A Perplexing Economy

Recently a study of the Cleveland economy was commissioned, by a local real estate developer. It got the attention of local blogger John Ettore, who was then noticed by NEO super-blogger, George Nemeth. The study is summarized nicely:

"Cleveland is a perplexing economy," according to Dr. Christine Chmura, President and Chief Economist of Richmond-based Chmura Economics & Analytics, "It should be growing faster than it is because the industry mix is more favorable than the state and the region has so many attractive qualities such as the arts, cultural attractions, recreational opportunities, and professional sports teams."

The key word here is "should" -- emphasis mine.

So, the nodes seem to be in place -- industry mix, cultural attractions, etc. But the economic network/ecosystem is underperforming. Why? Maybe, it is lacking links -- the interconnections between clusters of knowledge and ability that make things happen and get things done in today's economy. Innovation happens at the intersections. Innovation creates new businesses and jobs. Innovation attracts other innovators -- people who know the dance, and want to be with others that know the dance.

Silicon Valley[SV] is known to be a place of innovation. A recent example illustrates the power of intersections. Apple did not create the iPod by itself. It did so with several SV neighbors who had the tech/knowledge that Apple did not have -- innovation happens at the intersections. Apple then took the design created in California, by the intersected firms, to its international network and got it built and distributed.

We all know "It's the economy, stupid!" And in today's economy: "It's the connections, stupid!"

Is it possible that the Cleveland economy looks like this -- many players, many islands, few intersections?


Whereas, the Silicon Valley economy might look like this -- many players, no islands, many intersections.  Ideas and knowledge cross-fertilize in many combination and mixes.


Originally published December 2, 2007