Jon Roberts was invited to give the keynote address at the International Economic Development Council’s 2018 Leadership Summit held in Las Vegas (January 28-30). The topic was “disruption” with observations on Amazon’s site selection process provided by Gene DePrez.
While “disruption” is rarely absent from any discussion of technology, a full accounting of its impacts requires a larger perspective. Framing disruption simply as the effects of technology and innovation obscures its long history of upheaval across a broad spectrum of environmental, social, and political spheres. And our profession is no exception.
To better understand how wide-ranging disruption is for the economic development profession, let’s take Amazon as a familiar real-world example. In the past, an economic developer looking to understand the company might have started with a supply chain analysis. Documenting the flow of inputs and outputs from Amazon is still important, but it is far from the complete picture. It is time for our tools to catch up with the businesses we are profiling. If we begin instead with a value chain analysis, we can view Amazon’s business model from a different perspective. Looking upstream, we spend less effort on Amazon’s vendors and suppliers and focus instead on the firm’s infrastructure of enabling technologies: a broad array that includes cybersecurity, credit management, information databases, server farms, and a host of other discrete technologies. Next, we contrast this with Amazon’s downstream innovations, from automated fulfillment centers to drone delivery systems. The conclusion is unmistakable: Amazon derives its value not from its vendors and suppliers but from the disruptions it continues to unleash up and down the vertical chain of its activities.
As this one example shows, the forces of disruption can seem overwhelming. So how should economic development organizations (EDOs) respond to the challenge? The answers are far from definitive, but changing our perspective on the issue is a good place to start. We face challenges that will remake our professional landscape. We must meet these challenges—as a profession—if we hope to remain relevant. TIP proposes ten actions that EDOs can pursue.
Ten Actions for EDOs
1. Rethink target industries.
The industries we recruit should do more than provide jobs. We should be focused on those companies that provide value across a broad spectrum of industries.
2. Reevaluate threats to existing regional industries.
Traditional business retention efforts are essentially reactive. EDOs must look at technology trends that threaten to eliminate entire supply chains.
3. Engage with trade associations.
Insight into the direction industry is taking can be gleaned from active participation in trade groups. A high level of engagement around disruptive trends is a regular feature of these associations.
4. Involve your organization with higher ed (and the R&D associated with universities).
Technology commercialization is the infrastructure of economic development; it’s what the farm-to-market road was to our grandparents. Your higher-ed assets are the starting point for an innovation strategy. Nurturing these relationships can also open the door to solving local talent needs.
5. Act like a P3.
In other words, emulate the best aspects of public and private partnership. Work in the public’s best interest, but move with the flexibility and efficiency of the private sector.
6. Host events and conferences relevant to your community (along the value chain model).
EDOs attend trade shows but miss out on conferences that target the industries they are seeking to attract. Hosting events that build on local assets both garners recognition for the community and serves to attract companies.
7. Become a Smart City (or a Smart County).
Smart-city technologies need smart-city testbeds. Why not your community? Las Vegas – our host city for the conference – is a leader in this area.
8. Discover local tech talent (as contrasted with entrepreneurial support or incubators).
In the 21st century your workforce defines your opportunities—or otherwise sets the limits. Retain, nourish, and encourage talent.
9. Educate yourself.
Professional development matters, but the knowledge you need for success may lie outside the bounds of traditional professional development. Becoming tech savvy is a professional necessity.
10. Educate your board.
Successful EDOs are keenly aware of the role their board members play in setting policy. Ensuring that a discussion of disruption and long-term trends is part of the agenda is critical. Doing so will make adjusting policy and engaging the community at large much easier.