A sputtering economic recovery and fascination with smart city initiatives in recent years has renewed questions about how to build cohesive, vibrant entrepreneurial communities. How do leaders create cities that thrive? What does an innovation ecosystem look like within a city or region? Are certain ecosystems more suited to prosper than others?
These questions are changing the way leaders plan and reinvent communities. The classic model of planning relies on “chasing smokestacks,” in which planners aim to coax large established companies or factories from afar to relocate to their region. For example, Wisconsin state and local governments recently helped persuade lighting company Kenall Manufacturing to move from Illinois to Wisconsin through attractive incentive packages, including an offering of $1 million from Kenosha County.
While chasing smokestacks may present short-term benefits in terms of political attention or highly visual investment, this model doesn’t necessarily encourage longer-term value creation or significant economic spillovers. As some drawbacks, it creates regional winners and losers, all bets get placed on a few big players, resources are shuffled from one location to another, and incentives are largely at the benefit of the new tenants. For 12 Midwestern states in particular, nearly 80% of development budgets went to recruitment incentives.
“Smokestack chasing can be very expensive to execute, and huge tax breaks can be very costly compared with targeted assistance to firms already in the area that are in their growth stage,” says Mark Schill, vice president for research at Praxis Strategy Group and managing editor of NewGeography.com.
An alternative planning model is to create entrepreneurial ecosystems. The goal is to ignite many local partnerships to form in order to leverage homegrown talent, local resources, and other native assets. By focusing on local growing conditions, leaders hope to create clusters of new firms and industries that ultimately produce a fertile landscape long term. Rather than providing tax breaks and business subsidies for a handful of outside employers, more emphasis is placed on the factors that bring diverse groups together in multiple rewarding ways.
An Abundance Mindset for Leaders
A planning model focused on ecosystems shows an abundance mindset in action. More than just a win-win approach, an abundance mindset greatly amplifies the breadth of vision and scale of impact. With an abundance mindset, leaders can see and create opportunities that invite bigger dreams, spark more chances to act, and produce shared rewards. In other words, imagining more together leads to doing more together, which leads to having more good things together.
A mindset is a chosen attitude or intention that determines responses to and interpretations of situations. An abundance mindset is different from a scarcity mindset, which focuses on enforcing limits, conserving resources, and addressing short-term needs within a community. An abundance mindset focuses, instead, on exploring options, leveraging resources, and considering long-term needs. Both mindsets are needed within society, yet leaders who adopt an abundance mindset are able to present more compelling visions of future change to their communities.
At a personal level, proactive leaders display an abundance mindset. As leaders, they are forward looking, inclusive, and visionary. At the citywide level, leaders can help a community adopt an abundance mindset by creating an inclusive vision, sharing ownership and rewards, developing synergistic terms for partnership, putting initiatives into a broader regional context, and encouraging longerterm horizons.
Take Portland’s visionPDX initiative, which demonstrates an abundance mindset. Started in 2005, then-Portland Mayor Tom Potter invited the local community to help guide the city’s vision of its growth for the next 20 years or more. The initiative was designed to be an open, inclusive process, and the planning committee adopted three guiding values for the outreach process: (1) create ownership over simply creating “buy-in,” (2) start from where people are in terms of readiness for the engagement activity, and (3) tailor the engagement to what best speaks to the targeted audience. Considered as the largest single civic engagement survey in the United States, visionPDX gathered input from more than 17,000 area residents over a two-year period through focus groups, surveys, and more.
Gary Marschke was part of the original visionPDX team and a member of later execution groups. He felt that inviting such broad community input was critical in preserving what is the best of Portland while changing it for the better. In a Portland Tribune editorial, he stated that local residents “have been given a taste of what can be accomplished when you combine their community energy with a little vision and a little access.”
The output from visionPDX ultimately became the basis for a long-term strategic vision called the Portland Plan, and unlike prior city plans, the new long-range plan focuses on both place and people.
Three Types of Ecosystems
An abundance mindset helps leaders understand communities as ecosystems.
Ecosystems, by their nature, are predicated on abundance. One aspect of abundance is quantity. Ecosystems require generous amounts of diversity and density in resources, habitats, and people to function effectively. Within a regional ecosystem, having many different variations in job roles, industrial sectors, and neighborhoods helps produce the creative ferment needed for broad-based innovation.
Another aspect of abundance is its overflowing quality. Likewise, ecosystems must brim over from one life cycle into the next in order to produce a self-sustaining environment. Done right, a regional ecosystem regularly restores, renews, and revitalizes its own sources of energy and materials so that its residents find value in staying and playing within the same physical space. The flow between resources and connection points stays fast and fluid. As part
of the spillover effect, opportunities created by the older generation lead to new or different opportunities for the next generation so that the growth cycle can continue.
Jane Jacobs, who wrote the influential 1961 book The Death and Life of Great American Cities, saw the city as an ecosystem. As a complex web of interactions and transactions among residents, the city is a dynamic living organism, and she felt that the same forces that make a city a good place to do business also make it a good place to live. She wrote, “There is experience at living, responsibility and concern in abundance among the city’s people. There is cynicism but there is also faith, and this is, of course, what counts most.”
Part of having faith means trusting in certain images. People know images carry power, and many leaders struggle to find the right image that captures the type of ecosystem that they envision. Three dominant metaphors have surfaced to describe regional innovation ecosystems: rainforests, coral reefs, and hot spots. Each image emphasizes different aspects of an ecosystem’s value.
Rainforests are concentrated forms of abundance. They brim with tropical life from dense undergrowth to swaying jungle canopy. While rainforests cover less than 2% of the Earth’s surface, they contain more than half of the world’s plant and animal species, according to The Nature Conservancy. Rainforests serve a critical global role as the world’s thermostat by regulating temperatures and weather patterns.
As ecosystems, rainforests reflect the varied mass of relationships and elements mixing together in unusual combinations within a fertile environment. Victor Hwang, a venture capitalist in Silicon Valley and author of The Rainforest, talks about creating rainforests to community leaders. Places that are rainforests provide the right conditions that spur the chance evolution of new ideas for business and social growth.
To Hwang, the rainforest model is more than a metaphor. He says, “Innovation ecosystems are not merely like biological systems; they are biological systems.” When particular social behaviors allow the loose movement of talent, ideas, and capital within a community, he believes that human networks can then generate extraordinary patterns of self-organization.
Other leaders use the image of coral reefs. Coral reefs are massive underwater structures that provide an abundant ecosystem of habitats, resources, and protection for more than 25% of all marine species. Coral reefs often flourish in larger inhospitable environments, and they are the largest structures on earth of biological origin, reflecting a long history of development. Art Markman, a psychology professor at the University of Texas at Austin, says, “The metaphor of the coral reef allows us to think more about the haphazard interactions that provide value to the variety of stakeholders who are part of a business ecosystem.” Markman and his team have been studying how the interactions among groups at the Austin Technology Incubator and within other innovative units, such as the Special Operations Forces for the U.S. military, mimic the multilayered ecosystems of coral reefs.
The structure of the ecosystem matters as much as the interactions in his opinion. Markman says, “The reef metaphor also makes clear that it is important to create some number of structures that protect new firms and also provide the locations for interactions to occur.”
A third popular image for ecosystems is hot spots. Technically, hot spots describe any concentrated zone of intense activity, and innovation hot spots are clusters of high-growth entrepreneurial activity. These areas serve as magnets for new talent and ideas from the surrounding less active areas. Silicon Valley and certain neighborhoods of Boston are often considered high-tech hot spots in the United States.
Recently, the state of New York has pushed forward an initiative to develop “innovation hot spots” that would produce 10 high-tech innovation incubators affiliated with state universities. These hot spots will become tax-free zones where startups and other businesses tied to the incubator will be exempt from business and sales taxes for a five-year period.
The Delicate Balance in Ecosystems
Often natural images evoke concerns of fragility because a variety of factors threaten internal balance and renewal. Natural ecosystems like coral reefs react to factors, such as temperature changes, rising seas, and pollution, beyond their immediate surroundings.
Communities can be equally fragile, especially in conflict-affected areas or during times of traumatic upheaval. Unlike natural ecosystems, however, humans can be proactive and introduce new elements and resources to shift the balance. In the embattled Manheim Park neighborhood in Kansas City, Missouri, neighbors and community leaders came together to transform the abandoned Bancroft School into a revitalized community center for everyone. With the help of BNIM Architects and the Make It Right Foundation, the neighborhood residents worked together to design a multiuse center featuring affordable housing units, a health clinic, and public gathering space.
“What’s striking about Manheim Park and the Bancroft School is that they chose to define their own future,” says Bob Berkebile, principal at BNIM Architects, “not to allow the community and fear to define it for them.” Other leaders use the image of coral reefs. Coral reefs are massive underwater structures that
provide an abundant ecosystem of habitats, resources, and protection for more than 25% of all marine species. Coral reefs often flourish in larger inhospitable environments, and they are the largest structures on earth of biological origin, reflecting a long history of development.
“The open collaboration and respectful approach not only helped the Bancroft result,” Berkebile adds, “but it shows us a way to deal with urban communities anywhere in America.”
An Ecosystem of Ecosystems
As groups unite and intervene in their future, leaders must remember that communities do not exist in isolation. As ecosystems, all communities are interconnected in some fashion on a larger stage of evolution and survival.
In the book Rethinking Competitiveness, economists Kevin Hassett, Glenn Hubbard, and Matthew Jensen consider how countries benefit from one another’s successes through mutually beneficial trade. “In a world with extensive international trade and interconnectedness, competitiveness and productivity are synonymous,” they note. “When attempting to measure competitiveness according to a nation’s output, you find that the prosperity of one country will often stimulate additional prosperity for others.” It is an economist’s way of taking the abundant view that a rising tide lifts all boats.
This belief can be seen in Prosperity 2020, the largest business-led movement ever assembled to advance educational investment and innovation in Utah. Prosperity 2020 unites efforts across multiple cities and communities across the state. In 2010, local leaders realized that test scores were lagging peer states and national rankings had fallen. One in four young adults lacked a high school diploma. Other statistics, such as the need for more postsecondary education, were also calls to action.
The business community, as the ultimate consumer of Utah’s workforce, saw an opportunity to become more engaged in advancing educational excellence and help solve a challenge that was central to the state’s future and bigger than everyone. They saw education as a key component of economic development.
“Business leaders serve as a catalyst, rather than coming up with all of the solutions themselves,” says Natalie Gochnour, who serves as an associate dean in the David Eccles School of Business at the University of Utah and also chief economist and senior adviser to the Salt Lake Chamber.
The Prosperity 2020 movement aims to prepare a 21st century workforce by changing three major educational metrics in a 10-year timeframe, what has been shorthanded as 66%, 90%, and top 10. Specifically, Utah wants to move from 42.6% to 66% of Utahns who hold postsecondary certificates or degrees; from 75% to 90% of elementary students proficient in reading and math, and to the top 10 list of greater metropolitan areas for technology jobs and businesses by 2020.
In one year, Utah addressed this vision through a mix of joint legislative policies and educational investments, which equated to $43.6 million into public education and $20 million into higher education, with funding for a new STEM Education Action Center. Beyond funding, Gochnour raised the importance of the right leadership to help a community “break into a generous, collaborative mode of action.”
She explains, “We recognized the benefits of uniting a community around a common concern and fostering collaboration.”
The Prosperity 2020 team members began by analyzing past educational efforts. They concluded that their strategy needed to be long term, statewide, have a strong communications component, and start by building trust among key players. Other elements included creating a brand that people could identify with and rally around. Instead of an initiative or project, the team talked about Prosperity 2020 as a movement.
Gochnour says, “Leaders of the movement had strong interest in the success of others.” She adds, “Education partners seemed to feel this and responded with warmth.”
In his book The Speed of Trust, Stephen M. R. Covey posited the agenda that inspires the greatest trust is one that seeks mutual benefit. This belief ties to works by his father, the late business writer and Utah native Stephen R. Covey, who wrote about an abundance mentality as one of the central tenets for effective leadership.
“This kind of leadership brings a refreshing dynamic to a worn-out conversation and energizes people to work together in new ways,” says Gochnour.
Jana Scott, coordinator of Prosperity 2020, adds, “One real benefit of newly collaborative efforts is a spirit of hope. People begin to feel that things really can be better and see new solutions that didn’t exist before. That can go a long way in getting a community to a better place.”
What Makes a Good Innovation Ecosystem
An abundance mindset helps groups reconsider how they build and share existing resources, as well as how to create new possibilities. When it comes to American cities, experts take different approaches in defining them as innovation ecosystems.
Richard Florida, director of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management, argues that workers in creative occupations such as graphic design and software programming flock to certain cities so that city planners should shift from firm-based policies to more talent-based approaches. These creative cities then become the hubs within a global innovation network.
Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship, recognizes that more populated places create larger pools of entrepreneurs who, in turn, produce more active communities. While size matters, Aulet recommends that regions balance external infrastructures (such as airports and Internet access) with internal infrastructures (such as public spaces), which enable faster flows of ideas between people in an area. In short, factors of quality need to balance the usual factors of quantity in any innovation ecosystem.
Joel Kotkin, an authority on regional trends and author of The Next Hundred Million: America in 2050, reminds his readers that business innovation resides in American suburbs. Suburbs are an integral part of the greater ecosystem. Drawing from U.S. Census data and population statistics, Kotkin points out that “the nation’s greatest wealth-creator—Silicon Valley—is essentially suburban, and the world’s wealthiest metropolitan area—greater Hartford, Connecticut—is largely a collection of bucolic towns and suburbs with a density nearly as low as Atlanta’s.”
Yet if you ask business owners, we should all move to Austin, Texas—which ranked No. 1 in Thumbtack’s latest annual small business survey—due to its low taxes, ease of hiring talent, light regulatory burdens, and available training and networking opportunities. However, their workers would pick Washington, D.C., the most popular destination in United Van Lines’ 36th annual study of its customer migration patterns.
The disparity in America’s favorite places reveals the factors that go into city rankings. Most indices, such as Bloomberg Businessweek’s America’s 50 Best Cities rankings and Sperling’s Cities Ranked and Rated Index, consider their own preferred mix of input measures (e.g., number of graduate degree holders, cost of living, and commute times) and output measures (e.g., number of jobs, salary growth, and number of high-tech industries) for a particular place. Input measures are notoriously subjective and loosely correlated with innovative output. The Milken Institute, an economic think tank, looks only at output measures, evaluating which cities are best at creating and sustaining economic growth.
The inconsistency in city rankings is good news for business leaders. Communities should choose their own relevant set of criteria because the experts differ about what is “best.” Sioux Falls, North Dakota, does not need to, or even desire to, generate the same type of abundance that its brethren in Austin or Memphis value. In fact, the priorities any community hold dear should shift over time because all ecosystems are dynamic. Updating criteria at regular intervals enables leaders to stay resilient as community priorities and environmental factors change.
Bringing an Abundance Mindset Home
Leaders of all types can bring an abundance mindset home to their communities in several ways. First, they must select their language carefully. One overarching metaphor—be it rainforest, coral reef, hot spot, or other—should capture and depict the community vision of itself. An ecosystem characterized as a rainforest or coral reef may seem similar in size or energy, yet the community focus will be different in the balance of quality and quantity factors.
Second, leaders must step forward readily to shape and grow their cities as connected ecosystems. Leaders need to be breeders. In other words, good leaders are able to spark more ideas in the communities they touch, they foster optimal conditions for more creation and growth, and they help hatch new possibilities that generate future productivity and new life within a broader ecosystem.
Third, nonbusiness leaders should engage as many business leaders as possible, and business leaders must recognize their importance in the ecosystem. Everyone who lives and works in a community shares responsibility for its success.
Business leaders are more than just employers and taxpayers. While these roles are important, they only address part of the value a business enterprise adds to a regional innovation ecosystem. As global operators, businesses are well placed to see impending changes from outside the local area. As merchants, businesses bring in messages of a service economy and regional economy, plus the connections to other economies. As talent makers, businesses are driven to invest in the development of new skills that help enhance the local workforce. As capitalists, businesses value stories of growth and prosperity, so that they can encourage other stakeholders around them to consider bigger dreams and broader impacts. As issue advocates, businesses provide a constant
thread across local government elections and turnover. And as good neighbors, businesses donate and fund activities that improve or revitalize local conditions, from traffic patterns to community spaces.
By knowing the mix of and interplay between these roles, business leaders can consider the numerous ways that they can nurture and nudge an innovation ecosystem forward in tandem with other community leaders.
Business leaders can look to Chicago as an unlikely source of inspiration for business-led change within an ecosystem that is, in the words of poet Carl Sandberg, “stormy, husky, brawling.” In 1990, attorney Elmer Johnson began an effort with other members of The Commercial Club of Chicago to explore how to grow Chicago’s economy, and one insight was that any strategy must engage the broader region to be successful. These efforts led to publication of report called Chicago Metropolis 2020 in 1998, which laid out a set of recommendations for making the Chicago regional economy globally competitive by the year 2020.
Metropolis Strategies, formerly known as Chicago Metropolis 2020, continues to deliver on the recommendations today. Metropolis Strategies aims to make Chicago the best place in the country to live, work, and invest, and the nonprofit is sustained by donations of both money and time by business and foundation leaders from across the Chicago region.
Metropolis Strategies is focused on measurable accomplishments, not on recognition for recognition’s sake. In recent remarks to the Rockford (Illinois) Chamber of Commerce, chief executive George Ranney told the group, “Because of the nature of our organization and the business community’s support, we did not need recognition, and this has been an essential part of whatever success we have had.”
Tracey Fleming, director of operations at Metropolis Strategies, has the same view. He says, “Our work is targeted at making sure that everyone in the Chicago region has access to opportunity, and we see improving the economic vitality of the region as a way to provide that access to all of the region’s residents.”
The Metropolis team is focused on regional economic growth and transportation, justice and violence, and sustainability as three broad areas of improvement. Its efforts have led to reforms of the transportation and land planning processes in northeastern Illinois and a streamlined state criminal code, among other results.
Nearly 300 business leaders and the mayor of Rockford are drawing from the model of Metropolis Strategies to reinvigorate their city, located 90 miles north of Chicago. The editorial board of the Rockford Register Star wants Rockford’s business community to lead more local change. “Business leaders know how to get things done,” they told their readers. “Business leaders want results, and they want them now. There’s no waiting for the next election cycle.”
Business leaders in any region can take this message to heart. By taking a more expansive view of what their companies need—and can contribute back to a region—business leaders put an abundance mindset in motion instantly. This mindset enables communities to consider more planning models, beyond the traditional smokestack chasing, that open up possibilities for bigger and better futures for all groups involved and how those futures interact together within a grander ecosystem. When one ecosystem touches many other ecosystems, the ripple effect grows larger, and this is the power inherent in an abundant mindset.