Tag Archives: quality of life

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?

Strategic doing

This weekend was spent in Illinois having a further look around.  A day exploring Effingham some more, a quick look at the Amish community (it was quite a sight seeing horses and cars on the road together) and The Abraham Lincoln Presidential Museum.  The Museum was very well done and I got a real sense of what Lincoln achieved but just how heavily criticised he was.  It wasn’t until after his assasination that many people realised just what he had accomplished in enabling the end of slavery and the United States staying as one nation.

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Ed, Peggy and Scott were fantastic hosts, giving up a large part of their day to talk me through ‘Strategic Doing’ and the outcomes they have enabled in a number of communities.  Their view combines talent, innovation/entrepreneurship, places and brand, or as they put it better below:
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Interestingly, this started by transferring knowledge from open source software industry to create open source collaboration which goes to show how important creative thinking and learning from outside sources is.  There’s a great opportunity to share the model with universities and spread around the world.
They ask some simple questions to identify opportunities – what could we do and what should we do? Then most importantly there’s a bias for action – what will we will do and when?
What I like about this model is that it is a simple way to collaborate and it is a way of bringing to life the great economic research that already exists:
What I like about the Strategic Doing is that it provides the tools for people to make change, it is focused on outcomes and they are always learning.  The team had some great insights about guiding not facilitating, the impact of just a few people (check out Charleston Digital Corridor) and the psychology of communities – why some places thrive and others don’t!
We talked about the advantages of smaller locations over cities and their insight was that most of these locations share the same thing, quality of life.  But that alone is not enough, you’ve got to find what is unique to only your location.

What makes a Boom Town?

The last couple of days have been in Effingham, Illinois.  Effingham is the home of Jack Schultz, the author of author of Boomtown USA: The 7-1/2 Keys to Big Success in Small Towns and CEO of Agracel, a developer of industrial projects.  Jack and his wife Betinha have been the most outstanding hosts.  Effingham is a community of just over 12,000 people who have committed to creating a better future over a long period of time.  What is most impressive is the difference a few people can make instigating and persevering with projects as times change and reinvention is the new norm. 

I was fortunate to have a number of tours of local businesses.  Pam gave a great insight into the Patterson Technology Center, which started off as a software company and now with a number of activities employs 450 people locally.  It just goes to show how one or two people can create wealth and opportunity for the wider community.  Jack also gave a whirlwind tour of Midland States Bank which has seen some big growth in the last few years and also supports a number of community initiatives (see CEO below).  I even managed a ride on a locomotive.

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Agracel

Agracel has a great niche in providing development services to Agurb® (rural) communities.  They’ve done over 100 projects in 17 states so see all sorts of approaches to economic development outside big cities.  Some interesting insights were around manufacturers preferring to be in rural locations because of costs, workforce availability and work ethic.  Do manufacturers currently in cities consider relocation?  Anything is possible, it just comes down to people…I’d recommend the BoomTown book for some down to earth ideas.

City of Effingham Economic Development

Todd and the team gave a overview of some of the tools they have in their incentives toolkit, including Business districts, enterprise zones and tax increment financing districts.  Their insight about advantages of smaller locations were simple – quality of life.

CEO (Creating Entrepreneurial Opportunities)

Craig is incredibly passionate about the importance of kids learning entrepreneurship through learning and changing the way kids view the world.  Students have 90 minute classes each day, are integrated with the local business community and every student starts their own business.  It is similar to the Young Enterprise Trust in NZ.  Do you see value if children learning entrepreneurship for 90 minutes a day, even if their business fails at the end of it?  If you fancy yourself as an entrepreneur, take the Gallup Entrepreneurial Profile 10.

Tuscola Chamber and Economic Development, Inc. (TCED)

The last session of the day was with the very passionate and saavy Brian.  After years of hard work, they have recently secured investment in a Cronus $1.4b fertiliser plant.  Brian gave his thoughts on success – knowing your local strengths, learning from failure, community engagement and just how much of a long term commitment economic development is.  He is another believer in the small town advantage.