Musings on Entrepreneurship and Innovation
Sunday, January 16, 2005Can Economic Development Insiders Really Be Expected to Seek Diversity?
From Ed Morrison’s EDPro Weblog:
Regions that will be competitive in the future will have thick networks of collaborations and civic habits of leadership that encourage diverse voices. Regional leaders will work hard to make their tables bigger and rounder. The reason: They will learn faster, spot opportunities faster and -- ultimately -- act faster.
There seems to be a causal relationship between innovation and economic development. Furthermore, as Kathleeen Eisenhardt at Stanford University notes, "Extraordinary innovations are often the result of recombinant invention...whereas innovators may often feed the romantic myth of the lone inventor, breakthrough innovations are more likely the product of groups." In other words, diversity facilitates the recombinations that are the raw materials of invention.
While invention is necessary, it is not sufficient. Innovation and economic development occur when inventions are adopted by customers. Andy Hargadon, author of How Breakthroughs Happen, says that the process of innovation can be described as bridging and building. Bridging is a function of having a relatively large number of weak tie relationships, while building requires strong ties. Though, as Andy notes, "Building and maintaining connections to others takes time and energy. Indeed, that may be the first law of social networks: There's no such thing as a free network." One can develop a large, diverse set of weak ties, which facilitate bridging and invention, or one can develop a small, focused set of strong ties, which facilitate building businesses around inventions; but it's difficult, if not impossible, to do both simultaneously.
That may be particularly true for smaller, more isolated communities on the economic frontier. Many such communities pride themselves on having high levels of social capital and, consequently, an ability to translate decisions into action. But, that kind of social capital is typically built upon strong social ties that inhibit the development of diverse weak ties and, thus, access to truly differentiated and inventive ideas.
Hargadon sees a role for what he calls technology brokers* to link the bridging and building processes. "Rather than being strongly tied to a single community, these brokers are weakly tied to a number of different ones. This not only ensures that they are the first to see new opportunities, but also that they are usually the last to be caught in the webs of established practices and embedded interests that constrain inhabitants of individual worlds."
Therein lies the catch. In my experience, the "tables" that get set by economic development professionals are invariably dominated by incumbents with close ties to the community. As invaluable as these people are in mobilizing resources in support of a truly innovative idea, they are rarely the source of such ideas. Breakthrough ideas that can help transform a local or regional economy almost always come from the outside. I suspect that it's not sufficient to simply make the "table" larger. The conversation needs to incorporate community insiders and a (much) larger contingent of outsiders -- these brokers.
If economic development professionals and elected officials owe their positions and access to resources to community insiders, how motivated will they be to increase the voice and influence of outsiders? Breakthrough innovations, by their very nature, are disruptive, and it is incumbents who bear the burden of such disruption.
*In this context, technology means the arrangement of ideas, people, and objects for the accomplishment of a particular goal.
Related: Tacit Knowledge and the Geography of Innovation, The Value of Weak and Strong Ties
