Much groundwork has been laid over the last few decades in developing an economic development vision. I recently came across a report from 1992 titled “Business Development in Davis” that suggested several strategic activities necessary to develop a strong economy. Many of the activities listed as important to developing fiscal sustainability and the rationale for the efforts are still pertinent today.
Though much has been recently written and discussed about economic development in Davis, it is important to note specifically that City and community leaders have been working diligently over the last few years to develop an economy that leverages unique opportunities. These activities have led most recently to the discussion of developing the emerging innovation ecosystem and identifying the key strategic goals that can be accomplished with limited resources. And although I am aware that active collaboration across sectors is required to accomplish these goals, let me discuss the efforts from the perspective of the City.
There is no roadmap or time-tested set of actions that make up the development of an innovation economy, especially as it pertains to efforts by a municipality. So staff has had to work diligently to outline a roadmap that is pertinent to Davis. Specific actions taken by the City over the past year in enhancing the Davis ecosystem might best be described in the book by Victor Hwang The Rainforest, where he outlines the elements necessary to creating an innovation ecosystem that will lead to economic vitality:
1. Innovation comes not from the basic ingredients of economic production, but from the way that people interrelate to combine and share ideas, talent, and capital. The community that facilitates such relationships is a biological system we call a Rainforest. Its animating process is creative reassembly.
2. Certain individuals and organizations we call “keystones” have the special ability to integrate disparate people, influencing them to act in ways that impact the entire system. They glue people together in the Rainforest.
3. People do not connect easily. Social barriers – based on geography, social networks, language, culture, and distrust – create transaction costs that prevent people from finding each other and working together. Human beings are wired to distrust one another.
4. A system can overcome barriers to human collaboration when people are motivated by extra-rational motivations, and when the transactions are less costly due to social norms we call the Rules of the Rainforest.
5. The Rainforest Recipe demonstrates how such systems are constructed, based on diversity, trust, motivations, and norms. Diversity is enhanced by mixing people from different social groups. Cultural behavior is learned through the Rainforest tools: real-world practice, role modeling, peer-to-peer interaction, social feedback loops, networks of trust, and making norms explicit through social contracts.
6. Capital must be designed as a service integrated into the Rainforest, not as an end in itself. It must be part of the social fabric, not distinct from it.
7. We measure the health of the Rainforest by watching the waves, not just the atoms or the overall ocean. The flow-form model – based on robust biological systems – emphasizes the velocity of ideas, capital, and talent flowing in the system. Lowering social barriers is like opening arteries to accelerate their flow.
(The Rainforest, by Victor W. Hwang and Greg Howard, published by Regenwald, Los Altos Hills, May 2012)
Using these elements as a guide, City staff have been focused on the unique opportunity to be a “keystone” in the Davis innovation ecosystem. By enhancing and developing partnerships and collaborations it is possible to leverage networks to induce activities that will more readily lead to sustainable economic vitality and quality of life.
The current City Council Goals that are supported by work on innovation and economic development include:
- FISCAL STABILITY: Ensure short- and long-term expenditures and revenues are equivalent, matching community resources to needs without reliance on growth.
- ECONOMIC DEVELOPMENT: Promote economic development consistent with our community values and niche as home of a world-class university.
- SUSTAINABILITY: Enact policies that strive to meet the needs of the present without compromising the ability of future generations to meet their own needs.
- DOWNTOWN DAVIS: Ensure downtown Davis remains the vibrant economic, cultural, and social center of the community.
- COMMUNITY STRENGTH AND EFFECTIVENESS: Create an environment at all levels of the City that encourages effective engagement and results in quality customer service delivery.
While economic development activities are most specifically outlined in the second goal above, the activities by staff engaged in innovation and economic development have impact on all of the listed goals by adding to the overall quality of life and economic vitality for the community.
Additionally, the City has broadened the use of the term Sustainability to encompass the three-pronged approach of environmental, economic and social sustainability, which is in line with current Davis values, Commission recommendations and Council efforts. This terminology is similarly being used by federal and State agencies and has been adopted across California by business groups and economic development leaders.
Based on these goals and concepts, staff are suggesting that the most effective use of resources by the City to conduct economic development activities would be to focus in the following strategic areas:
1) Facilitate Technology Business Development,
2) Increased University Engagement,
3) Expand Support Network for Local Business,
4) Strategic Branding and Marketing, and
5) Regional Leadership
Each of these activities is focused on the enhancement of Davis’ quality of life objectives and requires a cross-departmental approach inside the City to achieve service delivery. Economic development staff is often tasked to initially lead programs and activities and as priorities shift, the appropriate City department is engaged for continued support and implementation as required. It has also become the norm for staff to work with local and regional governments and business organizations to help bring focus and additive resources to that implementation.
Due to the cross-departmental nature of economic development activities, staff is requesting City Council input on the efforts of the innovation and economic development team so that staff can further implement a 24-month strategy working towards 5-year goals that leverages minimal resources for maximum outcomes in support of Council goals and priorities. Staff seeks Council support a focused, outcomes-directed economic development strategy due to limited staffing and the need for maximum impact in support of revenue growth that leads to enhanced quality of life and economic vitality for the citizens of Davis.
Davis has also demonstrated new regional leadership by working collaboratively with regional partners and creating a focus on Davis that highlights its unique culture, quality of life, and human capital. Coordination with regional, state and federal legislators has also led to early recognition for Davis and has resulted in evolving roles as a leader in the advancement of innovation, economic development and technology.
More recently, Davis companies and organizations have been increasingly recognized by the media and regional business organizations for their efforts that have helped to build an innovation and knowledge-based economy. These include recognition of several local companies and their founders as businesses leaders of the year, key appointments of local leaders in positions of regional leadership, and continued recognition of UC Davis for ongoing global efforts in research and development.
To take advantage of Davis’s unique position and regional leadership opportunities in building the innovation ecosystem, the City’s economic development strategy should be focused on the City’s strengths as a facilitator working in partnership with our local and regional business partners. The municipal leadership role is likely most effective in helping to create an environment for business success by determining and removing barriers that don’t serve a purpose for the common good. In that facilitator role, local government is most likely to be additive in achieving community-based strategic goals by creating the framework from which an innovation economy can thrive.