
Albert
Einstein supposedly once wrote that "Insanity is doing the same thing
over and over again but expecting different results." Whether or not
the Smartest Man in the World actually said it or Rita Mae Brown wrote it in 1983,
it is famous because we have all been there. Nothing could be more
human than to repeat a failing strategy because it feels so much more
comfortable than looking at a new set of facts.
Case in point: the
International City/County Management Association recently published the results of its
Economic Development 2009 Survey,
conducted in October of last year. Over 700 members - 22% of the
sample group of cities and counties with more than 10,000 people -
completed the survey. The results spoke volumes about how we prefer the
familiar and ineffective to the new and promising.
When asked if
their local government has a written small business development plan,
84.5% of respondents said "no." How about a written business retention
plan? Seventy-three percent said "no." Does your jurisdiction have
special technology zones designed to encourage technology-related
industries and businesses to move there? Eighty percent did not. And
what are the two biggest barriers to local economic growth? The
availability of land for development and the cost of that land.
As I reported in a
post on July 28,
the latest research in the United States shows that nearly all net job
growth since 1977 (practically the Stone Age) has been created by
start-ups in their first year of business. Other research stretches
that period of strong job creation to five years, but the point is the
same. Getting a Fortune 1000 company to locate a facility in your
community will make you a hero for a day. But by itself, it will not
ensure the prosperity of your economy.
What do startups
need? Being new and fragile, they need access to management expertise
and high-quality employees. They need credit and capital, and
connections with potential customers, strategic partners and investors.
The good news is that, if they survive and grow, retaining them is
easy: startups tend to stay where they were founded unless they cannot
get what they need there. Given the fact that technology in all its
forms is a part of nearly every process, service and product today, they
are very likely to be technology-related in some way. And while they
may eventually need land to construct that signature building that
signals their success, that's somewhere at the bottom of the priority
list.
This
mismatch between the needs of the most desirable employers in the
broadband economy, and the perceptions of people in economic
development, is breathtaking. I am also glad to say that there is
little sign of it in
Chattanooga, Tennessee, USA, where I spent two days last week. The municipally-owned
Electric Plant Board
(EPB) of Chattanooga is deploying a fiber-to-the-premises network to
every home and business in their service area. The driver for the
project is the implementation of smart grid technology. It is EPB's
ambition to gather data and send instructions in real time to every
element of the distribution network, as well as to thermostats, hot
water heaters and other equipment on customer premises. The dirty
little secret of electric generation and distribution today is that the
network is run by guesswork, and maintains its reliability by massive
over-building of capacity to handle peak loads. EPB expects that full
implementation of smart-grid technology throughout their network will
let them reduce costs enough to justify the fiber deployment on that
basis alone, with the revenue from data, voice and video services adding
icing to the cake as well as fulfilling EPB's mandate to support the
city's economy.
I was invited to Chattanooga by the city's
political, administrative, nonprofit and business leaders, who want to
understand how to leverage this asset to accelerate the community's
economy and bridge its economic and social differences. This is a place
that was named the most polluted city in America in 1969. The
pollution was caused by metal foundries that subsequently went out of
business, leaving the economy on life support. From that low point, the
city has fought its way back. The rebuilding of the downtown and
riverfront, which restored civic faith and pride, also taught
Chattanooga's leaders how to collaborate. They have turned to nurturing
local arts and local entrepreneurship, and targeted their business
attraction efforts to wind turbine and other clean energy firms, on
which foundation they hope to build a competitive business cluster.
While
giving speeches and offering advice, I was pleased to see a place with
so many pieces of Intelligent Community development in place. And I was
thrilled by their understanding of the need to turn those pieces into a
functioning whole, an ecosystem in which broadband, knowledge work,
innovation and digital inclusion can reinforce each other and drive
inclusive prosperity for many years. Stay tuned to news from
Chattanooga, as the EPB shows us how to add intelligence to the grid and
the city does the same for its economy.