Tag Archives: data

Infrastructure – why it matters, how it is changing and disruption

I’m travelling all day today by trains and ferry so I’ll wind back the clock to Sunday where I spent the day with Johan and his family with some incredible hospitality in rural Sweden which gave me a wonderful insight into Swedish life.  I meet Johan in the US – one of those chance travel encounters.  Here’s a lake we visited, it’s hard to believe that it ices over in winter so people can skate to work across the lake or drive a tractor on it.

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Sweden and NZ have a lot in common as smaller counties who value quality of life  There’s some differences in how that is achieved – like much of EU there are subsidies to farmers (tech geeks check out open data), restrictions on alcohol (can only by 3.5% alcohol in supermarkets and use a state owned monopoly for other alcohol) and higher taxes.  On the flipside there is free tertiary education, efficient public transport and cycling/walking and a diversified export economy.

Kommuninvest

Johan works at Kommunivest, which finances infrastructure development and investments of the Swedish local authorities and regions (very similar to NZ Local Government Funding Authority, which was based off Scandinavian models).

Kommuninvest was started by nine authorities in the mid-1980’s and now has a Aaa credit rating and the ability to source lower funding from all over the world.  Interesting times here with it costing you to keep money in the bank.  As I’ve mentioned previously, NZ simply doesn’t have the history in certain activities that other countries do – which is a limitation and opportunity.

So how is all this relevant to economic development and locations of any size?

Infrastructure

Infrastructure is often perceived as a boring subject but in many ways it is the most important because it sets the platform for everything else in society.  As Joe from the World Bank would say “Infrastructure is now the price of entry” for economies, and underinvestment either exits you from the game or makes you irrelevant.  What will the Asian Infrastructure Investment Bank (AIIB) do to further unleash economics in Asia?  The worst thing will be to sit still, which will be hard for some people as NZ continues to bridge the infrastructure deficit and keep up with the new pace of first world infrastructure.

What is infrastructure anyway? 

The nature of infrastructure is changing – Wifi has come from nowhere and is now an absolute necessity with people consuming and transacting online…how often do we see locations through the eyes of tourists?   Digital and data infrastructure is probably one of the least recognised but critical going forward.

What would disruption look like?

Taking this a step further, how long until we see disruption in more traditional sectors?  Will infrastructure be funded differently – crowdsourcing?  How long until the banking sector undergoes a disruption Uber or Skype style?  What will self driving cars to do insurance companies revenues from premiums and will peer to peer insurance become mainstream?

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Harvard clusters and MIT entrepreneurship

Today was northward through the maze of highways from New York up to Boston. I’m writing this with a sense of relief having made it through a month in US with only a few less possessions than I started.  Tonight is an overnight flight to Sweden via Iceland.  I’ve been blown away by the friendliness and hospitality of the people here – from the people I’ve met (I haven’t had one cancelled meeting) through to all the people I’ve bumped into as a tourist along the way.

Dezan Shira & Associates

Richard, the Director of North America Operations for Dezan Shira gave me a great summary of his experience of living and working in China for 10 years.  I’ll cover this off in my China section in a couple of weeks, but it was a brilliant overview that will significantly aid my time there.

Harvard and MIT

From there it was on to meet with Sarah Jane who is with both Harvard Business School as part of The Institute for Strategy and Competitiveness running the Cluster Mapping project and MIT Regional Entrepreneurship Acceleration Program.  Here’s Harvard Business School.

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The Institute of Strategy and Competitiveness was founded by Michael Porter of Five Forces fame.

The visit wrapped a lot of structure around all the ideas I’ve come across so far, including putting into context a lot of traditional activities around industry attraction and trying to pick future industry winners.  In summary:

  • Cluster mapping methodology involves an upfront focus on data, with industries classified as either local or traded depending on where they sell to (locally or outside the region).  The key here is that while both industries provide jobs, the traded industries create higher wage growth, more productivity, and the list goes on.
    • A very smart algorithm is then applied to identify industry clusters.  There is a lot of data, which is split into three categories: Performance, Business Environment and Performance & Geography.  Tech geeks, they are using APIs.
  • Sarah Jane talked about stakeholder ecosystems to develop industries, including representatives from each sector – Entrepreneur, Risk Capital, Corporate, Government and University.  This is a great systems approach and what is very relevant for smaller locations is that Universities will often be absent and getting the mix of the other four can also be problematic.

The relationship between rural locations and cities is an interesting one…rural communities often benefit from cities growing, but if your location is declining – then what?  There’s some good rural research here too.

I’m doing cluster mapping a great disservice with this very brief summary of my take-outs, so check out the website for more info.

OK, flight is about to board so one last technology plug…here’s an almost hologram at Boston Logan airport giving people information before they pass through security.

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Change from the bottom up in the Capitol

Last day in Washington today and everything was going smoothly until the bus that was due every 10 minutes took 30 minutes and then my suitcase ‘Big Red’ self destructed before some number 8 wire innovation nursed it through the last few hours of it’s life.  That takes my total of losses to three – camera, plug adapter and now suitcase.  It could be worse – here’s a view from the Lincoln Memorial looking towards the Washington Monument.

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Corporation for Enterprise Development (CFED)

First up was Harold and Lauren, who are part of yet another organisation that makes up the ecosystem that is economic development in the US.  CFED is a national non-profit that acts as an intermediary, enabling other organisations to achieve outcomes.  CFED’s work is focused on creating economic opportunity that alleviates poverty – be it through developing a business or saving for higher education or home ownership. Check out some of their great programs.

What was particularly interesting was their focus at an individual and household rather than location or community wide.  They also have a strong focus on data, see their Scorecard tool.

US Economic Development Administration (EDA)

Next was the EDA hosted by Elizabeth and the team.  The EDA is the only federal government (like central government in NZ) focused exclusively on economic development.  They seem to have transitioned from a ‘leveraging investment’ model to one that develops resilience and encourages diversification in economies.

Some of the highlights of their operations:

Common theme – ‘Bottom up’

Both these organisations operate nationally and are very different in nature – government and non-profit.  However they both display a common behaviour – enabling change from the ‘bottom up’.  This leads us back again to localism….  How common is  the ‘bottom up’ development approach where you live?

Champion the entrepreneurial spirit

Edward Lowe Foundation

Onwards into Michigan to met with the Edward Lowe Foundation and some more incredible hospitality from Dino and the team at the 2,600-acre Big Rock Valley.  The Foundation was established by Ed and Darlene Lowe in 1985 to “champion the entrepreneurial spirit”, after having started and scaled Edward Lowe Industries which invented cat litter.

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Here’s one of the many historic houses on the property.

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The foundation supports the following programs:

All of the above are great tools to utilise depending on what is happening for businesses or locations.  A couple of favourites if I had to pick…

Economic gardening

Economic gardening is “grow from within” strategy targeting existing growth companies and offering them critical strategic information that is customized to their needs.  It was started by Chris Gibbons in Littleton, Colorado who is now the CEO for the National Center for Economic Gardening.  It has achieved some impressive results:

  • “During the 20-year period Littleton practiced Economic Gardening, jobs grew from 15,000 to 30,000, and sales tax revenue more than tripled from $6M to $21M without any recruiting, incentives or tax rebates”.
  • More recently in Utah, 12 companies achieved $16m in sales increases and the creation of 122 jobs, or in Kansas with 28 companies growing both employment and revenue approximately 30% on average.

Data – YourEconomy.org

YourEconomy.org is a very smart tool that gives an overall view of sales, job and business creation.  It drills down to all layers including down to State and most importantly locally.  Pick your favourite location and have a try.

In summary, a couple of insights emerge:

  • Business retention is growth is an often ignored poorer cousin to the more high profile attraction initiatives such as tax incentives.  What a difference can be made in any context by starting with what you’ve got and asking how do you grow?
  • While the Kauffman Foundation (new and young companies) and Edward Lowe Foundation (second-stage entrepreneurs) have slightly different definitions on what companies create the most jobs, they are saying the same thing – entrepreneurs and young companies create the most jobs.
  • Like most places I’ve met the Foundation partners and collaborates with other organisations to achieve their end goal and they have great systems.
  • Data when powered by smart technology showing local information is critical to give context of what is happening in economies.
  • Finally, how do locations educate, retain and attract talent so they create and scale businesses that operate globally?

Beautiful Boise, events and the end of week one

The last day of the first week offshore and I’m not sure if it feels like just yesterday I left home or a month ago.

Today was in Boise, Idaho which is a beautiful ‘city of trees’.

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Idaho Commerce

First up was the team from Idaho Commerce for a very productive conversation, given the remoteness of Idaho and the challenges that brings.  The team has a strong focus on supporting job creation.  There are some interesting initiatives including Accelerate Idaho, a reasonably new tax reimbursement incentive and the Idaho rural partnership fund.  Rurally we talked about moving agricultural products higher up the value chain which when combined with tourism can create even more value (e.g. niche food, craft beer and wine).  Education and the war for talent was raised as a big challenge in the future.

Boise City

From there it was on to meet Nic, ‎Director of Economic Development at City of Boise.  Nic gave me a great overview of the layers of government in the US and how they interact.  Some great ideas flowing from Startup in a day, Obama’s government startup and the Mayors Innovation Project.  Nic reinforced the importance of having good data balanced with customer insight.  My favourite project was a Spring Into Code, which introduces kids to computer science at a young age which is what industry is asking for.

Boise Valley Economic Partnership (BVEP)

I met Jana, who had lived in Tokoroa on an exchange as a secondary school student.  BVEP is a regional economic development agency covering a number of counties and the City of Boise.  Jana reinforced the importance of business attraction by proactively prospecting for new business and working with ‘site selectors’, which is a big industry in the US.  They have some very insightful data and geospatial information combined with customer insight to help identify the sweet spot of what Boise Valley can offer.  In other words, understanding the behaviour and perceptions of prospective and current businesses, rather then using assumptions.  Broken record…but skills and workforce development raised again as key for the future.

International Festivals and Events Association (IFEA)

Taupo District has a strong affinity with IFEA, having previously won an IFEA World Festival & Event City Award.  I was hosted by Nia, including a tour of the beautiful Boise Depot.  IFEA have a great range of great education, information, conferences and awards to name a few and as a result I came away with a ‘to do’ list for when I return.  On the new idea front, it will be interesting to see if crowdfunding for events takes off.

So that is week one done and dusted…it’s a weekend away from work, exploring and driving in Oregon and definitely some downtime before another huge week.  Thanks for all the messages, it’s great to hear from you when travelling solo.  The Friday night thing to do in Boise is float down the river in an inflatable with a chillybin onboard…

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The pack of cards…when in Reno

Another full on day with a lot driving made easier with the freeways, beautiful scenery and very welcoming people.

Sacramento County

I sought out Rami as he was recently named one of the Top 25 Doers, Dreamers and Doers by Govtech and Sacromento County has won numerous tech awards.  We discussed digital government and I came away with a huge amount of confidence that the team at Taupo is on the right track.  Current and future focuses centre around regular website refreshes, the need for mobile apps, linking data (e.g. Crime and graffiti), the intersection of Geospatial and data and a single view for customers.

Nevada Governor’s Office of Energy, Carson City

Paul the Director and his team hosted me in the early afternoon for a quick overview of Nevada energy.  I was primarily interested in geothermal, given Nevada is the number one in installed geothermal per capita and Taupo’s strength in this area.  A highlight was by pure chance meeting and talking with Governor Paul Sandoval and witnessing the launch of the Nevada Electric Highway.  Note the highway “is expected to link rural areas and bring business to those communities from EV owners who make the stop to charge their cars”.  Electric vehicles are going to take off in some shape or form and communities should be taking action now to dip their toe in the water, ready to embrace what may become the norm.

Economic Development Authority of Western Nevada (EDAWN), Reno

Mike graciously shared his views on economic development and they have definitely stepped it up a level from when we last spoke in 2013. Mike is incredibly humble, and our meeting was definitely a lesson in leadership. EDAWN has five key strategies: retain and grow, attract, entrepreneurship, workforce development and community development.  What also impressed me was their great handle on metrics to track progress.  When Mike started there was 14% unemployment and now it’s down to half that and going lower.  A very bright future is on the horizon with Tesla building their gigafactory which will create 6500 jobs!  Their entrepreneurship program started from scratch and won Innovation Ecosystem Award.  A gem they showed me was the Reno startup deck which is an innovative way of integrating Reno’s gaming history and useful tools for startups – genius!

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