Extension’s Vital Role in Open-Source Economic Development
Galaxy III Celebrating the Extension System: Strengths, Diversity, &
Unique Qualities September 17, 2008 – Indianapolis, Indiana
Scott Hutcheson, Assistant Program LeaderEconomic & Community Development
Purdue Extension
Economic Development 101
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Our Grandfather’s Economy
Wealth was built at a rate the world had never before experienced
First Curve – Wealth driven by vertical business models
The S Curve Caught Up with Our Grandfather’s Economy
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
The First and Second Curves
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
We live in an Open-Source World
We live in an Open-Source World
From Hierarchies to Networks
The 2nd Curve is Our Grandchildren’s Economy
Second Curve – Wealth driven by network business models
The job of our generation is to manage the transition between our grandfather’s economy and our
grandchildren’s economy.
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Open Source Economic Development
Linking and Leveraging
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Open Source Economic Development
No Single Strategy Many Strategies
OSED Strategies Are Asset-Based
2nd Curve strategies involve linking and leveraging assets in five “asset networks:”
– Brainpower– Innovation– Quality places– Community Stories– Civic Collaboration
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Success in the 2nd CurveCommunities will prosper in the Second Curve with balanced strategies that...
– Build world class brainpower– Translate brainpower into wealth through
innovation and entrepreneurship networks– Create quality, connected places where “hot
spots” can develop– Create new stories about the community– Continuously strengthen habits of civic
collaboration
Integration of Perspectives
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Building Word-Class Brainpower• Early Childhood• Pre-K• K-12• Technical programs• Community college• Universities• Workforce Development• Lifelong Learning
• Brainpower
The average community knows more about its solid waste system than it knows about its brainpower system.
Mapping Brainpower Flow
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
What is Extension’s Role in the Brainpower Game?
• Be seen as an Extension of the university – the entire university
• Bring STEM/SET resources to the community
• Bring stakeholders together to map the flow of brainpower
Innovation & Entrepreneurship
• Introduction of new products & processes each year
• Only 15% of businesses are typically innovators – usually have high growth trajectory
• When 50% of business are innovators you have an entrepreneurship/innovation culture
Innovation is Not Just “High Tech”
• A BBQ restaurant starts bottling and selling sauce
• A dry cleaners develops a new “green”process and licenses the new process
• A beauty shop develops a new way to train stylists and goes nationwide
http://www.acenetworks.org/upload_files/file/Regional%20Flavor%20June.pdf
A Tale of Two…• Entrepreneurs• Cities
A Tale of Two EntrepreneursA Tale of Two Entrepreneurs……and Two Citiesand Two Cities
• Founded in Washington (State) in 1971• Initial investment - less than $8,000• 2006 sales were $7.8 billion• Created 145,800 jobs• This is their founder
A Tale of Two EntrepreneursA Tale of Two Entrepreneurs……and Two Citiesand Two Cities
• Founded in Washington (State) in 1971• Initial investment - less than $8,000• 2006 sales were $7.8 billion• Created 145,800 jobs• This is their founder• This is their logo
A Tale of Two EntrepreneursA Tale of Two Entrepreneurs……and Two Citiesand Two Cities
• Founded in Washington (State) in 1971• Initial investment - less than $8,000• 2006 sales were $7.8 billion• Created 145,800 jobs• This is their founder• This is their logo
A Tale of Two EntrepreneursA Tale of Two Entrepreneurs……and Two Citiesand Two Cities
• Founded in Indiana in 1985• Initial investment - less than $2,000• 2006 sales were $1 billion• Created 14,743 jobs• This is their founder
A Tale of Two EntrepreneursA Tale of Two Entrepreneurs……and Two Citiesand Two Cities
• Founded in Indiana in 1985• Initial investment - less than $2,000• 2006 sales were $1 billion• Created 14,743 jobs• This is their founder• This is their logo
A Big Difference Between A Big Difference Between Starbucks and Papa JohnStarbucks and Papa John’’ss
A Big Difference Between A Big Difference Between Starbucks and Papa JohnStarbucks and Papa John’’ss
The Billion $ QuestionThe Billion $ QuestionWhat makes a community “sticky” when it comes to its entrepreneurs?
WeWe’’re finally beginning to learn re finally beginning to learn about Entrepreneursabout Entrepreneurs
Think of Innovation and Think of Innovation and Entrepreneurship as a HorseraceEntrepreneurship as a Horserace
Innovation & Entrepreneurship: A Horse Race
• The Horse – The Innovation
Innovation & Entrepreneurship : A Horse Race
• The Horse – The Innovation• The Jockey – The Entrepreneur
Entrepreneurship
• The Horse – The Innovation• The Jockey – The Entrepreneur• The Track – The Community
Community Support Systems for Community Support Systems for Innovation & EntrepreneurshipInnovation & Entrepreneurship
Taking Care of Taking Care of the Trackthe Track
The Innovation and Entrepreneurship-Supportive
Community• Supportive policy environment• History, culture, institutional memory• Attitudes about failure• Collaborative support organizations• Celebrate innovations andentrepreneurs• An information-rich environment
WhoWho’’s Job Is it to Tend s Job Is it to Tend to the Track?to the Track?
• Chamber?• LEDO?• Elected Officials?• Banks?• Schools/University?• Extension?
Economic Gardening
http://www.littletongov.org/bia/economicgardening/
Economic Gardening• Littleton, CO developed and began to
execute the strategy in 1989• Focused on “wealth” creation not “job”
creation• Eliminated all incentives and tax breaks for
business recruitment• Since 1989, more than doubled the
number of jobs from 15,000 to 35• Sales tax revenue tripled from $6.8 million
to $19.6 million
Economic Gardening
• Information• Infrastructure• Connections
Entrepreneurship Business Information Network (eBIN)
• Inspired by the Economic Gardening Model• Partnership of
– Purdue Krannert Business & Economic Library– Purdue Extension– Small Business Development Centers
http://pcrd.typepad.com/ecd/2007/08/coming-soon-to-.html
Help entrepreneurs answer questions like:– What other products or services are out there that are
similar to mine?– Who are my potential customers and how do I reach
them?– What are my potential customers like?– What are the latest trends in my industry?– What legislative issues could effect my business?
Marketing Lists• Business & Company Resource Center - US and International
company database with profiles, financials, rankings, company history, industry overview, and related associations.
• Reference USA - US company database that includes subsidiaries and divisions. Provides brief profiles and contact information with very powerful search capabilities for generating lists of potential customers or competitors.
Industry Trends• Bizminer - Contains market analysis and financial analysis for 100s
of industries. Excellent source of information for small business planning with 3 yrs of data for developing projections and financial targets.
• MarketResearch.com (Academic) - Demographic and market-specific research information.
• Frost Market Reports - Manufacturing and technology-related market research information. Coverage is international in scope.
eBin Data Resources
Customer Profiles• Choices III - Survey of consumer buying and media habits.
Significant flexibility to determine potential target markets and advertising opportunities.
• MediaMark Reporter - This database provides profiles of American consumers - who they are, what they buy, what they think, and how to reach them.
Journal Articles and Business News• Business Source Premier - Business magazine and journal article
databases; significant full-text with deep historic back file. Also contains company profiles, SWOT analysis, industry profiles and market research briefs.
• Factiva - General news, magazines, business news, international publications and US newspapers content. Also contains public company profile/financial information.
• Regional Business News - Regional (US & International) business magazines.
eBin Data Resources
Legislative• Lexis Nexis Academic - US laws, regulations
and court cases at the national and state level. Also contains significant news/newspaper content as well as company information.
• RIA Checkpoint - Tax laws, rulings, and regulations.
Agribusiness• Agricola - Agricultural database of journal
articles and research reports.
eBin Data Resources
Innovation Isn’t Only about New Enterprises
We need to build networks to help existing business be more innovative?
An Innovation and Entrepreneurship Strategy
Identifying Innovation Assets
Linking & Leveraging Assets• Move university innovations into the region’s
“star” industries – Identify Strongest Regional Clusters– Identify Relevant university Innovations– Recruit Pilot Industries
• Use an Enterprise Wide approach to move innovations into industry through:– Tech Transfer– Technical Assistance– Skill Development at all levels
Unlocking Rural Competitiveness• Funded by the U.S. Economic Development
Administration• Research conducted by the Purdue Center for
Regional Development and the Indiana Business Research Center
Unlocking Rural Competitiveness
Database, analytical tools, and processes to help rural regions
assess their economic competitiveness and create
strategies for growth and development
http://www.ibrc.indiana.edu/innovation/
Tools: County-Level Cluster Analysis
17 Clusters and 6 Sub-Clusters1. Advanced Materials2. Agribusiness, Food Processing and Technology3. Arts, Entertainment, Recreation and Visitor
Industries4. Biomedical/Biotechnical (Life Sciences)5. Business and Financial Services6. Chemicals and Chemical-Based Products
County-Level Cluster Analysis7. Defense and Security8. Education and Knowledge Creation9. Energy (Fossil and Renewable)10. Forest and Wood Products11. Glass and Ceramics12. Information Technology and Telecommunications13. Transportation and Logistics14. Manufacturing Supercluster (6 subclusters)
• Primary Metal Manufacturing• Fabricated Metal Product Manufacturing• Machinery Manufacturing• Computer and Electronic Products Manufacturing• Electrical Equipment, Appliance and Component
Manufacturing• Transportation Equipment Manufacturing
County-Level Cluster Analysis15.Mining16.Apparel and Textiles17.Printing and Publishing
Example: Agribusiness Cluster
Innovation Strategies• Nano-structured Coatings – Innovations for
tool and die shops• Energy Efficiency – Immediate cost savings
for energy-intensive manufacturers• Agribusiness Supply Chain Innovations –
Focusing on supply-chain issues at every level in the supply chain
Nano-structured Coatings•Match a industry need (i.e., tool and die shops) with a university innovation•Integrate the innovation into the industry
– Tech Transfer– Technical Assistance– Skill Development – Nano-structured Coatings Technologist
•Integrate into the community college tool-and- die program
http://news.uns.purdue.edu/x/2007b/071025BozicWIRED.html
Extension’s Role in Entrepreneurship & Innovation• Make E&I a topic of discussion in the
community.• Connect to non-Extension university
partners.• Host innovation showcases.
Civic Collaboration
• New perspectives• New skills
Types of Public Issues
From Heifetz, R. (1998). Leadership without Easy Answers. Belknap Press.
Types of Public Issues
From Heifetz, R. (1998). Leadership without Easy Answers. Belknap Press.
Types of Public Problems
Type 1Fix my pothole!
QuestionWhat Type II and III community issues have you experienced?
- Type II – Clear Problem/Unclear Solution- Type III – Unclear Problem/Unclear Solution
Balance Open Participation with Leadership Direction
• No single person, organization, or institution has all the answers
• No one is in charge• Mass participation
AND strong leadership is needed
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.
Civic Collaboration: Social Network Theory
Social Anthologist J.A. Barnes coined the term in his 1954, Class and Committees in a Norwegian Island Parrish.
Social Network TheorySocial network theory views social
relationships in terms of nodes and links. Nodes are the individual actors within the networks, and links are the relationships
between the actors
Six Degrees of Separation
Almost everyone has a “small world” story.
What’s yours?
Social Network Theory Applications
• Sociology• Anthropology• Information Technology• Organizational Development• Community and Economic Development
Building Community by Building Networks
Assumptions• Communities are built on connections.• Better connections usually mean better
opportunities.
Building Community by Building Networks
Questions• How do we build connected
communities that can take advantage of opportunities?
• How does success emerge from complex interactions?
Two Components of a Network
NodesPeople, groups, or organizations
LinksRelationships,
flows, or transactions
What’s the Value of ONECell Phone?
What’s the Value of TENCell Phones?
Patterns of Effective Networks1. Birds of a feather flock together2. Diversity is important3. Multiple paths between nodes4. Some nodes are more prominent than
others• Hubs• Brokers• Boundary spanners
5. Most nodes connect indirectly
Networks MUSTMUST GrowA non-growing network results in small
and dense clusters with little or no diversity. The lack of outside information, and dense cohesion within the network
removes all possibility for new ideas and innovations.
Network Building Exercise• Exchange business
cards with someone you do not know
• Find one thing you have in common
• Decide on a follow-up activity– phone call– information exchange– introduction
Knitting the Net: Four Phases1. Scattered Fragments2. Single Hub-and-Spoke3. Multi-Hub Small World4. Core-Periphery
ACEnet Case StudyACEnet provides a wide range of assistance to food, wood, and technology entrepreneurs in 29 counties of Appalachian Ohio
Scattered Fragments
ACEnet: Scattered FragmentsBegan weaving the network by asking questions:
• From whom do you get new ideas that benefit your work?
• From whom do you access expertise that improves your operations?
• With whom do you collaborate?
Hub and Spokes
ACACEnet: Creating New Hubs
Kitchen Incubator became a hub for restaurateurs and farmers
Multi-Hub Small World
ACEnet: Multi-Hub Small World
• Farmers Market• Outdoor Café• Restaurant
Association
Core/Periphery Network
ACEnet: Action at the PeripheryDeveloped the Appalachian Ohio Regional Investment Coalition to bring in additional resources.
Core/Periphery Network• Core includes the key community members• Periphery includes three groups of nodes
usually tied to the core with looser ties:– Those new to the community working their way to
the core– Bridges to diverse communities elsewhere– Unique resources that reside outside the
community
Networking Worksheet
1. Scattered Fragments2. Single Hub-and-Spoke3. Multi-Hub Small World4. Core-Periphery
Becoming a Network Weaver
Network “weaving” is not just networking or schmoozing!
Seven Levels of Network Seven Levels of Network WeavingWeaving
7. Introducing A and B in person and offering a collaboration opportunity to get A and B started in a successful partnership.
6. Introducing A and B in person and contacting A and B afterward to nurture the connection.
5. Introducing A and B in person.4. Doing a conference call introduction of A and B3. Doing an email introduction of A and B2. Suggesting to A that A should talk with B and then contacting B to
let B know to expect a call from A1. Suggesting to A that A should talk with B
Moving from Weaver to Facilitator• A facilitator identifies new weavers who
will eventually take over most of the network building and maintenance.
• If the change is not made, the network remains dependent on the central weaver and his/her organization.
• This transition is needed for the network to increase its scale, impact and reach.
Starting with a disconnected community, network builders can start weaving together the necessary skills and resources to build simple
single hub networks, followed by a more robust multi-hub network, concluding with a resilient
core/periphery structure – maximized for learning and implementation.
For More Information on Social Networks
Much of this material was adapted from the work of Valdis Krebs, developer of
INFLOW software. See www.orgnet.comfor more information.
Strategic Doing Helps Us Build Networks
We need to move our thinking from events and “programs” to processes….
Communities are moving toward civic process that focus on Strategic Doing
Strategic Doing1. What could we be doing together?
– Exploring our assets to find new opportunities2. What should we do together?
– Focusing on one opportunity at a time and defining, as clearly as possible, the “strategic outcomes” we want.
3. What will we do together?– Launching new initiatives by aligning our resources with “link
and leverage” strategies.4. What are we learning together?
– Learning what works by executing and measuring what happens
Web 2.0 Tools Are Needed
Web 2.0 Tools
• Blogs• Wikis• Capturing & Sharing Content• Forums
Web 2.0 Tools
http://shoutyoungstown.blogspot.com
http://www.chicowiki.org
Extension’s Role• Developing community-based social
networks?• Being a catalyst for Strategic Doing?• Adopting and promoting Web 2.0 tools?
ContactScott HutchesonPurdue University
Purdue Extension Economic & Community DevelopmentPurdue Center for Regional Development
1201 West State Street, #227West Lafayette, Indiana 47907-2057
(765) [email protected]://pcrd.typepad.com
http://pcrd.typepad.com/ecd
This presentation is available for download and discussion at the Purdue Extension ECD blog – http://pcrd.typepad.com/ecd