The competitive landscape is evolving from individual corporate competition to large-scale co-opitition. As global competition continues to rise, organizations are looking for every advantage to accelerate their strategic objectives and investments. Today we are looking at cities/regionsthat are architecting innovation economies byintegrating industry clusters, innovation centers and next generation educational programs. These initiatives are supported by region-wide investments, infrastructure and deep business acceleration services. It is these regional assets that will give corporations business advantage and attract all stakeholders to the region.
The term, Regional Advantage, is not to be confused with the decades-old pursuits centered around classic economic development. Cities that are still planning only for short-term infrastructure, workforce, and simple lifestyle considerations will be the cities that companies pass over in their evaluation. Corporations that plan for their future, can choose in which regions to invest and participate. They also have the option to relocate corporate offices and operations to regions that offer the highest level of competitive differentiators.
This is creating a competitive landscape for regional planners to build a comprehensive development plan and tangible regional assets that will give a reason for companies to consider some level of participation, investment and potential reasons to locate in that region.
In this article we will look at several cultural attributes of regions required to be a leading city of the future:
- Collaboration: How strong is your regional alignment and integration compared to other competitive regions?
- Co-opitition: What level of mutual investment is your industry making in the region?
- Globalization: In your industry, where is the greatest concentration and momentum developing globally?
- Innovation at Scale: What is the quality and quantity of your regional innovation output?
- Insights: Key take aways.
The catalyst for developing regional advantage begins with the integration of regional leadership across industry, government, entrepreneurs, investors, foundations, academics and leaders of the next generation. There are many different organizational structures being used by cities globally. It is important to understand the power dynamics around each of the potential models. In many cases, the organizations required to start the regional journey are not the lasting organizations that will need to be created along the way. Regardless of the models used, it is the core values of collaboration, inclusiveness, and distribution of power and governance that are key to a successful and sustainable regional plan.
There will also need to be careful evaluation of short-term investments vs. long-term visions for how the region will be relevant in the future. At the center of balancing both short- and long-term considerationsis the ability to evaluate regional assets and capabilities. To be able to discern what has made the region relevant in the past against the relevance of emerging industries and workforces that will be in great demand in the future. Regions that aspire to become world leaders in new industries will have to invest proactively in direct proportion to what they are leaving behind. This is the same for any local company. All companies must realistically look at the future of their industry compared to adjacent and emerging industries and see the shifts they will need to make internally to remain relevant. The power of collaboration and partnerships opens the door for regions to pivot together vs. as solo organizations.
This is a natural extension of collaboration. Here organizations can see the benefit of mutual investment and sharing of risk to transform their region for the benefit of all. You can either have solo companies facing all the challenges of the future alone, or you can be an entire region of companies that can compete as a cohesive competitive model.
Most regions are comprised of many small and medium sized businesses. What if they could jointly develop and share services that all businesses need? This shared investment could create capabilities better than any one company could afford to develop. These shared services would provide acceleration, attracting new businesses that want to operate in the region.
Every large company has a massive ecosystem of smaller companies supporting them. What are the larger companies doing to strengthen their overall ecosystem and help their network shift when the large company pivots into new market opportunities? The security of the large companies is being disrupted. The strength of their ecosystem helps them pivot quickly providing a robustness that a solo company just doesn’t have on its own.
Many of the emerging industries have many operational tiers. For the region to be a leader, companies, at each tier of the new industry, must co-invest. This creates success and drives regional attraction, bringing more industry investment into the emerging cluster.
Governments, culture and nationalismare bringing many new approaches to regional development. Many global businesses compete against well-established American and European companies. By default, they do not start competing alone.
Many industries abroad are filled with deep consortiums of co-opitition-based partnerships that combine all the resources, assets, and influence of the consortium to accelerate the development of all the business involved. This is not the classic America model of 1:1 corporate competition.
Foreign policy is also shaping regional advantages in markets outside of the USA. Companies need to become stronger in their ability to evaluate new markets and geographic regional advantages to understand where they need to be involved globally and in what partnerships. Soon companies will be participating in regional innovation centers and education centers around the globe if they are simply to be on the pulse of innovation and disruptions. More mature companies will form consortiums and select regions to create regional advantages specific to their industries and adjacent industries. This is a global race for industry leadership and broad regional services from which every company in the region will gain acceleration. Today global regions are actively building out these new innovation economies and acceleration infrastructures. The window of opportunity to capture the lead in today’s industries and in the concentration of the emerging industries is already starting to close.
Cities and regions that are not actively working past classic economic development programs and into the next generation of regional advantage will find that they have already lost the initiative and it may be too late to overtake other global leaders. These areas will be relegated to several lower tiers of supporting the leading regions and will most likely see a slow but constant attrition of their companies, talent, and future.
Regions must start to look at these global patterns and start to evaluate the ability to partner with other leading regions. There are still geographic boundaries like nations and states that allow for several leading regions in any given industry. It is important to know if you can still be a leader in your current industries or if your region needs to pivot to align to an emerging industry.
Innovation at Scale
Other nations are building out innovation ecosystems using new models and patterns. They have been able to watch and learn from the USA for many years. Now they are moving past the older ideas and building the next generation of regional advantage.
While still competitive, the USA is stagnating in past patterns of innovation models. For instance,the USA still views corporate competition as a 1:1 game. It tries to replicate an older startup-paradigm modeled after the Silicon Valley entrepreneurship. The USA is still building incubators that focus on small cohorts and venture capitalist support. The rest of world has moved on to an industrial revolution in innovation, incubating hundreds of startups with corporate clusters driven by industry and government capital. The result is USA incubators turn out a few new companies each year and the regional innovation center models turn out much larger numbers. The scale at which regional innovation center models can incubate and then pass, pivot, or commercialize will far exceed the older approaches.
The key take-away is that innovation ecosystems are being developed all around the globe and there are many learnings to be gained by studying them. Underpinning these are new innovation economies around regional advantage that move far beyond the classic economic development planning happening in the USA. For companies, they will have ever-increasing opportunities to decide which global regions to participate and invest in. Will your region be relevant in a future of emerging industries?
For regional or corporate leaders considering the following questions:
- Does your region have industry leaders that are supporting cluster development initiatives?
- How is your entrepreneurial community support and aligned to the regional industries?
- What role is the government playing in your regional development and what model have you selected in terms of long term growth?
- How is your region creating its innovation economy in term of attracting new companies, start-ups, talent and investment into the region?