Quick Hits 06-09-2011

Economic Gardening

Economic Gardening is all the rage in current economic development circles.  I first discussed the concept after PM Magazine ran a cover piece in October 2010.  A very quick summary of Economic Gardening is that it fosters development, or job creation, from within the community.  The converse is more traditional ecomomic development procedures of business recruitment, or “hunting.”  Since last fall, I have caught several references – without even trying – including the following. 

  • Strong Towns Blog (including a podcast) (Do you garden or do you hunt?)
  • The book, Macrowikinomics, which cites a Kauffman Foundation statistic that 2/3 of net new jobs from businesses less than five years old.
  • NPR staple This American Life recently dedicated a segment on the the radio prgoram Economic Gardening as a function of economic development.

Failure Comes Before Success

Many argue that one of the fundamental tenets of America’s success in a capitalist system is its unmatched ability to experiment and innovate.  Yet, by and large America’s governments have not successfully implemented this model of success.  Author Tim Harford states the following, and much more, introducing his new book Adapt: Why Success Always Starts with Failure.

Ideally, I’d like to see many more complex problems approached with a willingness to experiment. The process has three components: first, try lots of different things; second, make sure the experiments are at a small scale so that when things go wrong, it’s not a catastrophe; and third, make sure there’s a reliable way to tell the difference between success and failure.

Governments often fall down on all three: they have a particular ideology and so push a single-minded policy; they bet big; and they don’t bother to evaluate the results too carefully, perhaps through overconfidence.

The company called Google (you may have heard of it), encourages its employees to use what it calls loosely “20 percent time.”  Employees can use 20 percent of their work time for to develop existing or new technologies for the greater benefit of the company.  You can here more about the story on this Freakonomics podcast from October.  The same podcast also discusses the Race to the Top Program, which is an initiative from the federal Department of Education to incentivize state governments to experiment with education methods.

The moral of these stories is that a number of small failures can lead to gigantic successes.  One has to be willing to risk failure. 

The Way We Think about Risk is Risky

Speaking of risk a recent Freakonomics post has an interesting perspective on how we associate risk with numerous activities.  Draw your own conclusions.