Johnathan Holifield: America21 presents Inclusive Competitiveness to Global Detroit

Building Inclusive Competitiveness in Metro Detroit
Johnathan M. Holifield
Co-founder and Chief Strategist & Evangelist
The America21 Project
johnathan@blackinnovation.org
www.blackinnovation.org

Global Detroit
TechTown Presentation
May 10, 2012

©2012 A21


Part I.
Peeling Back the Onion of
Metro Detroit’s
Innovation Economy and
Ecosystem

©2012 A21

What is the Innovation Economy?

America21 defines the Innovation Economy
as the period in the late 20th and early 21st centuries
marked by radical socioeconomic changes
brought about by the:
• further globalization of commerce
• democratization of information
• exponential growth of entrepreneurship, and
• acceleration of new knowledge creation

©2012 A21
2012 Copyright Johnathan M. Holifield, Principal and Co-founder, The America21 Project, Inc. and Founder, Trim Tab System, LLC

Innovation Economy Pressures: New & Unrelenting

Economic Crisis Squeezing Metro Detroiters

©2012 A21

Crisis Undermined Economic Competitiveness

Overview of negative Innovation Economy impacts on
Metro Detroit:
• Decline in traditional, industrial manufacturing
• Globalization of auto industry
• Dramatic population decline
• Inability to create new jobs
• Devastating crime
• Exacerbated racial tensions
• Talent flight – Black and White
• Negative quality of place impacts
©2012 A21

Economic Competitiveness Crisis Triggered . . .

“TAPIM”
©2012 A21

What is “TAPIM”?

• Thought
• Advocacy
• Policy
• Investment
• Market

Deeply understanding the progression is
absolutely crucial.

©2012 A21

“TA” Produced New Metro Detroit Economic Narrative

Led the way in articulating and inculcating a new narrative
to increase Metro Detroit economic competitiveness –
leading to the formation of new economic Policy. A21
©2012

“TAP” Led to New Economic Investment

Key assets providing new Investment to increase
Metro Detroit economic competitiveness.
©2012 A21

“TAP” Informed and Created New Economic Investment

Regional philanthropy $100M+ (8 yr) and
State of MI hundreds of millions of $$ to increase
Metro Detroit economic competitiveness. ©2012 A21

“TAPI” Triggered Market Response

Market connected into new “TAPI” to create
Metro Detroit’s innovation ecosystem – designed to
increase economic competitiveness. ©2012 A21

New “TAPIM” Created and Nurtures . . .
Metro Detroit’s innovation ecosystem

Recalling and deeply embracing the
progression is absolutely crucial.
©2012 A21

Building Inclusive Competitiveness in the Metro Detroit:

Part II.
Overview of Black and
Hispanic Businesses:
Good, Bad and Ugly

©2012 A21

Nationally, the Good News . . . Positive Trends

U.S. Census Bureau Reports between 2002 and 2007:
Hispanic-Owned Businesses Increase at More Than
Double the National Rate
 Hispanic-owned businesses increased by 43.7% to 2.3 million, more
than twice the national rate of 18.0%
 249,168 had paid employees, an increase of 24.9%
 Employed 1.9 million people, an increase of 25.7%
 Payrolls totaled $54.6 billion, an increase of 48.7%
 Receipts totaled $345.2 billion, an increase of 55.5%

©2012 A21

Nationally, the Good News . . . Positive Trends

Black-Owned Businesses Increase at More Than
Triple the National Rate
 African American-owned firms increased by 60.5% 1.9 million firms,
more than triple the national rate of 18.0%
 106,824 had paid employees, an increase of 13%
 Employed 921,032 million people, an increase of 22.2%
 Payrolls totaled $23.9 billion, an increase of 36.3%

©2012 A21

Metro Detroit Good News . . . Positive Trends

Black-Owned Businesses in Metro Detroit Increased at
Nearly Four Times the National Rate
 African American-owned firms increased by 71%, to 53,380 firms,
almost four times the national rate of 18.0%

©2012 A21

Bad News . . . Profoundly Unbalanced Contribution

U.S. Census Bureau reports the Hispanic population at
more than 50 million or 16.3% of U.S. population
 16.3% of U.S. population
 Hispanic Business Productivity is $345.2 billion
 U.S. Gross Domestic Product is $14.2 trillion

Bottom Line:
More than 16% of U.S. population accounts
for less than 2.5% of GDP

©2012 A21

Bad News . . . Profoundly Unbalanced Contribution

U.S. Census Bureau reports the Black population at
12.6% of U.S. population
 12.6% of U.S. population
 Black Business Productivity is $137.5 billion
 U.S. Gross Domestic Product is $14.2 trillion

Bottom Line:
Nearly 13% of U.S. population accounts
for less than 1% of GDP

©2012 A21

Ugly News . . . for the U.S.

U.S. Census Bureau reports the combined Black and
Hispanic population in the U.S. is about 29%

Bottom Line:
Nearly one-third of U.S. population accounts for less
than 3.5% of Gross Domestic Product

©2012 A21

Ugly News . . . Metro Detroit, Mecca of Black Business

U.S. Census Bureau reports the Detroit MSA Black
population at 23%
 23% of Metro Detroit population
 Black Business Productivity is $3.7 billion
 Metro Detroit Gross Regional Product (GRP) is $198 billion

Bottom Line:
More than 23% of Metro Detroit population accounts
for less than 2% of GRP

©2012 A21

Invisible Assets

According to Brookings, metropolitan areas contain 68 % of the
nation’s multiracial population, 74% of Blacks and 80%
Hispanics. America’s innovation assets are highly concentrated
in U.S. metropolitan areas where Blacks and Hispanics live:
78 % of patents
85 % of new firm starts
69 % of high-growth firms
75 % of GDP
68 %of jobs
96 % of venture capital
81 % of R&D employment
Assets are invisible to those disconnected from them
©2012 A21

Profound Consequences

Black unemployment rate double Whites – 40+ straight years!
“Job Growth in U.S. Driven Entirely by Startups”
Kauffman Foundation Study
The invisibility of the Innovation Economy to Black and
Hispanic Americans and their disconnection from it,
results in the absence of job creating high-growth
enterprises - a profound inability to create new jobs.
.

©2012 A21

Building Inclusive Competitiveness in Metro Detroit:

Part III.
Competitiveness:
The Economic Physics
of the Matter

©2012 A21

Law of Economic Competitiveness TM

No region can sustainably increase economic
competitiveness without growing enough of the right
people to create and take advantage of that increased
economic competitiveness.
If your region’s economic competitiveness goals
consistently outpaces your growth rate in the right people,
you simply will not – indeed cannot – build a resilient,
economically competitive region.
Inspired by Packard’s Law of Hewlett & Packard Co-Founder, David Packard

©2012 A21

Law of Inclusive Competitiveness TM

No region can sustainably increase economic
competitiveness without growing enough of the right
people to create and take advantage of that increased
If your region’s economic competitiveness goals do not
focus on inclusion, you simply will not – indeed cannot –
grow enough of the right people to build a resilient,
economically competitive region.
Inspired by Packard’s Law of Hewlett & Packard Co-Founder, David Packard

©2012 A21

Where we are . . .

In an increasingly flat and uncompromisingly
competitive 21st century world, we cannot afford to
have large portions of our population contributing less
than their full measure to the nation’s economic
competitiveness.

It’s time for All Hands On Deck . . .

©2012 A21

Building Inclusive Competitiveness in Metro Detroit:

Part IV.
Inclusive Competitiveness
Solutions

©2012 A21

Inclusive Competitiveness Crisis Triggers New. . .

“TAPIM”
©2012 A21

Follow the Proven Path . . .

Developing and implementing Inclusive
Competitiveness strategies responds to the same needs
and follows the same path that created Metro Detroit’s
innovation ecosystem.

Recalling and fully embracing Metro Detroit’s proven
path is absolutely crucial.

©2012 A21

Time for Inclusive Competitiveness “TAPIM”

• New Thoughts and
• New Advocacy to produce a new economic narrative
• New economic narrative informs new Policy
• New Policy attracts new Investment
• New Investment ignites new Market responses

Deeply understanding and fully embracing the “TAPIM”
progression is absolutely crucial.

©2012 A21

What is Inclusive Competitiveness?

Or

Benchwarmer Competitor
Metrics and strategies to improve Black and Hispanic
performance in areas important to Metro Detroit’s
Will we be benchwarmers or competitors?

How Is Inclusive Competitiveness Delivered?

New Individual Practices
New Organizational Practices

Bottom line: Trim Tab Practices


What are Trim Tab Practices?

Individuals and
Metro Detroit organizations
is the Ship are the
Trim Tabbers

Metro Detroit Innovation Economy assets are the Rudder

High-leverage individual and organizational actions that
turn the rudder and, ultimately, turn the ship in the
desired direction

Black and Hispanic Communities

• Lack high-leverage intermediary functions
• Lack high-leverage intermediary organizations
• Lack high-leverage intermediary practices

Existing economic leadership infrastructure is
necessary, but alone is insufficient

Bottom line: No Trim Tab Impact

Trim Tab Practices Yield Results

• Unique experience - may be only Black to Launch and
Lead Regional Technology and Innovation Initiative
• $600K into $5M of Entrepreneur Economic Impact
• $40M into $250M Early-stage Capital Network
• Innovation-based HS/Turnaround Education Model
• Regional Tech Workforce Alliance
• Statewide Innovation Organization Alliance
• $40M+ Grants, Cash, In-kind Support
Not the only way . . . a proven way

©2012 A21

Individual Trim Tabber Attributes

• Cannot incent right behavior from wrong people
• Treat problems like market opportunities
• Lead by Action, Persuasion, Influence
• Conspicuous Public Presence
• Flexible and Well-networked
• Strong Convictions
• No Fear of Judgment
• Energetic Creator


Organizational Trim Tabber Attributes

• Archimedes – “A firm place to stand . . . “
• Well-networked Facilitators
• Disinterested, Not Uninterested
• Hub, Spokes and Nodes Approach
• Honest, Objective Broker
• Flexible, Agile Drivers
• Entry/Outreach Portal
• Cross-ecosystem Leadership


Trim Tabber Focus Areas

Expressing and inculcating 21st century “TAPIM,”
focused on three basic pillars:
1. STEM (and STEAM) education
2. High-growth entrepreneurship
3. Capital formation and investment


Practice 1: Comprehend Speed of the Game

• Bo Jackson Moment
• High Bar for Everyone; Higher Bar for Us
• Further Democratization of Information
• Most Meritocratic Economic Era
• Money, Without Collateral
• Not the Civil Rights Struggle
• Flatter World
• No Magic

©2012 A21

Practice 2: Mine the Environment

• How Innovation Ecosystems are built
• Innovation Asset Urban Location
• 19th and 20th Century Asset Visibility
• 21st Century Asset Invisibility
• Making the Invisible, Visible
• End of the Day . . . The Market Must Respond

©2012 A21

Practice 3: Begin at the Beginning

• Measure competitiveness, not participation
• Innovation Asset Stewardship Mapping
Angel Networks/Venture Capital Sources/Banks
Innovation Councils/TBED Orgs./VDOs
Bioscience/ICT/Adv. Manufacturing Companies
University/Corporate Research Capabilities
Chambers/Econ. Dev./Philanthropy
Incubators/Accelerators

©2012 A21

Practice 4: “The Way” Over “The Thing”

• Simple Process (Way)
• Deployed on Diverse Content (Things)
• A.O.L.

Aggregate key wealth and resources
Organize them into actionable forms
Leverage them to achieve desired impact
©2012 A21

Practice 5: Be the Lubricant

• Engine Oil
• Public Policy
• “Private Policy,” i.e., the Big Metro Detroit Agenda
• Integrate into the Value Chain (Wetting Beaks . . .
Don Fanucci)
• Money

©2012 A21

Practice 6A: Encourage Entrepreneurial Churn

• Old Notions of “Economic Stability”
• Energy, Vitality, Creative Destruction
• No undefeated seasons

©2012 A21

Practice 6B: Encourage Entrepreneurial Churn

• No “defeated” seasons, either!
• Gotta have wins
• No to Risk-Averse
• No to Risky
• Yes to Risk-Astute

©2012 A21

Practice 7: Pursue Exponential Impact

• Leverage, Leverage, Leverage
• Measure Outcomes
 What gets measured gets done
 What gets measured and rewarded gets done well
• Aggregate Incremental/Exponential Breakthrough

©2012 A21

Practice 8: Embrace Asset Obsolescence

• Trim Tabber Role = flexible/enduring
• Innovation Ecosystem = adaptable/enduring
• Innovation Ecosystem Assets = constant change
• No Asset has “Right” to exist
• Only Support Assets Demanded by the Market

©2012 A21

Building
Contact: Inclusive
Competitiveness
Co-founder, Chief Strategist & Evangelist in Metro Detroit

Email:
or
jholifield@nortech.org

Phone:
216.274.0267

Johnathan Holifield: America21 presents Inclusive Competitiveness to Global Detroit

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