Published on March 24th, 2008 | by Tom1
How Local Economies Can Compete After the Jump Point
As the founding chairman and CEO of the economic development network, Joint Venture: Silicon Valley, over the years I have often been asked what makes regional economies successful. My answer invariably reduces down to a few essential characteristics. As the global economy approaches the Jump Point in the next 1000 days, those qualities are more important than ever.
First, it should be understood that regions compete against regions in the new global economy. In that view, a national GDP is actually the aggregate product of regional economies. Successful regions have within them export-oriented, industry clusters—food chains of competitive and complementary players. Economists call these agglomerations. These clusters usually include industry leaders or innovators, a specialized workforce, specialized suppliers and often at least one major academic or research institution.
The X factor is the support of the surrounding community, including local governments. That support always includes a positive regulatory environment, but the most important feature—the one I focused on as head of JV:SV–is that the community promotes connectivity. I don’t mean Internet connectivity here—although that is increasingly the medium of choice. Here connectivity means helping the members of the community connect to each other and then helping the entire region connect to the outside world. Communities can do many things to improve their regional economies and competitive position—everything from investing in research to providing superior or specialized infrastructure—but if they do one thing well it must be to connect participants and promote collaboration and cross-pollination.
In the run up to the Jump Point, the global competition between regions is going to get more intense than ever. The winning regions will be those localities that use the power of the network to organically grow new enterprises, attract new industries and jobs from elsewhere, and position local companies and products in global markets.