Friday, January 05, 2007

Economic 'garden' set to sprout?
Marlene Kennedy

Here's a new entry for your business lexicon: economic gardening.
It's the idea that successful communities cultivate or grow their own businesses, rather than relying on a few big national or international firms for new jobs. Homegrown companies develop deep roots, the thinking goes, and so become interwoven into the fabric of the community to everyone's betterment.

It got on my radar last month when the Times Union brought site-selection consultant Robert Leak to the Capital Region to speak at our Capitaland Quarterly breakfast for community leaders. Leak saw economic gardening as equally important to the region as the incentives package that enabled us to land Advanced Micro Devices Inc. last year.

The Denver suburb of Littleton, Colo., is credited with developing the concept in 1989 following a layoff by the area's largest employer, Martin Marietta. City officials were upset that their economic health was being determined by an out-of-state company and so directed the city's business/industry affairs office to come up with some ideas.

Christian Gibbons, now director of the office, says he was the city's economic development chief then and worked with others in Littleton government to scour the research of the time to come up with the award-winning idea.

They liked the studies into job creation being done at the Massachusetts Institute of Technology by David Birch that showed big-company "recruiting coups" were responsible for less than 5 percent of a community's new jobs, despite the headlines they generated. Instead, the majority of new jobs were produced by small, indigenous businesses.

So Gibbons and his colleagues decided to build from the inside out: that local entrepreneurs creating new companies were the primary source of jobs and wealth, "and that the job of economic developers should be to create nurturing environments for these companies," he says.

But it wasn't that simple, Gibbons found. Not every small business succeeded and not every entrepreneur who took a "How to Write a Business Plan" seminar saw his or her company take off.

So Gibbons et al. refined their ideas (again, based on Birch's work): It wasn't small business as a whole that created new jobs by the barrowful but the nimble, fast-growing companies -- known as "gazelles" -- led by CEOs who embraced change and risk.

These companies learned to operate at the "edge of chaos," straddling stability and innovation to move forward. That meant "the most vibrant economies (in terms of producing jobs and wealth) were highly unstable in the sense that they had the highest rate of business start-ups and business deaths," says Gibbons.

And the temperament or "culture" of the community played a role, too. Did local citizens embrace change, or were they risk-averse? Were they content to have outsiders control their destiny, or did they support the entrepreneur

By the late 1990s, Littleton's economic gardening concept was raking in accolades. But its authors were still refining their ideas, particularly in how to build an environment that supported entrepreneurs -- both culturally and structurally.

Littleton concentrated the latter in three areas: information (making available, for instance, data-base services usually affordable only to large companies), infrastructure (not only highways and traffic lights but parks and trails and community college courses in e-commerce) and connections (to think tanks, trade groups, industry research and other CEOs).

You can read Gibbons' account of the maturation of the concept of economic gardening -- he sees it as still a work in progress -- at economicgardening, the Web site of his office in Littleton. And you can read about Robert Leak's talk to local community leaders in the next issue of CQ, our quarterly business publication, in the Times Union on Sunday.

And then you can ask yourself whether this area, likely the home of a new AMD computer chip manufacturing facility in the next decade, is doing enough economic gardening.

We have many flavors of programs that teach the basics or offer support to local entrepreneurs, through chamber, community and college initiatives. Is that sufficient? Do we embrace risk-takers? Can we surf the edge of chaos with them? You decide.

Business Editor Marlene Kennedy can be reached at 454-5492 or by e-mail at

All Times Union materials copyright 1996-2007, Capital Newspapers Division of The Hearst Corporation, Albany, N.Y.

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