Collaborate, Collaborate: Dance to the Music!

By

Samuel Leieken & Randall Kempner, Collaborate: Leading Regional Innovation Clusters, Washington D.C.: Council on Competitiveness, 2010.


“There’s a high flying bird, Flying way up in the sky
And I wonder if she looks down, as she goes by?
Well, she’s flying so freely in the sky.

Lord, Look at me here
I’m rooted like a tree here
Got those sit-down,
Can’t cry, oh Lord, gonna die, blues”
— Jefferson Airplane

The awareness of regionalism has prospered greatly from its linkage and relationship to the clusters approach and cluster’s derivative approaches (innovation, knowledge-based economic development, and entrepreneur or start up). Central to this policy momentum was the Council on Competitiveness which, first in 2001 published Clusters of Innovation: Regional Foundations of U.S. Competitiveness (Michael Porter and F. Duane Ackerman), followed by a 2005 report in conjunction with EDA, Regional Innovation/National Prosperity, and its latest work, Collaborate: :Leading Regional Innovation Clusters. This month we intend to look at the latest report, Collaborate, and offer our usual mixture of review, explanation, and outlandish critique.

Collaborate… is intended to provide some direction and insight into what has proven to be a serious impediment to the successful implementation of clusters et al based approaches. The impediment they address is the disjointed linkage between economic regions… and the governmental jurisdictionsCollaborate, we think, is intended to provide some direction and insight into what has proven to be a serious impediment to the successful implementation of clusters et al based approaches. The impediment they address is the disjointed linkage between economic regions and regionalism (where all the good things occur) and the governmental jurisdictions (that make the decisions and provide the resources for regional initiatives and from which only bad things result).

“Because the United States does not have political jurisdictions that correspond to economic regions, it does nothave adequate mechanisms to make decisions on a regional basis. As a consequence of this fault line, meaningful regional action requires a unique kind of leadership…. Collaborate takes innovation-led regional economic development to a new level by addressing the question of what kind of leadership enables regions to harness their individual strategies and unique assets to accelerate economic growth, job creation, and prosperity. (P.5)

As the Curmudgeon has discussed in the first issue (January, 2011) of the new Journal, clusters are a very popular, if not the dominant, alternative approach to conventional or traditional economic development (whatever that is). Clusters and its associated set of program initiatives have never lacked for prestigious and distinguished advocates, and as far as academics and consultants go, cluster publications, articles, and services almost rival the military-industrial complex associated with the Defense Department (perhaps an exaggeration, you may be able to buy an aircraft carrier cheaper than an input-output table).

In the warped and disheveled mind of the Curmudgeon, in today’s world, it is almost impossible to delink regionalism and clusters and treat them separately.But as indicated in our adjoining article in this issue, clusters have also provided momentum in recent years and somewhat resurrected a rather tired, old Progressive reform recently relabeled “regionalism”. In the warped and disheveled mind of the Curmudgeon, in today’s world, it is almost impossible to delink regionalism and clusters and treat them separately, although they are two distinct concepts with quite different histories, assumptions and methodologies. They share constituencies, however, and reflect some overlapping values and concerns.

The marriage of clusters and regionalism seems to some, especially to Collaborate, at least partially explains why some regions are more successful than others “in global competition”. Collaborate asserts that “(T)he early evidence from regions like San Diego, the Research Triangle and Greater Austin suggested that the ability to link innovation assets-people, institutions, capital and infrastructure- is decisive in generating robust, localized ecosystems that turbo-charge a region‟s economy. These regions are successful precisely because they have connected the region‟s basic innovation assets.” (P.8)

Clusters, regions and innovation, however popular, turbo-charged, charming and ever so delightful as they may be, apparently exhibit some unattractive attributes. And it would appear that the young couple and their progeny have had some difficulty in finding a home in our metropolitan areas. In fact, Collaborate concedes the point that comprehensive implementation has not been either widespread or easy. The purpose of their report is to develop some principles and guidance for regionalist and cluster advocates to increase receptivity to the young newlyweds. The solution Collaborate advances is to develop and facilitate a regional leadership cadre which can promote specific initiatives which not only keep alive the marriage, but can take it at least one forward step to finding a permanent residence in the metropolitan area.

Regional Leadership can lead to regional collaboration. The existence of a regional leadership cadre is the first step toward developing a consensus on the appropriateness of a region and overcoming jurisdictional fragmentation.Regional Leadership can lead to regional collaboration. The existence of a regional leadership cadre is the first step toward developing a consensus on the appropriateness of a region and overcoming jurisdictional fragmentation. Using the euphemism “regional conversation” Collaborate stresses that regional conversation can lead to a second step, “connection”. Connection means, in the Curmudgeon’s interpretation, some form of joint action or involvement. It can be networking, joint initiatives, teams, almost anything where individuals can work together to pursue a consensus on regionalism and regional action. The third “C”, after conversation and connection is capacity. By that Collaborate seems to mean an ongoing regional program (or leveraging assets-whatever that might be?). The programs need not be comprehensive or full blown regionalism, but involve just an issue, a policy area, or a very specific and narrow program. A regional leadership cadre is the operative mechanism to navigate through the three “C”‘s.

Chapter 2 in Collaborate is a series of case studies of five specific regional initiatives across the nation: Silicon Valley, Southside Virginia Tobacco initiative, Louisville consolidation, Metro Denver Scientific & Cultural District, and the Western Michigan Strategic Alliance. The lessons of these examples include: “The forms of organization vary from region to region”, but commonalities such as “strong leadership from the business community”, evolution of a coalition into a more formal organization, and above all TAKING ACTION. Regional leaders are “DOERS”. (P.37)

Regional leadership can “act regionally and think globally”. (P.38) As such regional leadership ought to perform several tasks if regionalism and cluster success is to be achieved. First, leadership must “tell the region’s story” or develop “a unifying narrative that creates a shared sense of identity” (P.38). Secondly, leadership must “get the right people at the table to do the right thing” (P.39), to bring “diverse individuals and organizations together. Thirdly, the actions of the leadership should “produce regional value” which, the Curmudgeon must confess leaves him a little fuzzy, but involves “aggregating demand”, consolidating services, and “leverages regional resources” all of which, somehow, “prohibits sub-regional entities from disparaging one another”. The fourth task, building an “innovation ecosystem” (P.40) which is the optimization of cluster-derived benefits and advantages (what we previously labeled as the progeny of the marriage of region and clusters. A fifth task is to “establish new regional rules of the game” (P.40) or a new business model, replacing the “zero-sum scenario” of every jurisdiction for itself, which future regional leaders can embrace or launch future regional initiatives. The sixth and final task is to “establish indicators and metrics” (P.42) which the Curmudgeon senses is crucial to addressing inherent region and cluster weaknesses associated with its lack of visibility and a poorly defined “place”.

Just whether these tasks are sequential or stepwise is not developed in Collaborate, and given their tendency to what outsiders could label as jargon, is hard to determine if any one task leads to, follows from, serves as a

prerequisite for another or if they should all be combined within a regional leadership cadre initiative. Nevertheless, the combination of these tasks with the previous case studies strongly suggest that a regional leadership cadre and its initiatives can take many, many forms and exhibit multiple variations in style, purpose and action. Collaborate however, does seem to draw at least two conclusions from the linkage of tasks with case studies: (1) regional leadership organizations are coalition builders (P.44) and (2) “at the core of regional coalitions, there is usually a business-led or business-driven organization”. (P.45)

Chapters 4 and 5 address regional leaders as individuals. As individuals these leaders exhibit several characteristics. They are regional champions with a “passion for regionalism”. They are “bridge-builders and boundary crossers (literally meant i.e. cut across silo boundaries of jurisdictions and agencies). Regional leaders are “conveners”, frequently perceived as neutral arbiters “who are above the fray” (this seems at cross purpose with possessing a passion for regionalism which does not strike the Curmudgeon as very neutral). Most importantly, regional leaders are “drivers” (again, not very neutral) and keep the agenda moving forward and in this instance Collaborate has in mind two specific types of individuals: a “new breed” of economic developers and a second grouped in metro chambers or other business organizations. The latter seems more organizational than individual but given that Collaborate stresses the need to create a regional style organization, the two obviously will need to blend.

a regional leadership cadre and its initiatives can take many, many forms and exhibit multiple variations in style, purpose and actions.Collaborate intimates, but does not state outright, that individual leaders will possess several qualities or “habits” which either are an integral part of the leader’s personality or can be to some extent taught or learned. These habits include: being proactive, begin with “end in mind” (which we think they mean a vision), “seeking first to understand, then to Be understood” which means gathering facts on which to make a sound judgment, putting first things first or leaders who are “guardians of the big picture-vision, goals and strategy, thinking win-win and being inclusive, and finally “synergize”. (PP. 56-59). One habit the Curmudgeon believes should be included in this hodge-podge mélange of verbs and truisms is “saying what you mean clearly” so that somebody has a half a chance of understanding what it is you are saying and what it is you want. This last chapter could benefit from the addition of that last unmentioned habit.

The Dark Side of the Force: the Curmudgeon reacts

Regional leadership may or may not enhance the appeal of our young couple (regionalism marriage with cluster)–but the Curmudgeon suspects not. The young couple has not been accepted, he believes, for two really deep and basic reasons. Collaborate leaves it to the Curmudgeon to elaborate upon what some of these unattractive features of the young couple may be.

First, to the Curmudgeon a key explanation for the reluctance of most metro areas to the newlyweds is that the young couple, for all their charms and beauties, cannot be seen with the naked eye of the average person or elected official. Rather they must be viewed through a math-derived, computer generated series of input/outputs which look great on the screen in the presentation hall, but disappear once one steps outside into the light of day. If you can‟t see the young couple, neither can you really touch them because they are not solid or tangible. This amorphous quality of a cluster/region makes it rather difficult to figure out how well or badly it is doing or, for that matter even what it is doing. For those of us who are congenitally incapable of penetrating the mists of math, this makes evaluation and accountability pretty problematic. The uncertainty can breed distrust, discomfort or at least apathy.

The academic, almost “virtual” reality of clusters/regionalism and their progeny frankly do little to excite the average resident in our metro areas… and are not frequent topics of discussion at the local Kiwanis, PTA or American Legion HOTspotsThe academic, almost “virtual” reality of clusters/regionalism and their progeny frankly do little to excite the average resident in our metro areas. Accordingly, clusters and regions (innovation and entrepreneurship also) are not very popular at your local citizen gathering holes or the Friday night high school sports event, and are not frequent topics of discussion at the local Kiwanis, PTA or American Legion HOTspots (see below for an explanation of the pun). Also, seldom mentioned by advocates, regionalism and clusters don’t necessarily benefit everybody except in the most indirect ways. For example, many of the cluster-based initiatives, focusing on growing clusters and high knowledge occupations (gazelles and the like) as they do, leave out most of us who live our lives working in dying and deceased clusters employed in collapsed occupations characterized by broken and missing rungs on the career ladder. Therefore, voters, not surprisingly seem unable to relate to clusters, perhaps (as advocates seem to imply) because by definition voters are not usually included in the knowledge-based economy and are the ultimate cause of what prevents government jurisdictions from being receptive to regionalism and clusters.

Collaborate, rather, identifies the culprit for this lack of success in that the “United States does not have economic regions that are coterminous with political jurisdictions”.If one can accept the Curmudgeon’s description of the young couple, the average citizen/resident’s distrust, discomfort, or at least apathy may well explain why Collaborate is rather pessimistic in its prospects for an immediate future wave of regionalism and cluster. But this is not the case for Collaborate. Collaborate seems unwilling to accept the Curmudgeon’s description of the young couple. Collaborate, rather, identifies the culprit for this lack of success in that the “United States does not have economic regions that are coterminous with political jurisdictions”. (P.9) Hence “Despite the growing need for collaboration, regional action is still the exception rather than the rule. To paraphrase an old saying, regional collaboration remains an unnatural act between non-consenting adults. Existing jurisdictional boundaries, tax policies and cultural rivalries undermine regional action.” (P.9) or, while “multi-county areas are the appropriate unit for economic analysis and planning, the necessary collaboration across political and institutional boundaries has not kept pace. The question then becomes, „how does collaboration become a reality in regions‟?” (P.10)

This reluctance by jurisdictions to embrace the young couple prompts Collaborate to embark on a detailed explanation of the benefits Collaborate associates with a region adopting a cluster-based, Knowledge-based, innovation-based (what for heaven‟s sake is this “base” they keep on talking about?) metropolitan wide economic development program. Without regions and clusters, they assert, our metropolitan areas will never grow or compete effectively. The future consequence of a failure to accept the young couple is that other nations will. Nations, like Singapore (which has “HOTspots-or Hub of technopreneurs) which has adopted regionalism and clusters will topple our feeble growth machine. “Don’t these jurisdictions realize that” would seem to be the unarticulated cry of Collaborate?

For Collaborate, jurisdictions (cities, towns, counties, villages etc.) however appear to have at least temporarily won, however, and we have to deal with them for the immediate future. It is at this point that the Curmudgeon sees yet another reason for why advocates of the young couple have such a hard time with the average citizen/resident/elected official (the denizens of a jurisdiction). How did we got by and actually grow economically in the 18th, 19th, and 20th centuries previous to regions and all this cluster stuff. The Curmudgeon doesn’t have an answer, and he suspects the average citizen, resident and elected official will ask this question as well. Jurisdictions didn’t inhibit past economic growth and why, even in a global world, why would they necessarily prevent future growth. Why change what is not broken.

Blame it on the Founding Fathers

If regionalism and clusters (innovation, knowledge et al.) are so obvious the key to future growth and the most effective strategy to compete globally, why does it have such an uncertain probability for successful implementation? Answer: Our current federalist system and structure does not accommodate it.So at this point, it may be worth our while to step back and re-phrase the question the Council is asking in its Collaboration report. If regionalism and clusters (innovation, knowledge et al.) are so obvious the key to future growth and the most effective strategy to compete globally, why does it have such an uncertain probability for successful implementation?

Our second answer is so obvious it can be briefly presented. Our current federalist system and structure does not accommodate it . As is well known, the American governmental and constitutional system operates though a three tier federal, state and local system. Any adjustment to this, including a fourth regional tier requires a constitutional amendment. End of that discussion; it isn’t happening any time soon. While the woods are fairly full of federal agencies such as EDA (CEDs) and NIST (MEP), workforce (DOL) and HUD empowerment zones creating something akin to a region, they seldom, it seems, corresponds to a defined economic region and they are limited to departmental programs.

But, you counter, any state could create its own three tier sub state system which could inject a regional tier. True enough. This is not generally pursued by regionalists because (1) many economic regions lie across state boundaries and hence need federal constitutional sanction; and (2) the variation from state to state, not to mention the timing and probably the politics of each state’s action would to some extent defeat the national uniformity of the regional tier. Fighting the regional cause across all fifty states is a daunting task, and most likely would require the advocates to leave the Beltway or the classroom. Hence, the Curmudgeon suspects, the need to To the extent that there would be an intervening fourth tier, regionalism, find and train regional leaders.

To the extent that there would be an intervening fourth tier, regionalism, the federal government could through appropriate legislation create an administrative tier similar to the Tennessee Valley Authority. These days getting anything approved by Congress and signed by the President does not seem like a viable strategy. In truth, it is a difficult strategy in any period of time and the frailties of the legislative process both before and after passage of the legislation invite some skepticism as a reasonable solution.

Lacking as they do a constitutional home base, regional initiatives, however well trained the regional leadership may be in for some trying times.The same could be said for individual action by each of the fifty states (perhaps similar to New York‟s newly elected Governor Cuomo’s initiative). In fact many states have already created regional planning districts, et al. In fact as the Curmudgeon looks over the various state organizational landscapes, it would appear that many forms of regional districts and regional organizations exist already and could be candidates for housing our young couple. Also, in the last decade or so, a number of relatively new structural entities, many if not most, tied to the micro-economic cluster approach have been created. In particular, there are a number of new EDO (economic development organizations) types such as the university-housed EDO. Nested somewhere in the (usually state) university corporate structure these EDOs are usually a department, sometimes an actual subsidiary nonprofit, which seeks to advance a targeted sector or cluster industry (technology or bio-tech, medical devices, life sciences et al). Using university resources, these departments often seem to be following many of the prescriptions advocated by the cluster regionalists. What aren’t these EDOs a suitable home for our young couple and their progeny? The likely deficiency of this option, however, is that these administrative units do not have sufficient powers, to tax for instance (or forgive taxes). They are not a level of government.

Why does it have to be a level of government? The Curmudgeon suspects there are three reasons. The first is the power to tax. The second is the power to abate taxes. The third is the power to prevent or inhibit lower tier jurisdictions from doing the usual nasty they are doing at present. As always the Curmudgeon may be wrong or flat out too cynical, but a university-led EDO does nothing to inhibit the current fragmentation of the natural economic region or cluster

Conclusion

If the past is any guide, Collaborate will be an important report which sets the future priorities of much of the Beltway literature. As such, one can expect the marriage of clusters and regions to continue as a major policy initiative in future years. The progeny of this marriage, innovation, entrepreneurship, knowledge-based, workforce enhancement, picking winning clusters and tossing or ignoring the stagnant and the losing clusters will continue to be a focus. How will affect the 8000+ local and county EDOs across the nation may be anyone’s guess, but it is hard to see how these initiatives will penetrate the headwinds of our current politics and economics. Lacking as they do a constitutional home base, regional initiatives, however well trained the regional leadership may be in for some trying times. The success of these regional and cluster initiatives, the Curmudgeon believes would be most enhanced if the issues identified in this article and our companion article could be effectively addressed.

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