Neil Tambe

I'm a Detroiter who happens to enjoy writing, national parks, orange juice, the performing arts, and fanciful socks. More than anything though, I aspire to be a good husband, father, and citizen.

Will the city benefit from economic growth initiatives? (Plus a framework)

In business and innovation, Teece's model helps you determine who will profit from an innovation. After learning about it, I got to thinking if that model - or a similar concept - could be translated to cities and regions. So I came back with a question - how do cities know if they will reap the benefits of an economic growth initiative? Here's a model to help answer that question. It's unsubstantiated by data, but it's an intuition that I'd love your feedback on.

THE MODEL

To determine if a city or region will benefit from an economic growth initiative, I propose mapping the initiatives along two axes: the type of growth the initiative intends to create and the source of new revenues created.

As it happens, the quadrant look curiously similar to the Michigan Model of Leadership.

  • Type of Growth - is the growth created because of a creating a new product or services that meets an unmet market need? Or, is it a product or service that tries to steal market share from a competitor?
  • Source of New Revenues - are the incremental revenues created generated from customers in the city? Or, are those revenues collected from people from another locality? In other words, are the revenues exports or not?

USING THE MODEL

A model for determining the sustainability of economic growth.

Using the model is simple. Note that the "city" is a placeholder term for the economic subdivision being analyzed. You could replace "city" with state or region.

Each quadrant has a distinct flavor. I've included notes in each quadrant to help economic growth teams determine the conditions under which they can reap the benefits from initiatives in each quadrant.

  1. Generate a list of all economic growth initiative for the city
  2. Map them on to the model. Initiatives that are 100% new products/services with cash 100% generated from non-local customers would go in the top right hand corner. And so on.
  3. Each quadrant has a distinct flavor. Look at where the distribution of all initiatives across the framework lie. Is it balanced? Should it be balanced?
  4. Look at the quadrant each initiative is in. Are the conditions in that quadrant met? If so, the city may reap the benefits of growth. If not, their ability to reap the benefits of growth will be handicapped.

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Does this model made sense? As an economic development professional, do you find it useful?