Musings on Entrepreneurship and Innovation
Sunday, June 27, 2004Boise's Productivity Advantage
In the most recent issue of The McKinsey Quarterly [1], Diana Farrell and Lenny T. Mondonca write:
The Bay Area (including Silicon Valley) had a third of all US venture capital investment, strong ties to the global economy, and a high concentration of technology workers - strengths that make it the most productive region in the United States,, with an average output per employee nearly twice that of the country as a whole.
They go on to demonstrate how expensive that productivity has become. In fact, adjusted for the relative cost-of-living, the Bay Area's productivity, although still well above the US average, is less than that of Boise, Idaho:
(Click on the image to view a larger version of the chart.)
[1] "The high price of success," The McKinsey Quarterly, 2004, No. 3, p. 22.
Is the Boom in Moses Lake Robust?
Ed Morrison doesn't miss much. He noted that Boomtown USA author Jack Schultz spoke last week in Moses Lake, Washington (pop. 15,000), one of Schultz's "Golden Eagle Agurbs." The Columbia Basin Herald reported on Schultz's speech:
"I think the future of the Moses Lakes of the world is very bright."
Schultz said the town's biggest weakness is that he didn't see a large number of entrepreneurs, and he thought that the town needed to figure out how to nurture new and young entrepreneurs...
In regard to entrepreneurship, data confirms Schultz's perception. A few years back, the National Commission on Entrepreneurship conducted a nationwide study (PDF) of the relative number of entrepreneurial growth companies in each of the country's Labor Market Areas (LMAs). By definition, the national average Growth Company Index (GCI) was 100. The average GCI for LMAs between 100,000 and 150,000 in population was 79 and ranged from an abysmal 0 (Hilo, Hawaii) to a very high 198 (Farmington, New Mexico). The GCI for Moses Lake was a mediocre 71.
Some combination of factors - geographic, demographic, and institutional - have contributed to Moses Lake's "boomtown" status. I wonder, though, how robust the town's good fortune might be with such a low level of entrepreneurial achievement. For comparison, Bend, Oregon - another Golden Eagle agurb in the vacinity - registered a GCI of 124 in the NCOE study.
I agree with Schultz - the present and future are full of opportunity for the Moses Lakes of the world. Social and technological changes are leveling the playing field, which suggests to me that the Moses Lakes of the world should celebrate - but not take the future for granted.