Musings on Entrepreneurship and Innovation
Saturday, June 05, 2004It Ain't Rocket Science
Ed Morrison recently pointed to an article by economic development professional Ed Kelley titled, The Complexity of Issues in Regional Economic Development, in which Kelley writes:
Hey [economic development isn't] rocket science...However, its issues frequently are no less complex and often support solutions far more difficult to implement.
In my experience, everyone who is serious about economic development understands that it is not a simple proposition. However, many default to the view that economic development (and entrepreneurship) is a complicated process. That is, they still tend to view economic development as a somewhat linear process of pulling together a laundry list of ingredients. The implication is that once the design of the "economic development wheel" has been invented, it need not be reinvented. The prescription is typically to identify and replicate a place "like yours." The trick, of course, is finding a sufficiently similar model.
Thankfully, a growing number are recognizing that the economic development process is qualitatively different, and in many ways more challenging, than rocket science:
Economies emerge. John Holland notes in Emergence: From Chaos to Order:
Emergence is above all a product of coupled, context-dependent interactions. Technically, these interactions, and the resulting system, are nonlinear: The behavior of the overall system cannot be obtained by summing the behaviors of the constituent parts. We can no more truly understand strategies in a board game by compiling statistics of the movements of its pieces than we can understand the behavior of an ant colony in terms of averages. Under these conditions, the whole is indeed more than the sum of its parts. However, we can reduce the behavior of the whole to the lawful behavior of its parts, if we take the nonlinear interactions into account.
Likewise, economic development can't be understood simply by compiling lists of the factors, resources, and attributes that appear to be common to successful places. In Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region, Timothy Sturgeon writes:
[I]ndustrial development takes a long time to build up momentum, is profoundly structured by place and historical context, and acquires path-dependent characteristics that continue to influence outcomes far into the future.
Cultivating an entrepreneurial environment in order to stimulate economic development is understandable and actionable - if we take into account co-dependent relationships, feedback, and time in addition to identifying strategic resources.
Message to Economic Developers
Forbes publisher Rich Karlgaard appreciates the insights of economic development researchers. However, he has his own message for economic developers based on his barnstorming tour of communities across America. And, of course, Rich would like you to buy his new book. Seems a fair trade.