several companies have taken, Ray Ban has a virtual mirror that will show how a pair of sunglasses looks on your face.  

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Similarly, there are variations of virtual mirrors that let you see how a particular item of clothing looks on you before you buy – or perhaps even before the store orders it from the manufacturer.

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Since most small town stores can’t be open all the time, there’s always a way to allow shoppers to peek inside when the doors are closed.

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Projectors are a relatively inexpensive way of blending the virtual and physical in stores.  Sometimes they can be used to provide further information that a customer wants.

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And store owners of all kinds realize that part of what draws people in is just an entertaining environment.  So here’s another projection example that’s installed for pure fun.

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Finally, there’s nothing to stop a retailer with unique products – like art works – from taking pictures and putting those on the Internet for customers to see, both local and potentially worldwide customers.

Indeed, the retailers in small towns should take advantage of their greater agility than the big store chain behemoths.  That’s the way they will succeed and, in the process, help make Main Street more exciting to visit.

The lesson here is the same as for small towns and rural communities in general – the intelligent use of information and communications technologies can help them flourish in this century.  The impact, indeed, will be much stronger and more visible than it is in big cities.

© 2015 Norman Jacknis

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“You Belong Here” Says It All

Some of us live in places that are lucky enough to have some highly unusual feature that stands out – whether it’s the mountains in Colorado towns or the surf of Key West, Florida or even the sheer scale of New York City.  But unlike those examples, there are many fine places to live which have a high quality of life, but don’t otherwise have an obvious promotable distinction.  

The big question for these places is how to maintain and build on that quality of life in a century that raises new challenges to every place, as more people are able to earn a living no matter where they are – if there’s high-speed Internet connectivity available.

Consider the small city of Clinton, Mississippi.  It has a population of about 25,000 people and is near Jackson, the State Capitol.  Although it is a relatively old city in the state, having been created in the early 1820s, it was known as Jackson’s first suburb.   More recently, other more affluent suburbs have grown up around Jackson with high-end national stores in upscale shopping malls.  

While many small cities dream of having a Fortune 500 company, Clinton had already “done that, been there”.  WorldCom (later MCI Worldcom), for several years the second largest long-distance phone company in the US, made Clinton its headquarters location.  In the early 2000s, a major fraud and financial scandal was discovered at the company.  It went bankrupt in 2002 and after a while its nice headquarters was empty and the company’s assets were eventually acquired by a company far away, Verizon.  So Clinton was no longer a big company town.

Clinton has, however, retained much of its original small town urban charm, with a number of brick-covered streets and an urban center that’s mostly missing from other suburbs.   It has a well-developed sense of community, which is, in part, reflected in the quality of its schools that are ranked number 1 in the state.

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Nevertheless, the people of Clinton know there are challenges ahead, so they have been an early adopter of gigabit connections to the home, through a program offered by the regional telecommunications company, C-Spire.  The company announced at the end of last month that Clinton had five neighborhoods where pre-registration for the service exceeded the minimum necessary and Clinton becomes the second city in the state to become a gig-city.  

(See my earlier blog post about Quitman, MS, for a report on the first city to do this last fall.)

Thanks to the work of the Intelligent Community Institute of Mississippi State University Extension Service, there I was last week to talk to a room full of Clinton’s community leaders.  They met to envision how this gigabit network investment can be used to provide new economic opportunity for its residents and to ensure that the city can flourish in the future.

Of course, I pointed out that broadband, while necessary, isn’t sufficient.  It’s only the start in building an attractive 21st century community that will retain and, better yet, attract people to live there.

I presented a picture of where the economy and technology have come from and where they seem to be going – and what Clinton can do to get ahead of the curve.  I offered numerous examples of things that can be accomplished by a small city, pointing out that small cities can make a bigger impact this way than big cities.  After my presentation, Clinton’s community leaders worked together to identify concrete actions they would get done in the next six months.

I was struck especially by the city’s new slogan and campaign.  It was not the all-too-frequent argument that “we’re cheaper than the next city down the road and we’ll give your company big incentives to come here.”  Even before I arrived with my message that, instead, these days the key question for economic development is how you go about keeping people and attracting newcomers to your city, they had already figured it out.

I wish I had come up with their slogan, since it is spot on – “You Belong Here”.  I’ll be following up to see how Clinton goes about making good on that slogan and its promise for the future.

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© 2015 Norman Jacknis

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