Creative Capital -- Economic Development More Than Money

Mrs. Madville Times and I are big boosters of sensible economic development. Alas, as we often note, we are rich in ideas but poor in capital. (Maybe that's why Dwaine Chapel at the Lake Area Improvement Corporation doesn't reply to our e-mails.)

Even we idealists can acknowledge that it takes money to make economic development happen. For example, Yankton's leaders are discussing getting in on the ground floor of a movement afoot to create a "technology corridor," a regional coalition of communities working together to draw technology-driven businesses. This South Dakota version of Silicon Valley could stretch from Yankton and Vermillion up to Watertown.

This vision of regional cooperation fits with what I heard this summer about promoting economic development by a regional strategy with neighboring communities as partners, not competitors. This vision will also cost money, as we ask communities to invest in technological infrastructure and (alas) business incentives.

But idea-people, take heart: the capital we need to build a technology corridor or any other big economic development project takes more than donations from the Chamber of Commerce types and tax subsidies from the rest of us. This N2TEC/SD-EPSCoR report [PDF alert!] says economic development is as much about culture as traditional capital. The report identifies these five significant barriers to technology-driven economic development in eastern South Dakota:

1. Lack of a vibrant and active entrepreneurial interface between the universities and the communities that would involve universities in regional economic development.
2. No “last mile” pathway for technologies developed at universities and other technical centers to translate those technologies into products that can be sold in the global marketplace.
3. Unwillingness to share knowledge and resources even within the same community for fear of losing credit for accomplishments.
4. Too few champions willing to take on the risk of a major effort.
5. Not enough focus on quality-of-life amenities needed to attract knowledge workers and keep university students in the region ["South Dakota High Performance Region Development," N2TEC Institute Report, August 2007, p. 5].

Notice that, with perhaps the exception of #2, these barriers call for a change in mindset, not money. We need creative thinkers and cultural stimulation. We need to support the creative thinking that is the heart of enrepreneurship and innovation. We need to promote the artistic endeavors that create the vibrant culture that attracts and retains high-income workers. The N2TEC report concludes that such "creative capital" is all the more important in the communities that don't have a university or technical college to serve as a hub for technology-driven development:

During our research on both the western and eastern sides of the state, we observed that many small communities, like Hill City, do not have universities or technical colleges, but they have an emerging creative community that is focused on art and culture and contributes to a quality of life that makes these communities very attractive.

Although our efforts have been focused on technology economic development, we cannot ignore the importance of creative communities to the success of the region as a whole. The arts and nonprofit sector comprise the “social sector” of any high performance region and remind us all of the importance of “doing well by doing good.” It is estimated that at least 30 percent of the national workforce belongs to the creative class, those who produce new ideas. Therefore, in communities like Hill City where technology-based businesses may not be the norm, a vibrant community can
still be developed by using the same entrepreneurial skills and attitudes that we propose for technology businesses to build an exciting community of artists of all types. Certainly technology can play a role even in this type of community as artists seek ways to share what they do with the global marketplace [N2TEC, p. 9]

What these folks say about Hill City is as applicable to Howard and Humboldt. Building a new Silicon Valley in South Dakota will take a lot more than money. It will take creativity and communities willing to embrace it.