The "New" Economic Development by Victor Hwang, EDA2016 Summit

© 2014 Ewing Marion Kauffman Foundation

The “New” Economic DevelopmentVictor W. Hwang, VP of Entrepreneurship

Kauffman Foundation

www.kauffman.org© 2016 Ewing Marion Kauffman Foundation


Innovative economies are not really about incubators, accelerators, venture capital, universities, research…

Symptoms, not root causes.


Innovation is not a place.

It’s a state of mind.


But innovation ecosystems are invisible.

So how do we architect theinvisible infrastructure?



weeds cropsRules of the Rainforest(for innovation)

1. Break rules and dream 2. Open doors and listen3. Trust and be trusted4. Seek fairness,

not advantage5. Experiment and

iterate together6. Err, fail, and persist7. Pay it forward

1. Excel at your job2. Be loyal to your team3. Work with those

you can depend on4. Seek a competitive edge5. Do the job right

the first time6. Strive for perfection7. Return favors

RulesoftheFarm(forproduction)


OpennessDiversity

SerendipityFairness

ExperimentationPlay

Giving

ExcellenceLoyaltyDependabilitySuccessQualityPrecisionReciprocity

weeds crops


TIMEIdeas Products (scale)

VALU

E

cost

benefit“Innovation mindset” “Production mindset”


So what?

It’s an emerging field, but here are some early lessons for practitioners...


Lesson #1

OLD: Economies are a black box, so we must shove more stuff into the box.

NEW: Ideas matter. Successful economies nurture ideas through the life cycle from birth to full production.


OLD: Innovation is a “thing” that is distinct.

NEW: Innovation and production are ends of the same spectrum, from idea creation to scale. The key is crossing that invisible chasm. Constant experimentation and failure are routine.

Lesson #2


OLD: People are anonymous cogs in the system. Cluster them to get results.

NEW: People matter. Innovation comes from human relationships. Individuals form teams, which grow into startups, mature companies, and institutions.

Lesson #3


OLD: Morality is irrelevant.

NEW: Values matter. Culture is key to driving economic growth at scale. Certain patterns of behavior cause certain economic outcomes. Trust is the glue of the social fabric.

Lesson #4


OLD: Economies are based on cold mathematics.

NEW: Economies are a fusion of hard and soft. We can apply design thinking to economic ecosystems – human-centered, attuned to the full range of emotional interaction, conscious of the overall environment.

Lesson #5


OLD: Grow jobs by creating incentives to relocate businesses from other places.

NEW: Grow what you have organically, by shifting from zero-sum to positive-sum activity. Help people break down social barriers of distrust, fear, disconnectedness.

Lesson #6


OLD: Measure the inputs and outputs of an economy.

NEW: Measure the metabolism. Measure the flow of resources inside a system, including the velocity of ideas and the nimbleness of organizing teams to bring ideas to life. Measure social networks for density, fluidity, connectivity, diversity.

Lesson #7



Photo by Roger Culos


Ewing MarionKauffman Foundation

www.kauffman.org© 2016 Ewing Marion Kauffman Foundation

Victor W. HwangVP of Entrepreneurship

@rainforestbook

Small Business & Entrepreneurship

The "New" Economic Development by Victor Hwang, EDA2016 Summit