Intelligence by Nick Youngson CC BY-SA 3.0 Alpha Stock Images
I had a lot of feedback to the blog on Smart Economies, which surprised me. I’d imagined everyone was on holiday.
Anyway, thank you for the calls and emails (you know who you are). I’d promised to reply, so I’m going to use this blog to do so.
Some of the comments were along the lines of “what are you trying to get at?” and “what does this have to do with councils?”
One of the points I was hoping to make: “Smart economies look at countries that are ahead of them, to gauge how they themselves can do better. China is a smart economy: here’s why. China has declared that catching up with more prosperous countries is just table stakes. The real goal is to anticipate the next source of value and become proficient at it.”
Leap-frogging, rather than catching up, is the key to long-term prosperity. If you try to reach the runner ahead of you, by the time you get there he or she will be further ahead. If you want to beat them, you can’t aim to be where they are. You have to aim ahead of them.
In an economy, that’s conceptually harder than it is in a race. In a race you have a fixed finish line. Hopefully, you know where it is.
In economies, you have to make a call as to where the next ‘finish line’ will be. You have to ask: “what are the next drivers of value?” Where they are feasible for your own country or state or area, you then have to focus on them. None of these conceptual exercises is easy. Each is the mental equivalent of a 4-minute mile.
What will be the next driver of economic value? What will be a source of national prosperity in three, five 10 years’ time? I happen to think that smart cities and IoT are major contenders. I could be wrong.
Others make compelling cases that medtech is a top contender. Someone else says clean coal. Governments have a lot of candidate “economic drivers” clamouring for their attention.
Having picked the top three or four likely industries of tomorrow, how does a government incent them? A command economy may be able to order its state-owned enterprises to focus on technology X (although this is a simplistic idea of how they work); but in the market economy, you can’t do that.
A bunch of tax-related incentives may work, but may not. Grants are a double-edged sword. Recipients of grants are sometimes those who are good at working out how grants work, rather than good at ‘the next thing’.
As to: “how does this apply to councils?” – I’d love to tell you that. I do have some thoughts, for what they’re worth, but, I’ve run out of space.
Smart thinking isn’t: how can I catch up with the leaders? Even less is it: how can I hold the next man back? Especially if you’re a leader.
It’s something more like: how do I get (stay) ahead of the leader? Which direction are we going? Where’s the finish line? Is there a finish line at all?
Not easy, huh?
