The practice of economic development is like driving using only the side view mirrors – you can’t even see exactly where you’ve been, but you can see the edge of the path you’ve been taking. We try to guide ourselves forward with tools that are built for where we’ve been. Part of this rear-view navigation results from using a lot of tools that were developed to fix the problems of the past. But it is also because we have very little useful predictive information about the future. The majority of economic data is old. If we have any information about what happened even a month ago, it is somewhere between a guesstimate and an approximation of the actual conditions. By the time we manage to collect and verify the best information we can get, it is still incomplete and its shelf-life is expired. Despair.com makes a poster, “Economics: The science of explaining tomorrow why the predictions you made yesterday didn’t come true today.”
So while we can’t do a very good of predicting where the economy is headed, there are some trends coming up in our side view mirrors that are closer than they appear, or already passing by. Continue reading “3 Economic Development Trends that are Closer than they Appear”
We are celebrating our 3rd corporate birthday this week and it provides an opportunity to reflect on what we’ve learned. First, the pace of economic and community development continues to quicken as major global shifts drive business and social planning. Three years ago we were all worrying about the long-term impacts of the great recession, as unemployment was 9.6% with little sign of an end. Today, in many sectors we are working on strategies to not just keep the domestic jobs growing but also to bring them back by ‘making it in America’. As we have been saying for the past three years, the economic and community development toolbox must expand to include new models of planning for place, new types of infrastructure, and most importantly the people in our communities. Continue reading “Three Lessons Learned in the Past Three Years”
One of the most influential and widely pursued theories in economic development has been the use of industry clusters, or simply clusters, to focus services in a regional economy. This approach allows communities to consider the needs of interconnected firms and define a focus. What it fails to do though is to contemplate potential impacts on these clusters, both positive and negative, by market dynamics. As a result, the practice of using industry clusters as an economic development strategy is an approach that has run its course.
The Fourth Economy team has long been involved in developing and implementing cluster strategies and we have come to appreciate the advantages and disadvantages of the cluster approach. Along the way, we have developed methods, tools, and best practices that we believe can help regions to more effectively leverage their potential for economic prosperity. In this article, we first review the pros and cons of clusters and then discuss a modern approach that we call Market Opportunity Networks, which retains the advantages of clusters and reduces the disadvantages. Since 2006 members of the Fourth Economy team have been developing this methodology and demonstrated success with a number of clients. Continue reading “Market Opportunity Networks: Advancing Economic Development Strategy”