Tuesday, September 30, 2008

Successful economic gardening in bad economic times.

One of our major utilities recently brought in an unusual economic development specialist from Colorado named Chris Gibbons to give presentations in our area.

I wasn't able to attend, but I've been reading about Chris' work since he was here. His approach is one of 'Economic Gardening'. This approach emphasizes the creation of support programs that focus on growing local entrepreneurs in smart, low-cost ways. They do this by creating attractive, entrepreneurial communities. In essence, grow your own economic development from the inside out.

Here is how Chris summarizes it on the Littleton, CO, website where he is Director of their economic development activities: "We are more convinced than ever that our fundamental concept (entrepreneurs drive economies) is right and that healthy communities have a healthy base of entrepreneurs."

As a long time entrepreneur who has worked with business assistance programs of all kinds, I'm in a good place to highly recommend Chris Gibbons' work. As someone who has developed and taught my own curriculum for successfully launching micro-enterprises, I strongly agree with his conclusions.

This is a time of terrible economic news. The macro-economics of the world economy are under historic strains. There seems to be more difficulty with every new headline.

Yet we will come through this. Hurt and battered in many cases, but the cycle will continue on its way until we let another bubble get big enough to burst again.

What has changed permanently, I believe, is the sense of trust many of us felt leaving our economic security entirely in the hands of others.

The Economic Gardening approach to business development is to stop chasing any old big-is-better outside solution. The idea is to quit throwing money at businesses development, but rather, create communities in which creative new enterprises of all kinds can thrive. Help entire communities become more entrepreneurial. Help startups of ALL kinds. When some of those startups turn into 'gazelles', or faster growing organizations, help them plug into the next steps.

Chris calls this kind of sustainable development 'the edge of chaos': "This term describes the area between stability and chaos, where innovation and survival are most likely to take place. As a way to think about these regimes, consider what form H2O takes in each. In the frozen regime, it would be ice. In the stable regime, it would be water. In the chaotic regime, it would be steam."

Yes, yes, yes. Through the years I have seen peers vaporize wonderful companies because they could not control the chaos. I have seen other friends stay frozen in place because they did not have the constitution or the support to innovate.

What I teach in my micro enterprise courses is that you should launch your own startup as soon as possible. The idea is to invest in yourself to help gain some measure of financial control over your own life. This is especially true in times of economic trouble like we have with us now.

I teach my startup entrepreneurs and small businesses that running your own enterprise will be a giant lesson in making mistakes. If you haven't thrown a ton of money at your business, you can - and should - make as many mistakes as quickly as possible. They will be invaluable and inexpensive with this approach.

Here is what Chris Gibbons says on the subject:

"We came to equate the edge of chaos (success) with lots of changes and experimentation and lots of little mistakes. It seemed like the mistakes that accompanied the process of innovation were like earthquakes: if you don't have lots of little ones, you end up with a big one. We read a study out of Dallas that indicated the most vibrant economies (in terms of producing jobs and wealth) were highly unstable in the sense that they had the highest rate of business start ups and business deaths. This turbulence also looked like an economy operating at the edge of chaos."

The current state of Economic Gardening relies on 3 major approaches to creating successful economic development from the inside out. They are information, infrastructure, and connections. Notice they don't include throwing money at the issue. Those days are over.

Information refers to the capture and sharing of as much valuable data with entrepreneurs as is possible. Chris in Littleton, CO says he spends about three-quarters of his agencies time providing tactical and strategic information. Amazing.

Infrastructure refers to building sustainable, supportive communities that attract and retain entrepreneurs. It also refers to building intellectual infrastructure; that is, making world class ideas and resources available to local firms and the local community through local courses and training.

The emphasis on connections means that economic development and innovation are driven by the ability to connect with people and talent outside of your immediate area of knowledge. In my own region, this means the ability to plug into the University, the Technical College system, great regional and national economic development organizations, and my own favorite, our wonderful Inventor and Entrepreneur Clubs.

The economic headlines are awful lately. This is not a time to get into the fetal position and hide. It is a time to begin building more economic security into your own life and into the life of our regional communities.

Starting and growing your own sustainable business is a step you should take. In spite of the headlines, there has never been a better time to do it.

Chris Gibbons' story about economic gardening