Many regions are making significant investments to develop their overall potential and attractiveness. This is a competitive endeavor, as the strategies that regions are using vary greatly. Many new and innovative strategies are evident in the most progressive regions. Their success creates a momentum that may be hard for other regions to match resulting in a widening gap for the regions being left behind or suffering the accumulative effects of decline. There will be cities of the future that lead in emerging technologies, new growth industries, and next-generation education models. It is certain that there will also be cities that are in rapid decline for failing to have a progressive regional development model.
This is no longer the age of classic economic development but an era of building new regional assets and integrating all the assets of your ecosystem to create Regional Advantage. Cities can no longer afford to be planning only for short-term infrastructure, workforce, and simple lifestyle considerations. They will become the cities that companies pass over in their evaluation. Corporations and foundations can choose in which regions to invest and/or locate. They will be evaluating regions with evolving criteria around which regions offer highest level of Competitive Advantage.
In this article we will look at some of the key considerations that regions must begin to evaluate to align future investments:
Tiers of Value – Are you investing in the right areas?
Value of Time – You can lose years working on the wrong tiers.
Integration – How well is your ecosystem working together?
Acceleration – What tangible advantages can be realized within your region?
Attraction vs Attracted – What does it mean?
Regional Relevance – Will you still be relevant in the future?
Tiers of Value
Comparing cities across the USA and around the globe, their strategies and investment levels vary quite dramatically. Each investment was categorized by the overall long-term impact and sustainability to the region. Each evaluation was based on a set of metrics crossing multiple aspects of design, implementation and outcomes. Let’s cover three examples of basic metrics in this process.
The first will center on the model chosen to implement for the investment. Models vary greatly in terms of approach, design, services, funding, complexity, scope and ultimately long-term value. The best models are built incrementally with each step increasing the potential for moving to a greater tier of value as it matures.
A second aspect will be around how well integrated this new offering is with the existing ecosystem. Is it a stand-alone island or a deeply connected addition that will become a multiplier for future investments?
A third aspect is the overall scope, scale and the reach of the investment. Does the planning have the future-state vision to scale over time or is it really just a pilot that will never grow to be more than a token initiative?
While these are only three examples of a broad spectrum of metrics, they begin to illustrate that what your region may select to invest in short term could result in an outcome on a totally different tier of value from what other cities are working on today. It is important to have strong frameworks, metrics, and decision-support processes that can objectively help a region decide on how to prioritize its portfolio of investments over time. This is not a decision between good and bad, but a much more critical set of decisions around good, better and best. In the race to competitive Regional Advantage investors can’t afford for the result to only be good – because it won’t be good enough long term.
Value of Time
This is a race pure and simple. Every region is in the race whether they are aware of it or not. And the race has already begun. Some cities have already been investing in progressive strategies and Top tiers of Value for over 10 years. They already have 30-year plans on the drawing boards and are constantly updating them.
The race will be determined by the long-term planners, the incremental investors and the iterative progressives. To be clear, some of the most progressive strategies are not in the USA, so it is imperative to assess the global landscape.
One of the major challenges is that there are many different definitions and metrics. A number of cities are trying to create an innovation economy, yet their definitions and metrics vary widely. It can become more evident when investments and initiatives are mapped to the Tiers of Value. Many are not even competing on the same level but use similar definitions in their regional marketing. This creates a short-term illusion of competitiveness in the short term.
It also creates a major risk of years and dollars spent building a set of regional assets that are of a lower tier than competitive cities. Both the time and money will be spent, and they will have outpaced your region’s efforts. However, none of this has to be the case because it is possible…to use time more wisely, to deeply evaluate the models and approaches, to learn the lessons from the paths others have begun and to make the right investments and partnerships to leapfrog ahead!
Regional Advantage: The integrated alignment of critical assets and capabilities a region develops to attract businesses, investors, workforce, students and causes that would compel them to choose to be involved with one region over another. It is measured in the advantages of speed, cost savings, ease, incentives, partnership potential and overall acceleration available to achieve their goals and objectives.
Every city and region tells a good story. They have many people engaged, investors investing, and marketing people marketing loudly communicating all of their accomplishments. As companies and investors begin to map and evaluate their ecosystem, there is no denying regions have “stuff” going on. The two things that leap out after applying the next-generation metrics is that most investing has been in the lower Tiers of Value. There many examples of programs, classes, funds and small centers. If is often because it is what everyone else is doing. Another clear insight is that very few of the regional assets are well integrated. There is no planning of the alignment of the ecosystem. No integrated lifecycles of services, no integrated funding models, no integrated measurements, no integrated planning and so on. Everyone within the region is building their own shiny island.
Perhaps what is not seen is what is not able to happen. There are obstacles and barriers that shape the bureaucracy. The fact is that most regions are not able to attract to their region at same rate as competitive regions. Everyone will defend their “stuff” and hide behind a marketing model that says, “we are building toward the future.” The fallacy is that regions can only choose an approach that invests in the lower Tiers of Value, un-integrated ecosystems, and older models. In fact, higher Tiers of Value introduce integrated models. This is one key aspect of investment evaluation. Why invest in un-integrated assets and programs?
Let’s reflect on that again. Why invest in un-integrated assets and programs? This opens the door to both the need for awareness, mindshare and shared-value systems. Where decision makers are up-to-date on what options are available and investors won’t settle for putting money behind non-integrated investments and legislation.
Everyone talks about an innovation ecosystem, but there is an even more important conversation about an innovation economy that must be at the forefront of the planning.
This is the byproduct of true integration. When full lifecycles of regional services and investment are aligned and integrated, multiplier effects occur. Let’s divide this into three major categories of acceleration.
The first is acceleration in actual regional development. There may be many plans for future centers, programs, education, industry and policies. When aligned, the region may be able to build these out rapidly and supportively.
The second category is in pure business and economic acceleration. What advantages do industry, start-ups and education all have in the region? Why would anyone want to do business there vs. another region? This is the true goal of regional advantage. Your region must be the best place to do business because you can get things done faster and/or better than anywhere else!!!!!!
The third category is all about attraction. Clearly, if the region’s investments, businesses and education systems are all “accelerated and integrated,” then the region will be attracting all kinds of new businesses, students, talent, and investment to the region.
Attraction vs Attracted
Classic economic development spends a lot of time and effort into tracking regional metrics to determine overall trends in the health of the region. This is an important pursuit, but many times the indicators are used to determine what needs improvement. An example of this might be something like a trends that says you are having a workforce gap and/or the young people in your region are moving away. While a critical insight, it tends to result in programs focused on workforce development. This takes the form of some potential basic training and a bunch of marketing efforts to promote the region. Addressing the symptom of the problem but not the cause. Attraction initiatives many times turn into marketing. You’re trying to convince people to come despite the problems that created the problem to begin with. Much of that marketing takes the shape of why the region has been successful in the past and why it is a great place to live.
The alternative approach would be to actually create the assets the region is missing. If real investments were made in developing and integrating the industry, education and innovation ecosystems the region would have no shortage of talent, companies and investment pouring into the region. Many regions are already achieving this around the world with very inspired development plans, but it doesn’t look like traditional economic development and the overall regional models are more transformational vs. trying to replicate to perpetuate the past. Attracted is having a regional advantages that people can’t afford not to be relocating or doing business with your region.
This is an enormous topic to tackle as a bullet point in an article. So the tip of the iceberg is simply: will your region even be relevant? Some regions will lead, others will follow; but certainly, others will atrophy greatly and fall into economic despair. In 1950, no one could even imagine a city like Detroit not being relevant. They were the world’s greatest industrial powerhouse coming out of World War II and leading in all of the emerging automotive technologies and supporting industries. The saying used to be, “As goes General Motors, goes America.” Yet, in the lifetime of the Greatest Generation, they saw one of America’s leading cities and industries decline into bankruptcy. History always repeats itself and it is always the regions that fail, that failed to act and continue to lead.
Every city tells great stories about how they were founded and the companies that grew up there. The past history and legacy is something to remember and celebrate, but it is not an indicator of the future. Detroit was a great example of an amazing past and history of success that failed to adapt to changing times and suffered great economic decline.
Call to Action
We live in an era of amazing change and possibility. The world will change more in the next 20 years than in the last century. Over 75% of the S&P 500 will turn over in the next 10 years. A long list of emerging industries are arising around solving the Grand Challenges we face as a planet. We are on the eve of an endless list of technology break throughs that will forever change what is possible. How much of this new future, emerging industries, new jobs, and next-gen education will your region be a leader in?
How will history remember your region?