This document discusses economic development strategies focused on open-source approaches and building networks. It emphasizes that communities will prosper in the current economy by developing brainpower, innovation/entrepreneurship, quality places, community identity, and civic collaboration. Extension can play a role by connecting stakeholders, supporting entrepreneurs, and facilitating discussions around issues and opportunities. Success requires integrating perspectives and growing networks to foster new ideas and innovations.

1. Extension’s Vital Role in Open-
Source Economic Development
Galaxy III
Celebrating the Extension System: Strengths, Diversity, &
Unique Qualities
September 17, 2008 – Indianapolis, Indiana
Scott Hutcheson, Assistant Program Leader
Economic & Community Development
Purdue Extension

2. Economic Development 101
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

3. Our Grandfather’s Economy
First Curve – Wealth
driven by vertical business
models
Wealth was built at a rate the world had
never before experienced

4. The S Curve Caught Up with
Our Grandfather’s Economy
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

5. The First and Second Curves
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

6. We live in an Open-Source World

7. We live in an Open-Source World

8. From Hierarchies to Networks

9. The 2nd Curve is Our
Grandchildren’s Economy
Second Curve – Wealth
driven by network business
models

10. The job of our generation is to manage the transition
between our grandfather’s economy and our
grandchildren’s economy.
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

11. Open Source
Economic Development
Linking and
Leveraging
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

12. Open Source
Economic Development
No Single Strategy Many Strategies

13. OSED Strategies Are
Asset-Based
2nd Curve strategies involve linking and
leveraging assets in five “asset
networks:”
– Brainpower
– Innovation
– Quality places
– Community Stories
– Civic Collaboration
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

14. Success in the 2nd Curve
Communities will prosper in the Second Curve
with balanced strategies that...
– Build world class brainpower
– Translate brainpower into wealth through
innovation and entrepreneurship networks
– Create quality, connected places where “hot
spots” can develop
– Create new stories about the community
– Continuously strengthen habits of civic
collaboration

15. Integration of Perspectives
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

16. Building Word-Class Brainpower
• Early Childhood
• Pre-K
• K-12
• Technical programs
• Community college • Brainpower
• Universities
• Workforce Development
• Lifelong Learning

17. The average community knows more about its solid waste
system than it knows about its brainpower system.

18. Mapping Brainpower Flow
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

19. What is Extension’s Role in the
Brainpower Game?
• Be seen as an Extension of the
university – the entire university
• Bring STEM/SET resources to the
community
• Bring stakeholders together to map the
flow of brainpower

20. Innovation &
Entrepreneurship
• Introduction of new products &
processes each year
• Only 15% of businesses are typically
innovators – usually have high growth
trajectory
• When 50% of business are
innovators you have an
entrepreneurship/innovation culture

21. Innovation is Not Just “High
Tech”
• A BBQ restaurant starts bottling and selling
sauce
• A dry cleaners develops a new “green”
process and licenses the new process
• A beauty shop develops a new way to train
stylists and goes nationwide
http://www.acenetworks.org/upload_files/file/Regional%20Flavor%20June.pdf

22. A Tale of Two…
• Entrepreneurs
• Cities

23. A Tale of Two Entrepreneurs…
and Two Cities
• Founded in Washington (State) in 1971
• Initial investment - less than $8,000
• 2006 sales were $7.8 billion
• Created 145,800 jobs
• This is their founder

24. A Tale of Two Entrepreneurs…
and Two Cities
• Founded in Washington (State) in 1971
• Initial investment - less than $8,000
• 2006 sales were $7.8 billion
• Created 145,800 jobs
• This is their founder
• This is their logo

25. A Tale of Two Entrepreneurs…
and Two Cities
• Founded in Washington (State) in 1971
• Initial investment - less than $8,000
• 2006 sales were $7.8 billion
• Created 145,800 jobs
• This is their founder
• This is their logo

26. A Tale of Two Entrepreneurs…
and Two Cities
• Founded in Indiana in 1985
• Initial investment - less than $2,000
• 2006 sales were $1 billion
• Created 14,743 jobs
• This is their founder

27. A Tale of Two Entrepreneurs…
and Two Cities
• Founded in Indiana in 1985
• Initial investment - less than $2,000
• 2006 sales were $1 billion
• Created 14,743 jobs
• This is their founder
• This is their logo

28. A Big Difference Between
Starbucks and Papa John’s

29. A Big Difference Between
Starbucks and Papa John’s

30. The Billion $ Question
What makes a
community
“sticky” when it
comes to its
entrepreneurs?

31. We’re finally beginning to learn
about Entrepreneurs

32. Think of Innovation and
Entrepreneurship as a Horserace

33. Innovation & Entrepreneurship: A
Horse Race
• The Horse – The Innovation

34. Innovation & Entrepreneurship : A
Horse Race
• The Horse – The Innovation
• The Jockey – The Entrepreneur

35. Entrepreneurship
• The Horse – The Innovation
• The Jockey – The Entrepreneur
• The Track – The Community

36. Community Support Systems for
Innovation & Entrepreneurship
Taking Care of
the Track

37. The Innovation and
Entrepreneurship-Supportive
Community
• Supportive policy environment
• History, culture, institutional memory
• Attitudes about failure
• Collaborative support organizations
• Celebrate innovations andentrepreneurs
• An information-rich environment

38. Who’s Job Is it to Tend
to the Track?
• Chamber?
• LEDO?
• Elected Officials?
• Banks?
• Schools/University?
• Extension?

39. Economic Gardening
http://www.littletongov.org/bia/economicgardening/

40. Economic Gardening
• Littleton, CO developed and began to
execute the strategy in 1989
• Focused on “wealth” creation not “job”
creation
• Eliminated all incentives and tax breaks for
business recruitment
• Since 1989, more than doubled the
number of jobs from 15,000 to 35
• Sales tax revenue tripled from $6.8 million
to $19.6 million

41. Economic Gardening
• Information
• Infrastructure
• Connections

42. Entrepreneurship Business
Information Network (eBIN)
• Inspired by the Economic Gardening Model
• Partnership of
– Purdue Krannert Business & Economic Library
– Purdue Extension
– Small Business Development Centers
http://pcrd.typepad.com/ecd/2007/08/coming-soon-to-.html

43. Help entrepreneurs answer questions like:
– What other products or services are out there that are
similar to mine?
– Who are my potential customers and how do I reach
them?
– What are my potential customers like?
– What are the latest trends in my industry?
– What legislative issues could effect my business?

44. eBin Data Resources
Marketing Lists
• Business & Company Resource Center - US and International
company database with profiles, financials, rankings, company
history, industry overview, and related associations.
• Reference USA - US company database that includes subsidiaries
and divisions. Provides brief profiles and contact information with
very powerful search capabilities for generating lists of potential
customers or competitors.
Industry Trends
• Bizminer - Contains market analysis and financial analysis for 100s
of industries. Excellent source of information for small business
planning with 3 yrs of data for developing projections and financial
targets.
• MarketResearch.com (Academic) - Demographic and market-
specific research information.
• Frost Market Reports - Manufacturing and technology-related
market research information. Coverage is international in scope.

45. eBin Data Resources
Customer Profiles
• Choices III - Survey of consumer buying and media habits.
Significant flexibility to determine potential target markets and
advertising opportunities.
• MediaMark Reporter - This database provides profiles of American
consumers - who they are, what they buy, what they think, and how
to reach them.
Journal Articles and Business News
• Business Source Premier - Business magazine and journal article
databases; significant full-text with deep historic back file. Also
contains company profiles, SWOT analysis, industry profiles and
market research briefs.
• Factiva - General news, magazines, business news, international
publications and US newspapers content. Also contains public
company profile/financial information.
• Regional Business News - Regional (US & International) business
magazines.

46. eBin Data Resources
Legislative
• Lexis Nexis Academic - US laws, regulations
and court cases at the national and state
level. Also contains significant
news/newspaper content as well as company
information.
• RIA Checkpoint - Tax laws, rulings, and
regulations.
Agribusiness
• Agricola - Agricultural database of journal
articles and research reports.

47. Innovation Isn’t Only about New
Enterprises
We need to build
networks to help
existing business
be more
innovative?

48. An Innovation and
Entrepreneurship Strategy

49. Identifying Innovation Assets

50. Linking & Leveraging Assets
• Move university innovations into the region’s
“star” industries
– Identify Strongest Regional Clusters
– Identify Relevant university Innovations
– Recruit Pilot Industries
• Use an Enterprise Wide approach to move
innovations into industry through:
– Tech Transfer
– Technical Assistance
– Skill Development at all levels

51. Unlocking Rural Competitiveness
• Funded by the U.S. Economic Development
Administration
• Research conducted by the Purdue Center for
Regional Development and the Indiana Business
Research Center

52. Unlocking Rural Competitiveness
Database, analytical tools, and
processes to help rural regions
assess their economic
competitiveness and create
strategies for growth and
development
http://www.ibrc.indiana.edu/innovation/

53. Tools: County-Level Cluster
Analysis
17 Clusters and 6 Sub-Clusters
1. Advanced Materials
2. Agribusiness, Food Processing and Technology
3. Arts, Entertainment, Recreation and Visitor
Industries
4. Biomedical/Biotechnical (Life Sciences)
5. Business and Financial Services
6. Chemicals and Chemical-Based Products

54. County-Level Cluster Analysis
7. Defense and Security
8. Education and Knowledge Creation
9. Energy (Fossil and Renewable)
10. Forest and Wood Products
11. Glass and Ceramics
12. Information Technology and Telecommunications
13. Transportation and Logistics
14. Manufacturing Supercluster (6 subclusters)
• Primary Metal Manufacturing
• Fabricated Metal Product Manufacturing
• Machinery Manufacturing
• Computer and Electronic Products Manufacturing
• Electrical Equipment, Appliance and Component
Manufacturing
• Transportation Equipment Manufacturing

55. County-Level Cluster Analysis
15. Mining
16. Apparel and Textiles
17. Printing and Publishing

56. Example: Agribusiness Cluster

57. Innovation Strategies
• Nano-structured Coatings – Innovations for
tool and die shops
• Energy Efficiency – Immediate cost savings
for energy-intensive manufacturers
• Agribusiness Supply Chain Innovations –
Focusing on supply-chain issues at every
level in the supply chain

58. Nano-structured Coatings
•Match a industry need (i.e., tool and die shops) with a
university innovation
•Integrate the innovation into the industry
– Tech Transfer
– Technical Assistance
– Skill Development – Nano-structured Coatings Technologist
•Integrate into the community college tool-and- die program
http://news.uns.purdue.edu/x/2007b/071025BozicWIRED.h
tml

59. Extension’s Role in
Entrepreneurship & Innovation
• Make E&I a topic of discussion in the
community.
• Connect to non-Extension university
partners.
• Host innovation showcases.

60. Civic Collaboration
• New perspectives
• New skills

61. Types of Public Issues
From Heifetz, R. (1998). Leadership without Easy Answers. Belknap Press.

62. Types of Public Issues
From Heifetz, R. (1998). Leadership without Easy Answers. Belknap Press.

63. Types of Public Problems
Type 1
Fix my pothole!

64. Question
What Type II and III community
issues have you experienced?
- Type II – Clear Problem/Unclear Solution
- Type III – Unclear Problem/Unclear Solution

65. Balance Open Participation
with Leadership Direction
• No single person,
organization, or
institution has all the
answers
• No one is in charge
• Mass participation
AND strong leadership
is needed
Source: Ed Morrison, Distributed under a Creative Commons 3.0 license.

67. Civic Collaboration: Social
Network Theory
Social Anthologist J.A. Barnes coined the
term in his 1954, Class and Committees
in a Norwegian Island Parrish.

68. Social Network Theory
Social network theory views social
relationships in terms of nodes and links.
Nodes are the individual actors within the
networks, and links are the relationships
between the actors

69. Six Degrees of Separation
Almost everyone has a
“small world” story.
What’s yours?

70. Social Network Theory
Applications
• Sociology
• Anthropology
• Information Technology
• Organizational Development
• Community and Economic Development

71. Building Community by
Building Networks
Assumptions
• Communities are built on connections.
• Better connections usually mean better
opportunities.

72. Building Community by
Building Networks
Questions
• How do we build connected
communities that can take advantage of
opportunities?
• How does success emerge from
complex interactions?

73. Two Components of a Network
Nodes Links
People, groups, Relationships,
or organizations flows, or
transactions

74. What’s the Value of ONE
Cell Phone?

75. What’s the Value of TEN
Cell Phones?

76. Patterns of Effective Networks
1. Birds of a feather flock together
2. Diversity is important
3. Multiple paths between nodes
4. Some nodes are more prominent than
others
• Hubs
• Brokers
• Boundary spanners
5. Most nodes connect indirectly

77. Networks MUST Grow
A non-growing network results in small
and dense clusters with little or no
diversity. The lack of outside information,
and dense cohesion within the network
removes all possibility for new ideas and
innovations.

78. Network Building Exercise
• Exchange business
cards with someone
you do not know
• Find one thing you have
in common
• Decide on a follow-up
activity
– phone call
– information exchange
– introduction

79. Knitting the Net: Four Phases
1. Scattered Fragments
2. Single Hub-and-Spoke
3. Multi-Hub Small World
4. Core-Periphery

80. ACEnet Case Study
ACEnet provides a
wide range of
assistance to food,
wood, and technology
entrepreneurs in 29
counties of
Appalachian Ohio

81. Scattered Fragments

82. ACEnet: Scattered Fragments
Began weaving the network by asking questions:
• From whom do you get new ideas that benefit
your work?
• From whom do you access expertise that
improves your operations?
• With whom do you collaborate?

83. Hub and Spokes

84. ACEnet: Creating New Hubs
AC
Kitchen Incubator
became a hub for
restaurateurs
and farmers

85. Multi-Hub Small World

86. ACEnet: Multi-Hub Small World
• Farmers Market
• Outdoor Café
• Restaurant
Association

87. Core/Periphery Network

88. ACEnet: Action at the Periphery
Developed the Appalachian Ohio
Regional Investment Coalition to bring in
additional resources.

89. Core/Periphery Network
• Core includes the key community members
• Periphery includes three groups of nodes
usually tied to the core with looser ties:
– Those new to the community working their way to
the core
– Bridges to diverse communities elsewhere
– Unique resources that reside outside the
community

90. Networking Worksheet
1. Scattered Fragments
2. Single Hub-and-Spoke
3. Multi-Hub Small World
4. Core-Periphery

91. Becoming a Network Weaver
Network “weaving” is not just
networking or schmoozing!

92. Seven Levels of Network
Weaving
7. Introducing A and B in person and offering a collaboration
opportunity to get A and B started in a successful partnership.
6. Introducing A and B in person and contacting A and B afterward to
nurture the connection.
5. Introducing A and B in person.
4. Doing a conference call introduction of A and B
3. Doing an email introduction of A and B
2. Suggesting to A that A should talk with B and then contacting B to
let B know to expect a call from A
1. Suggesting to A that A should talk with B

93. Moving from Weaver to Facilitator
• A facilitator identifies new weavers who
will eventually take over most of the
network building and maintenance.
• If the change is not made, the network
remains dependent on the central
weaver and his/her organization.
• This transition is needed for the network
to increase its scale, impact and reach.

94. Starting with a disconnected community,
network builders can start weaving together the
necessary skills and resources to build simple
single hub networks, followed by a more robust
multi-hub network, concluding with a resilient
core/periphery structure – maximized for
learning and implementation.

95. For More Information on Social
Networks
Much of this material was adapted from
the work of Valdis Krebs, developer of
INFLOW software. See www.orgnet.com
for more information.

96. Strategic Doing Helps Us
Build Networks

97. We need to move our thinking from events
and “programs” to processes….
Communities are moving toward civic process that focus on
Strategic Doing

98. Strategic Doing
1. What could we be doing together?
– Exploring our assets to find new opportunities
2. What should we do together?
– Focusing on one opportunity at a time and defining, as clearly
as possible, the “strategic outcomes” we want.
3. What will we do together?
– Launching new initiatives by aligning our resources with “link
and leverage” strategies.
4. What are we learning together?
– Learning what works by executing and measuring what
happens

99. Web 2.0 Tools Are Needed

100. Web 2.0 Tools
• Blogs
• Wikis
• Capturing & Sharing Content
• Forums

101. Web 2.0 Tools
http://shoutyoungstown.blogspot.com
http://www.chicowiki.org

102. Extension’s Role
• Developing community-based social
networks?
• Being a catalyst for Strategic Doing?
• Adopting and promoting Web 2.0 tools?

103. Contact
Scott Hutcheson
Purdue University
Purdue Extension Economic & Community Development
Purdue Center for Regional Development
1201 West State Street, #227
West Lafayette, Indiana 47907-2057
(765) 494-7273
hutcheson@purdue.edu
http://pcrd.typepad.com
http://pcrd.typepad.com/ecd
This presentation is available for download and discussion at the
Purdue Extension ECD blog – http://pcrd.typepad.com/ecd