Could Table Top Holograms be a Boon to the Virtual Pet Industry

Finally a hologram we can own in our own homes. What surprises me is how cheap the i-Lusio is. It kind of makes me wonder if if the creator wouldn't benefit some from increasing the price just a bit. Still with the cost so low I'm taking advantage of this, and I believe that over time many more people well take advantage of this especially as we see interesting apps develop for it and for other holograms that are sure to follow.

So could this cause a boom in the Virtual Pet industry?

Virtual pets have had an interesting and often strange history. One of the strangest virtual pets I ever owned was Seaman. Though it's actual interaction was limited it was still fun to talk to him for short periods of time. What's more he was the third most successful game for the Dreamcast in Japan.



More recently the 2008 version of Seaman was released on Sony Playstation and sold some 300,000 copies.

Petz (now owned by Ubisoft) has had a longer lived and wider appeal selling over 23,000,000 copies as of 2006 according to Ubisoft's website, so virtual pets are big business, and affordable holograms promise to make the industry even bigger, at least for a little while.

Though as with any industry holographic pets well likely eventually see a short period of rapid expansion, bringing entrepreneurial dreams true before the industry begins to contract to some extent. In order to truly benefit long term from holograms companies will need to think of more unique ways to utilize this technology, and as the internet has shown us it's often difficult to predict at first what those will be.

Regardless of what direction this takes what I like most about this is that it has the potential to spark an increase in the demand for the work of artists, and AI programmers something we could all benefit from.

30% more time to watch TV, Read Books, and Play Games Thanks to Robots

play chess with robot by ~cuson

Robots are about to spark a revolution, but this revolution won't involve Skynet or the destruction of humanity. Instead this revolution will mean that more books, more computer games, and more movies will be sold. 


Quick question, are the number of books and web comics you read, movies and shows you watch based on your income or the amount of free time you have?

The answer is likely both as most people will tend to fill their free time with some form of activity so given the low or no cost of many forms of entertainment I would argue that the biggest barrier to growth in the entertainment industry is often a lack of leisure time.

Robots will increase the free time people have 
which in turn will increase the amount 

of entertainment people consume.

The primary impact robots have is to increase productivity, that is, to allow us to make more things. This is important because the more things that can be made the more money there is...

There are many arguments about what robots will do to jobs in the long run, but historically increases in productivity have created jobs and caused people to move from one industry to another, they have also (along with unions) decreased the number of hours people work. While not always positive this decrease in working hours does increase leisure time. In fact according to the Economic History Association the amount of life time leisure hours a person has will increase from an average of 176,100 in 1995 to 246,000 in 2040. That means that in the next 30 years or so we will be able to consume perhaps as much as 30% more entertainment and robots will be responsible for much of this increase in free time.

Of course whether we fill this demand with entertainment or things like social media is still up in the air, but I would say that there's a good chance that demand will increase in all of these areas.

In the next 30 years the time we have to
read books, play computer games and watch
 movies will increase by nearly 30%

The real question is, however, will this increased consumption, that is this additional free time bring more money into the industry? The challenge that entertainment industries will face is that people can spend more time on a single game (such as World of War Craft) and the same amount of ad dollars are typically spread over more mediums as additional mediums come into being.

Even increased sales, however, don't necessarily mean additional artists can break into the industry. So the questions we have to ask ourselves are; will increased leisure time increase the money earned by the entertainment industry? And even if additional sales are generated will these additional sales create new comic books, or simply allow large companies like Marvel to sell more units?

The answer to these questions depend on how many opportunities authors have to sell and engage the public outside of the internet and traditional retail stores. So for example how  much comic book conventions, meetups and events increase. Book stores only have so much space and people don't browse very far on the internet so the most popular things are the only things people typically find in retail outlets whether on or offline. However at comic book conventions people browse a bit more and meet a few more people. Further these events and other meetups allow some people to build a local reputation which will let them sell locally. So if comic book conventions and local meetups continue to expand than it's quite possible that this increase demand could come with an increasing number of jobs in industries like comic books where local niche people, supported not by the internet but by conventions, events, and most of all extra leisure time provided by robots are able to find fans and a market.

More than just increasing or decreasing sales of comics, changes in work habits will change peoples perceptions and the art in general. In Japan for example the fact that so many people have been pushed into dead end part-time jobs sparked an interest in activities like "Maid Cafes" as people search not only for something to occupy their time but to give them a few moments of emotional gratification, something which has greatly impacted the story lines in manga. This search for emotional gratification has also increased consumption of computer games and manga which can fulfill this need as well.

Part of the problem we see is that many of the jobs which are created by gains in productivity require people to be socially skilled, such as in sales, management, events planning, independent contracting, etc. So those who are socially awkward are often the ones left with the most free time and most unfulfilled feelings. That means that specific personality types will consume the greatest amount of entertainment, altering artists perception of what will be successful.

So how do you think more leisure time will change the industry? And will this have an impact on the art which sells.

Web Comic of the Week - No Rest For the Wicked

Okay, so I admit it I'm a sucker for a good story, even though I studied animation (in addition to economics of course) I still think story often trumps everything else which is why I'm loving "No Rest for the Wicked" Its got a story that makes me jealous I didn't think of it.

Blizzard-Activision could reap more money

The money for new creative efforts in computer games has all too often gone to those outside the industry. Having their revenue gobbled up by corporate owners who have interests outside computer games has likely stifled the industry and the art to some extent. Even Blizzard-Activision, one of the largest game makers, has been beholden to Vivendi, a company which deals primarily in music and mobile, but no more. Blizzard-Activision will likely soon become the second largest independent game maker in the world (after Nintendo) when they buy up another 50% of their shares from Vivendi, leaving the company with only 12% of the Game Maker.


Being independent will allow Blizzard-Activision to use all it's profits to develop additional games, or make it's existing games more expansive. It will also likely free them up to make decisions faster, because no matter how much freedom they were given it's likely they still had to ask Vivendi's permission to spend hundreds of millions of dollars. Of course whether or not they take advantage of these things is still to be determined.

The problem is that there aren't a lot of examples of large purely independent production companies in any industry, Pixar was briefly an indie film maker, Image and Dark Horse represent independence in the Comic Book World and of course Nintendo does in the computer gaming world. This lack of case studies does make it difficult to predict exactly how this move will shake up the industry and the art form of computer games.

Even so I'm optimistic about this deal... I do have some concerns about the cost of creating new franchises like Titan (Blizzard's next planned MMO which is intended to be a new game franchise), as well as the decay of existing franchises like WOW. If Blizzard-Activision is going to gain long term success they likely do need to find cheaper ways to discover what will be a hit than the sometimes hundreds of millions spent to develop some MMO's which often don't score very well. Perhaps the most successful MMO, World of Warcraft, based on lower cost Warcraft games, has the answer in that providing more artists more freedom to explore games and story telling on lower budgets could give companies the opportunity to create more expansive games that have a greater chance of success.

The reason for the growing income disparity

Up until the mid-seventies productivity gains meant greater increases in income which makes sense given that more productivity means that more money exists to pay employees, and since those employees are making more many they are more valuable.

Yet now wages are no longer tied to the value a person brings to a company.

So what caused this to change?

1-An increase in the number of potential employees world wide began to grow faster than productivity gains, because while productivity tripled in Japan, China, Korea, Taiwan, Eastern Europe, and more recently countries such as Brazil, these countries also began to require more and more jobs. At the same time the number of people in the U.S. looking for jobs began to grow for a number of reasons.

Bottom Line is that the more people who are applying for the same job, the less any company has to offer to fill the job with a skilled employee. So skilled jobs will pay less.

2-Inflation wasn't reduced as it should have been. 

Normally the decrease in income and an increase in productivity would have meant that the cost of living should have decreased as it became cheaper to build products. However, while many things such as computers, food, and other similar items have all fallen drastically in price the cost of living has not decreased substantially. Why not?

Housing

The rapid increase in housing prices meant that people had to pay more for a place to live which increased inflation and prevent costs from dropping to some extent.

Part of our productivity gains are going 

to pay for more expensive housing.

Technology 

In the seventies the average household owned a single TV, the price of which was decreasing every year. However with VHS/DVD/Blueray, HDTV, Cell Phones, Computers, Internet, Cable and more the number of things each household spends it's money on grows to replace dropping prices of other items. This also means that those providing services and selling products have to charge more in order to get the things they want.

College

Increases in tuition prices have mushroomed out of control, which in turn means that those who graduated have less and less money.

Health Care
People are paying for things they never would have dreamed of which is putting more strain on nurses and doctors who also have to pay higher tuition costs, as well as other factors are pushing up the cost of health care which requires business owners to charge more for their products in order to afford the care they need.

3-CEO Pay 

CEO's and other executives have taken substantial pay increases during the time in which wages have remained stagnant for most people. However, this rapid increase in CEO isn't substantial given the size of the overall increase in the amount of money made.
Further Executive compensation began falling in the late 1990's but this changed nothing as far as median income growth is concerned. 

http://www.economist.com/blogs/graphicdetail/2012/05/ratio-ceo-worker-compensation

4-Regulations

Regulation costs have increased over 7% in just the last four years, they now account for over 1.75 Trillion dollars in cost to businesses. Which means that 1.75 trillion dollars has to be taken out of peoples pay checks to pay for regulations. If your curious that is about $11,000 per person who has a job in this country (US is currently employing about 150 million people) That means that the seven percent increase in regulation just cost you about $800 in pay. 

(Source for regulation costs Washington Times)

5-Gas and Resource Prices

More and more people want to buy a limited resources, so what happens? Yes prices go up, and that's exactly whats happening with gas and those increasing prices are decreasing your wages.

6-Government Debt

The increase in government debt has pushed up inflation a lot by decreasing the value of the money you own.

Solutions?

Now we come to the fun part of every problem, the solution.

1-Decrease regulations and create smarter regulations.

Dropping the cost of regulations by 30% would see an additional $3,300 per worker added directly to the economy. What's more it would allow more businesses to start up and stay in the United States.

2-Give shareholders greater control over Executive Pay in order to try to keep costs down.

3-The government needs to stop artificially finding ways to increase the cost of housing. Housing isn't a winner for everyone, those who don't own houses are trapped outside the system and even those who do become burdened with greater risk when these bubbles pop.

4-Decrease the cost of college and healthcare (Most all current plans being tried increase these costs)

5-Increase peoples options in job training so that its easier to learn how to become carpenters, a skilled manufacturer, etc. 

Screen Writers are a Better Investment than Actors

Writers have a much larger influence over movies than actors do. To put this into numbers the top ten writers earned an average of over 161 Million dollars for each of their movies in the box office. At the same time the top ten actors earned a mere 72 million dollar average per movie.

Movies by the Best Writers earn twice 

as much as those by the top actors.

It is true of course that actors have more projects than writers, a lot more, but that shouldn't mean that their movies do more poorly on average especially  given the capital opportunities invested to secure them for a film. In the case of the top ten highest paid actors this investment is often nearly as large as the films promotional budget. In other words actors are valued as much as all pr and advertising, but imagine for a moment a film that did no advertising, showed no trailers, had no critics review it. How well could such a film do no matter who the actor was?

When its easy to see that the numbers don't add up why do these numbers continue?

Our Beliefs Determine Our Reality

Case Study: Global Warming and the Weather

Many might ask how it is that even when faced with an ever growing mountain of evidence some still don't believe global warming is real? The problem is that evidence isn't usually what makes people believe what they believe. There are a number of natural biases built into humans that cause them to interpret data to fit their pre-exisiting beliefs and desires while avoiding data which would challenge them. Of course if you think I'm just going to accuse one side of this problem you don't know me either.
Those who believe in Global Warming are quick to blame every hurricane, every tornado, every blizzard on Global Warming. No matter how often scientists say that global warming wasn't responsible for the weather event. Yes many bad weather events are caused or made worse by global warming, but blaming every weather event on it is ludicrousness. The most deadly Typhoon in history hit Vietnam over a hundred years ago.

Here are the highlights from the Geophysics Fluid Dynamics Lab;

1-It is premature to conclude that human activities--and particularly greenhouse gas emissions that cause global warming--have already had a detectable impact on Atlantic hurricane activity. That said, human activities may have already caused changes that are not yet detectable due to the small magnitude of the changes or observational limitations, or are not yet properly modeled (e.g., aerosol effects).

This is not to say that global warming won't cause hurricanes and make them worse, in the next couple of decades, as their report goes on to say that;

2-Anthropogenic warming by the end of the 21st century will likely cause hurricanes globally to be more intense on average (by 2 to 11% according to model projections for an IPCC A1B scenario). This change would imply an even larger percentage increase in the destructive potential per storm, assuming no reduction in storm size. 

3-There are better than even odds that anthropogenic warming over the next century will lead to an increase in the numbers of very intense hurricanes in some basins—an increase that would be substantially larger in percentage terms than the 2-11% increase in the average storm intensity.  This increase in intense storm numbers is projected despite a likely decrease (or little change) in the global numbers of all tropical storms.

4-Anthropogenic warming by the end of the 21st century will likely cause hurricanes to have substantially higher rainfall rates than present-day hurricanes, with a model-projected increase of about 20% for rainfall rates averaged within about 100 km of the storm center. 

So as usual the far ends of both sides of an issue are wrong about that issue, because they both ignore facts.

Recognizing, Avoiding or Using Bubbles and Gold Rushes

A bubble is an over-excessive interest in a single or limited number of markets that ends with such a dramatic crash that the economy as a whole suffers. I use “gold rush” as a term for excessive growth in a specific industry which crashes but doesn't end in a general recession such as the temporary over-interest in Beanie-Baby-type plush toys. 

While there have always been bubbles and gold rushes, the increasingly chaotic nature of capital along with the increased number of people involved in the markets, will likely continue to increase the occurrence of bubbles and gold rushes. As time goes on, we’ll find more and more of the world’s capital is held by private people and is no longer under the control of major institutions. In other words, non-savvy investors will continue to have an increasing pull on where money goes, which means that decisions will be made by people with very little understanding of the market. Further, because these people can buy things instantly over the Internet, we’ll find that these transactions are able to occur so quickly that when people are prone to panic or to get excited about something, then money will move in mass regardless of what more-experienced investors and buyers might think.

Another challenge we’ll face is that there won’t necessarily be a substantial increase in the number of companies that exist simply because there are more customers or more regions to service. This means that while lots of new companies will enter most every industry, as the market for that industry grows in places like China, India, and Brazil, either the new companies will put existing businesses out of business or will go under themselves over next decade or two. This means that every new market presents dozens of gold rushes or bubbles. So your strategy has to be increasingly aware of the dangers and opportunities presented by the dozens of gold rushes which will alter society.

Avoid the Gold Rushes and Bubbles

Gold rushes and economic bubbles are emotional responses in which people over-exuberantly seek after something by investing more time and money in it than the market can return to it. I use the term “gold rush” to describe this because of the fame of the gold rushes in Alaska and California in which tens of thousands of people gave up everything to travel across the world in search for gold, but only a handful of people actually got rich in their search for gold. Similarly, Warren Buffett points out that thousands of car companies once existed, but most of them went under so now there are only a few major car companies. Most recently, thousands sought a safe investment in housing only to have that industry and the value of their property and the loans associated with housing collapse. Gold rushes lure people in with promises of easy riches that rarely ever pan out for very many people in the long term. Because a gold rush is something many people rush into but few people earn money on, a gold rush doesn't have to be large or global; it can also be small. A few years ago, dozens of new playing card and plush toy companies started up to take advantage of what seemed to be rapidly growing industries with a low barriers to entry, but most of these new companies eventually failed before these industries reached much more than a billion dollars in revenue. So while the social impact of most bubbles is minimal, their impact on the businesses connected with them can be substantial.


Identifying the Gold Rush

1) Rapid value increase.
Anything that increases in value rapidly is in serious danger of collapsing, but this is especially true if its value is increasing much faster than the money it’s generating. This is what happened with the dot-com bust. The value of the dot com businesses increased faster than their actual earnings did. It’s important to realize that this doesn't mean that the Web wasn't worth what people thought it was; it just took a lot longer for it to get there than it did for people to invest in it. Further before the dot-com bust, much of the value of the Web wasn't yet understood. Search Marketing, Rich Media, Social Networks, logistics networks to support large Internet retailers such as Diapers.com--none of these things existed in a substantial way before the dot-com bust. These were the things, however, that needed to exist for the Internet to meet its full potential. So without them most Internet companies crashed leaving many who entered it early without jobs and many of those who invested in it with huge financial losses.

2) Lots of competitors but only a few possible winners.
Business tends to be about consolidation. Hundreds of car companies turned into three companies, for example. As a general rule, if there are a lot of competitors in a field that is new, most of them are going to fail to make money when the smoke clears. This means that while an industry can continue to grow in revenue, the likelihood of succeeding in that industry can be low. Online video went through this same thing with an untold number of companies trying to start streaming companies only to have their business fail even as the revenue that companies like YouTube, Hulu, and Netflix generated increased.

3) Barriers to real growth.
The growth of an industry is based on resources that may be limited or which have suppliers or governments which are likely to block its growth. This is essentially what the gold rush was. There was only so much gold to be had, so, in the end, only a limited number of people could get it. 

This same event often happens a lot at the local level. If a new major business moves in and promises to buy from three or four vendors, then dozens, sometimes hundreds of local vendors, will build their strategies around getting that limited pool of money, which means that dozens or hundreds of businesses will fail. I saw this occur in Philadelphia where Casino moved into the area, and suddenly hundreds of businesses were trying to build their strategy for survival around becoming one of the five or six vendors the Casino hired.

Another common, limited resource which far too many small businesses go after is Oprah. Out of the hundreds of businesses I’ve spoken with, nearly a quarter spent a significant portion of their time and PR strategy on trying to figure out how they might get on Oprah’s show. Yet she can only have a few hundred out of millions of potential guests a year.

4) Increasing amounts of excess product.
This occurs when something grows in such popularity that people build more of it than is actually needed. This can be said to be partly what was responsible for the housing bust. Millions of new houses were built that had no people living in them. In fact, more houses and condos were built than people would realistically buy. So eventually, the companies building houses had to go under, and the value of houses overall had to fall.

5) Creates its own change in society.
Some industries change society causing production costs to increase or prices to decrease. Take the consumer electronics market, for example, in which products such as microwaves saw rapid declines in the price points they could sell for as the number of companies competing in the industry grew to meet increasing demand. Ultimately, these lower price points destroyed the earnings that the companies which made them could expect, putting many of them out of business.

6) Over-zealous promotion.
When ads and news reports about how great a business field is to get into saturate the airways, when an business segment suddenly inexplicably gets its own category in financial news even though it only makes up a small portion of an overall industry or economy its likely that field is an economic bubble. Sure, exuberance can signal increasing value, but it also lures more people into a small industry than can actually make money at it. Remember that new entrants hurt your business’s strategy so it can become impossible to build an effective strategy in an industry that has thousands of new entrants every year.

7) Fads.
It’s often hard to predict what’s going to be a fad and what’s not. However, things like collectibles, fashion, and cultural movements are very often fads which pass with time. If you are over the age of 30, you should be aware that a number of cultural movements have come and gone in your lifetime or at least have shrunk substantially. Grunge, Gothic, Punk, and now Hipster movements have all seen their market base start to deplete or alter forcing those businesses focused on catering to these groups to alter or go under.

8) Easy to replace and pirate.
Replacement products and pirating have become a way of life and will likely destroy most creative industries. We have already seen the music industry crash due to pirating. Manga, which was also growing in popularity rapidly, has crashed in the United States due to online pirating of the books. Computer games could be next as people discover new ways to get their favorite products for free. Moving beyond the entertainment industry, creative industries such as web design and logo design could run into trouble as template websites grow in popularity making it easier for companies to replace or reduce the amount they pay these designers. Indeed, in the modern world, technology and global competition can threaten to replace the products of any American business.


Current Bubbles
There are three primary bubbles which currently exist; the "Green Economy," social media and China.
Green Technology is a bubble because it utilizes rare earths - a limited resource which hinders its growth and because only a small percentage of the businesses in Green Tech well succeed in developing a new technology while most well go under.
China is a bubble because China hasn't developed it's own brands and so the manufacturing which has allowed it to grow can be moved. Further so many people have rushed into the economy that they have over stimulated it which means that most of them have been failing and will continue to fail, even if China's economy continues to grow.
Social Media has created more excitement than it's current financial value should indicate. When the valuation of Facebook is believed to be approaching a hundred times their earnings it should become obvious that their value is over inflated. As of yet almost no one has figured out how to earn the amount of money on social media that it's valued at.


Embracing Gold Rushes and Bubbles

The idea that bubbles are all bad is an extreme oversimplification. Bubbles rapidly advance society and create infrastructure. What’s bad are the shattered dreams and lost jobs that happen after the bubble. So those are what we need to avoid while embracing the good aspects of bubbles.

Positive Aspects of Bubbles to Take Advantage Of

1) Bubbles can rapidly advance society.
Imagine where we’d be without the railroads or the thousands of entrepreneurs who worked to find better ways to create automobiles. Think about the Internet and how much that has advanced many aspects of society. At least in cases not involving speculation or limited resources, bubbles come into being in part due to something expanding faster than the rest of society can support it. The dot-com bubble is a good example of this in which IT companies came into being and developed new technology faster than society adopted those technologies or people were able to figure out how to make money of them.

2) Bubbles create infrastructure.
Bubbles leave behind a new infrastructure that can be used not only to recover from the bubble but to continue to drive the economy. Railroad mania created the infrastructure for American manufacturing to grow. The Mississippi Company bubble advanced paper money which helped improve commerce. There would likely be no Google without the dot-com boom, and imagine for a moment what California might be like without the Gold Rush that went bust. Silicon Valley is in California for a reason. Would it exist if California weren’t a highly populated state?

Warning! Not all bubbles create great infrastructure, however, as the government tends to outlaw certain things after their bubbles burst, typically involving finance. Imagine if after the dot-com bubble, the government had outlawed Internet companies, or if after the railroad bubble railroads had been outlawed? This is exactly what happens every time there’s a finance bubble.
Why do you need to know this? Because with the government tying the hands of the infrastructure that drove the economy or an industry for years, economic recoveries take longer. So you need to react differently to these types of bubbles than other ones.


Taking Advantage of a Bubble

Taking advantage of a bubble is tricky at best. Again, the reason it’s a bubble is because so many people are rushing into it that most of them won’t earn money. There have been, of course, a number of millionaires who came out of a bubble even as their companies failed. Further, the chaos-created bubbles give companies an opportunity to move ahead of their competitors or to consolidate and solidify their position as a leader.

1) Get in early or late.
The first thing you need to determine with any bubble is if you should jump into it early on or later on. Technology is often easier for late entrants rather than early ones. GM came after Ford and hundreds of others and superseded them, and Toyota came way after all of them. More recently, Google, Facebook, and a number of the other new online tech companies entered the field after the dot-com bubble had collapsed to become the most successful companies in their industry. Entering late offers the following advantages: it allows the new entrant to see how the existing companies are weak; those coming in later can learn from a number of failed strategies and have more of a knowledge base to build their initial strategy on.

In other fields, those coming in early have the advantage. Coke in the cola industry comes to mind. They gained the early mover advantage because there was so little difference between them and competitors that being first gave them the right to call themselves the original. Further, coming in early can allow a business to earn a war chest or to spend on infrastructure which will allow them to survive after the bubble pops as Amazon.com did during the dot-com bubble.

2) Take advantage of the infrastructure once it is in place.
At the end of a bubble the infrastructure is in place to continue growth in an industry. At the end of the dot-com crash, Internet companies started finally making serious money, and people had just started to really use the Internet in large numbers. Thus, web designers among others were able to continue work after the dot-com bubble if they had developed a good skill set. At the end of the railroad bubble, companies started making a fortune using railroads in manufacturing. Auto repair places still continued after and because of the auto bubble because the number of cars sold didn't decrease when most of the companies making cars failed.

Again, I would caution you to think about how the government will react to a bubble bursting because if it chooses to prevent the use of the infrastructure to create businesses and improve the economy as it does all too often, then you won’t be able to take advantage of this infrastructure.

3) Sell to the bubble.
The people who grew wealthiest from the gold rush were not looking for gold. They were the people selling flour and shovels to the people who were. In order to go into business in bubble companies, and depending on the size of the bubble, it can be possible to earn a lot of money selling these things to them. After all, a bubble exists because people are investing more in an industry than that industry will return. So if your products or services are what they are investing in, you will earn much more than they do.

There are two things to realize when you’re doing this, however. First, there is a danger that those selling to the bubble will increase so much that this will become a bubble in and of itself, and second, there is a danger that when the bubble bursts, the market for your products will dry up. So you must prepare for this by using your money to take advantage of the aftermath of the bubble or to expand your business so that you are less dependent on it.

4) Prepare for the recession.
The end result of many bubbles is a recession or an industry slump, and it’s during a recession that most firms pull inwards making them less able to develop their brand, innovate, build their customer base, or respond to changes in the market. Further, during a recession, many companies make serious mistakes which put them out of business, leaving an opening for someone else to step in. This means that a company that is able to act quickly and nimbly in a recession and has a plan to build its market share and innovate new products can come out of the recession much larger than when it went into it. Bain states that it’s during such times that smaller companies are best able to pull ahead of their larger rivals. So by seeing a recession coming, you can begin to save money and plan a strategy to replace companies which can’t compete once the recession occurs.

Seattle's Buy Local Campaign

For those looking for a good example of a buy local campaign Seattle's Economic Development Office partnered with the cities Mayor (Mike McGinn) to launch the promotional campaign Only in Seattle Campaign "to encourage discovery and exploration of new neighborhoods and businesses in Seattle."  The campaign works by featuring neighborhoods and businesses which are unique to Seattle. By featuring specific businesses rather than creating a cluttered campaign the Only in Seattle Campaign is better able to control the brand for each neighborhood and the city. Further it makes its ads more attractive by speaking specifically to certain segments of people. 

For the past two years Only in Seattle has captured the essence of Seattle's neighborhoods and shared the unique stories behind each of the featured businesses. Only in Seattle is now launching another piece of the campaign which is Only in Seattle Sundays. With Only in Seattle Sundays the campaign's "buy local" mission is brought to life beyond the Only in Seattle website, www.onlyinseattle.org, by inspiring people to take one day a month to discover and explore a new neighborhood or businesses they otherwise might not experience.

Following Fremont, locals can look forward to Only in Seattle Sundays hosted in Belltown (August) and Wallingford (September), and other neighborhoods in the subsequent months.

Over the next three months, OnlyinSeattle.org will introduce each of this year's new neighborhoods and their businesses. Among the 12 new businesses highlighted are Fremont's Book Larder, a bookstore devoted to Seattle's literary foodies, Pioneer Square's Magic Mouse Toys, Seattle's oldest toy store, and Wallingford's eclectic and delicious Bizzarro Italian Cafe'. By September, the campaign will grow to spotlight 70 businesses in 16 different neighborhoods.

The City promotes a healthy business environment for neighborhood business districts and organizations. The Only in Seattle marketing campaign is only one of numerous City-funded projects and activities that improve and strengthen local business districts under the broader Only in Seattle Initiative.

Indonesia's Growing Economy

Indonesia's economic growth in the last quarter beat expectations and by early next year Indonesia will have one of the eleven largest economies in the world, such economic growth has become common place as Brazil’s economy recently passed that of Great Britain and recently its economic growth beat forecasts. So although Indonesia's economic growth has been slower than that of China’s much of it has been driven by internal demand, with Indonesia having a greater domestic consumption that most other Asian countries. This means; first Indonesia has been able to beat growth forecasts even as most countries around them (Including China) have had lower growth numbers, second Indonesia is less likely to experience a major crash in the immediate future than those whose growth has been primarily from external sources, and perhaps most important Indonesia’s lower classes are likely to see more long term benefit from the growing economy as retail and service businesses put pressure on each other and manufacturers to increase employee wages. This has helped to bring Indonesia’s unemployment down by 25% over the last eight years. Still with their large populations countries such as Indonesia still have a long ways to go towards seriously alleviating poverty.

Challenges Indonesia Faces

1-Economic Disparity. Concerns abound that Indonesia’s growing economy is creating greater inequality abound as the 80/20 rule applies there as it does everywhere. Part of the problem which Indonesia faces in this is that it’s bureaucracy is set up so that much of the government's welfare programs go to the wealthiest households rather than the poorest. The World Bank found for example that 40% of all oil subsidies go to the wealthiest 10% of households http://www.worldbank.org/en/news/2012/04/04/indonesia-economic-quarterly-redirecting-spending.

 2-Aging Infrastructure One of the biggest challenge Indonesia runs into is that it’s infrastructure is already overburdened and so can’t continue to support the nation's current growth rate for long. New bridges, telecommunications and roads are needed in order to expand the country's opportunity to pick up additional factory jobs and to expand its retail and services.

3-Dutch Disease Another major challenge facing Indonesia is that it’s great abundance of natural resources means that many of it’s best and brightest as well as a lot of foreign investment seek ways to earn money from these limited resources which means that Indonesia does suffer some from the so called ‘Dutch Disease.” This restricts much of Indonesia’s economic growth in part to the limited growth of it’s commodities industry.

4-Over burdensome Bureaucracy Indonesia is considered one of the worst countries in which to start a business because of the many hoops entrepreneurs must jump through and it’s sprawling, over burdensome bureaucracy which faces many corruption and efficiency problems.

What Indonesia needs to do to improve it’s economy.
When watching for positive signs of future growth in Indonesia one should look for the following things to be happening.

1-Position itself to take advantage of changing China China’s income is double that of Indonesia’s which means that over time it will be much better for businesses to manufacture their products in Indonesia. Because of this Indonesia must begin working to not only attract manufacturers but should prepare itself to better handle new manufacturing companies.

2-Reduce bureaucratic barriers Right now many entrepreneurs likely keep their businesses small in order to avoid notice so that they can bypass government barriers to doing business. Worse still many other people who would start businesses never do. Given the importance of retail to Indonesia’s economy reducing the barriers to these service and retail businesses, as well as to investment in larger manufacturers is perhaps the most important thing which Indonesia can do to improve its economy. To do this it must be willing to redo the way it’s government bureaucracies are structured in order to shrink them and streamline them.

 3-Stricter anti-corruption laws Indonesia needs stricter laws to find and punish corruption so that the government and the businesses get to keep the money which is due them, rather than corrupt bureaucrats taking bribes.

4-Encourage investment which is unrelated to the commodities industries. Indonesia needs to begin to begin to create a better system for investing in something other than it’s commodities industries which are by and large limited in their growth.

5-Build infrastructure in telecommunications and transportation. Indonesia needs to start choosing areas which are likely to expand in order to better focus its funds on improving infrastructure within them so that they are ready to support greater manufacturing capacity.

News Articles


Above Picture Courtesy of Wikipedia

Expanding Job Training in Hawaii's Culinary Arts Industry

http://en.wikipedia.org/wiki/File:Sasazushi.jpg

Food is one of the most important parts of both tourism and a communities ambiance giving both a glimps into the culture of a region and the opportunity to experience that culture while relaxing at the end of a long day of exploring. Travel and tourism are one of the United States largest exports earning roughly $144 billion dollars in 2011. This makes the culinary arts an important though less commonly discussed investment for business development. In order to help expand the culinary arts the Economic Development Administration is providing a 2.4 million dollar grant to the Culinary Institute of the Pacific of Honolulu, to help expand the institute's training facilities located on the Diamond Head campus of the Kapiolani Community College.

The goal of this investment is to train workers and entrepreneurs in the skills they need to attract more customers and to provide a better experience for tourists so that they continue to come to Hawaii. The hope is that the investment will create 500 new jobs and generate $7 million in private investment, according to grantee estimates. Culinary jobs are also of increasing importance as a driver of an improved quality of life for those working in this industry.

"The Culinary Institute of the Pacific will be a state-of-the-art facility that expands on the expertise of Hawaii's world class chefs, farmers and restaurateurs by advancing a curriculum that combines the culinary arts with restaurant management and entrepreneurship," said Senator Daniel K. Inouye. "Students will work with locally grown produce and be able to fully explore and innovate the cross cultural cooking style of our islands."

Hawaii is one of the best places to develop fusion restaurants thanks to a unique history of diversity with everything from Spanish cowboys and Portuguese farmers to Japanese and Filipino immigrants as well as the local populations Hawaii already has an eclectic mix of culinary traditions. This diversity will not only benefit Hawaii but the United States as a whole as more and more culinary artists gain the knowledge of many unique culinary experiences.

"This added investment in Hawaii's visitor industry comes at an excellent time," said Congresswoman Mazie K. Hirono, a member of the House Education and the Workforce Committee. "The state's most recent tourism numbers are strong. A number of airlines including United and our own Hawaiian Airlines have just launched non-stop service from the East Coast. And soon, Kapiolani Community College's world class Culinary Institute of the Pacific will be able to expand its job training facilities and programs. Earlier this year, I visited with the talented students of the Culinary Institute, who had their skills on full display. Their delicious and diverse dishes foreshadow successful food industry careers like those of graduates Alan Wong and Sam Choy, two of Hawaii's finest ambassador chefs."

Arts and Culture generate $122 million in San Jose

The newly released Arts and Economic Prosperity IV study shows that the nonprofit arts and culture industry generated a total of $122,627,881 in annual economic activity in the City of San Jose - supporting 2,809 full-time equivalent jobs and generating $8,782,000 in local and state government revenues. As those who have read my blog and articles before know I believe that when the demand problems can be overcome the Arts are one of the best ways to grow an economy. Further “This study highlights that the Arts are an important sector in our strong economy,” said Kim Walesh, Director of Economic Development. “San Jose residents, visitors and workers are actively engaging in the arts, which will continue to play a pivotal role in being a driving force in our economy’s resurgence.” Despite the significant impacts of the recession, the San Jose nonprofit arts sector has demonstrated growth in economic impact, attendance, audience spending, and its support of jobs. The economic impact of San Jose’s nonprofit arts organizations and their audiences is up by 19% since the last study five years ago; growing from $103,241,195 to $122,627,887. Attendance is up 5%, from 1,887,002 to 1,990,641. The average event participant is spending $24.09, up from $21.03. And, the number of full time jobs supported by the nonprofit arts sector is up from 2,348 to 2,809. “Even in this recession, the arts industry has demonstrated how it can be a significant player in San Jose’s robust economy,” said Kerry Adams Hapner, Director of Cultural Affairs. “Our cultural scene creates a visible and tangible sense of place for San Jose, a global epicenter, where people connect through the arts.” The nonprofit arts and culture industry in San Jose leverages $49,348,167 in event-related spending by its audiences. As a result of attending a cultural event, attendees often eat dinner in local restaurants, pay for parking, buy gifts and souvenirs, and pay a babysitter. What’s more, attendees from out of town often stay overnight in a local hotel. Nationally, the Arts & Economic Prosperity IV study reveals that the nonprofit arts industry produced $135.2 billion in economic activity during 2010. This spending—$61.1 billion by nonprofit arts and culture organizations plus an additional $74.1 billion by their audiences— supported 4.1 million full-time equivalent jobs and generated $22.3 billion in federal, state and local tax revenues.

Above image from http://en.wikipedia.org/wiki/File:Dolce_Hayes_Mansion_at_dusk.jpg

Biases and Economic Development

Perhaps the largest single factor impacting any economy in the United States are emotions. This is because while infrastructure, education, etc all have an impact most U.S. economies have the opportunity to attract educated people and have fairly good infrastructure in place already. Further in a democracy the type and amount of infrastructure created and educational opportunities available come from the decisions which people make.


It's often times people's biases that get in the way of good economic growth, biases which are difficult to overcome and so need to be mitigated by those trying to improve the economy. Even for those doing careful analysis biases can present a serious problem. McKinsey points out that “good analysis and good judgment don’t naturally lead to good decisions as the process is also crucial.” In other words, no matter how smart and capable you are, you don’t necessarily make good strategic choices. So you must “Never trust your gut. You need to take your gut feeling as an important data point, but then you have to consciously and deliberately evaluate it.”


You can see my list of biases for businesses 

List of Biases

Bias Blind Spot
Everyone sees themselves as less biased than they actually are, as less biased than other people. People will often think of those who disagree with them as stupid or worse, evil and uncaring. This seems to especially hold true for economic matters. So people continue to make the same mistakes over and over again because their brains tend to be structured the same way as those of other humans. 

Anchoring
This bias could also be called the bubble making bias, it's the tenancy for people to obsess over a single piece information. It's the reason so much of economic development became focused on increasing property prices, the reason so many bad businesses receive government loans in industries that should otherwise be growing. 

Confirmation Bias
There is a tendency to see anything which occurs as confirming existing beliefs. In other words people's world view determines their beliefs, and reality has little to do with it. This is a problem because many of the generally held economic assumptions are wrong but no matter how often they fail to work, fail to prove fruitful people will continue to believe that they are effective. We see this in Argentina where no matter how often the economic system crashes the people still support those who back the failed system.
This is why diversity can be an important part of a strong economy, because new ideas can help prevent the reuse of failed ideas over and over again. The danger when planning for diversity is to presume that alternative ideas come from demographic diversity. However, demographics are not an indicator of diversity in thinking; thus, it’s important then to think about psychographic rather than demographic diversity within a community.

Irrational Escalation
People grow obsessed with recovering the investments they make from their project and so the more time and money people put into a project the more likely they'll be to continue to invest in it even if its clear the project is failing. This results in more wasted money and more wasted effort that could have been better applied to something else.


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Negativity Bias 
When people have a negative experience with something, they will tend to give more weight to that experience than they will to positive experiences or statistics. So if a tactic is normally sound, but you’ve had a bad experience with it, you are less likely to try it again regardless of the likelihood of statistical success or changes in the environment. This bias can be especially useful in predicting what your competitors will likely do or how they’ll react as it may be possible to see which of their tactics have failed and so predict that they’ll be slower to respond to similar tactics. 

Normalcy Bias 
People tend to focus only on what their experience has shown them is likely to happen and so won’t plan for disasters which haven’t happened. This, for example, is one reason why people have tended to underestimate the impact of some of the major disasters we’ve had recently. It’s also why many businesses underestimated the impact which the recession, changes in technology, gas prices, and globalization would have on their business. 

Status Quo Bias 
Many people don’t like change. Once they’ve established a rhythm, they want it to continue on forever. This is why so many strategies remain rigid even as the world changes around them depleting their resources. 


Ambiguity Effect
When people avoid doing something new or something because they feel they don’t have all the information for it, they have fallen victim to this bias. It’s important to remember that there is no such thing as perfect information, and you have to do something different from what’s being done in order to pull ahead of your competitors. 

An example of this is the reason companies were slow to begin running Internet marketing campaigns. Indeed, most companies have only recently jumped in even though the cost of search ads, for example, has more than tripled. Any business which had tried this method of marketing sooner was more successful. 


Ostrich Effect 
I have noticed that almost all the businesses which started to slide into the red would tend to ignore what was happening and continue to pretend that they didn’t need to immediately implement some form of emergency strategy to deal with the problem until it was too late. This is why so many music retailers and book retailers seemed to ignore the impact that the Internet would have on their strategies until it was too late. It is also why so many businesses ignored the impact the recession was having on their strategy until it was too late. You cannot hide from a negative situation, nor can you assume that a negative situation will simply turn itself around. You need to be adaptable, to be able to change your structure in order to remain in business.


Disregard of Regression Toward the Mean
We tend to believe that whatever situation is occurring is likely to continue to occur no matter what is statistically likely. This is why we presume that we should continue to gamble during a winning streak, for example, even though we eventually have to lose and our chances of winning are the same regardless. This is also why people continued to think that the housing market would continue to increase in value forever even though most industries will eventually have to level off or decrease in value. Never assume that growth or other impressive events will simply continue on. You must plan to find ways to replace existing growth or deal with problems that arise because they will eventually happen.

Robotics, 3d Printing and Productivity

Every decade the world seems to change faster then it had the previous decade, and every year people worry about the impact of the next round of technological innovations on the work force. They worry that manufacturing jobs will vanish with robotics, that the internet will destroy service jobs.

The only limit to the amount of money which exists is a lack of human productivity and innovation.

It would be wrong to say that such changes do not bring challenges, problems and even pain to some. It's important to realize, however, that such changes decrease the cost of products, lower cost products means that people are better able to afford more things. Worstall in an article in "Forbes" points out that

 "there is no shortage of human wants and desires. If we’re getting as many physical goods from our 3-D printers as we desire then there’s no shortage of non-physical goods, services if you like, that that same displaced labour can now go and provide. This is also known as us all getting richer as we get those new services plus the manufactured things to enjoy. But the second, and clinching, argument is about cost. We will obviously only use our 3-D printers to create everything if they are cheaper than the more traditional manufacturing methods....  Yup, a fall in the costs of things is equal to, is by definition the equivalent of, a rise in real wages. So if 3-D printers do take off it can only be because, by definition, they make us all richer. And worrying about low wages when we are, again by definition, raising them really does seem most odd indeed."

As people are able to afford more things more easily many new jobs become feasible. Social Media employees which help to build a customers brand and improve relationships with employees while currently a job which is limited to a few experts has the potential to grow to a basic sales position which can be filled by more employees. The customization of cars, hand made furniture, etc all become more feasible as career choices as wealth increases and the cost of living decreases by comparison.

There are many service, handcraft, specialty manufacturing and farming jobs which can grow as wealth increases. 

China's Landing Part 1

China's Cabinet has promised to work harder to insure stability in the worlds second largest economy but its hard to imagine what they could do in the short term.

China's economic problems are growing and are likely worse then they are letting anyone realize, their electrical consumption is decreasing so slowly that one could presume that their economy isn't growing any longer despite what they are claiming. There are many countries which have lied about their economy in the past so theirs no reason to presume that China isn't lying as well.

Those attempting to improve China's economy are faced with a series of conundrums;

1-Real Estate
Real Estate Prices are dropping in China, and while some of these drops are happening because the government is trying to keep the prices of housing affordable China wouldn't be trying to increase lending in real estate if this industries decline didn't concern them. Even more than the United States Real Estate is important to much of what has fueled the Chinese economy as local governments have used the sale of Real Estate to fund Trillions of dollars of infrastructure projects, so as the real estate industry dries up Chinese companies and local governments could risk bankruptcy.
The central government would run into problems if it had to bail out too many businesses and local governments as the bonds and dollars they hold help to keep the Chinese currency from rising and help to stabilize the United States, thus too many bailouts could hurt their exports

2-Exports
As Chinese wages and energy costs rise the cost of manufacturing decreases in other countries due to the increased unemployment, productivity and new technologies such as robotics and 3D Printing. Further many of China's export markets are loosing buying power which in turns means that China will be able to export less goods. Finally there has long been mistrust issues associated with Chinese goods; toys with lead, tooth paste with anti-freeze, drywall that releases toxic gasses. China has overcome mistrust through growth and low prices which spurned euphoria and allowed many to overlook these concerns but if the Euphoria cracks it may cause a rush to the exits.
China could try to deal with this by increasing local consumption, but to do this its own people must come to trust Chinese goods this in turn requires a certain amount of Government regulation which could make manufacturing too expensive more quickly then trust could be established.

3-False Lure of Infrastructure
China is attempting to fix many of its economic problems through infrastructure spending. Such spending, however, is a rarely a good strategy as it simply shifts money from one place to another and because of a lack of long term planning only occasionally creates any real value. Further once infrastructure spending ceases as it eventually must the economy is still left with the short fall the spending was meant to plug and the government has less options to change things as it has run out of money to do so.

Types of Innovation for Economic Development

Innovation is anything which you develop which better helps you to achieve your goals which means that there are many types of innovation. The Monitor Group has categorized Innovation into ten types which can be seen here. I would highly recommend reviewing these categories of innovation to help refine your organizational innovation efforts as understanding them can greatly enhance your innovation efforts by focusing your efforts.

However when reviewing these types of innovations you should remember that there are two entities which you are trying to develop - the economy and your economic development organization. Thus you are looking to come up with both economic and organizational innovations. Because the Monitor Group has done such a good job developing organization innovations I'll only discuss the Economic Innovations in this article.

Economic Model 

The structure and mix of the industries in an economy. An economies Economic Model is very heavily based on Comparative Advantages. It's important to keep in mind that a successful community needs to bring money into it and so it  not only has successful retail, office, and or manufacturing businesses it has successful people Therefor your economic model can be based not only on developing businesses but on developing a workforce which can get jobs, even outside the community so that they can bring money back into the community.

Networks and Alliances

An economies relationship with other economies, NGO's, Governments, etc. This innovation category is complex because it involves both your organization building relationships and the communities themselves interacting with each other. A community near a residential area with a lot of families for example might develop a series of family events with their excess space. 

Community Network 

The way the members of a community communicate with each other and get involved in the community. 

Enabling Process

The services and infrastructure which support the people and businesses who are vital to the economy. This category can include schools for children, workshops for businesses, Micro-Equity Networks, etc.  

Company Integration

How you link the many diverse aspects of an economy together. Communities with theaters, zoos, or other major institutions could try to get these to cross promote with restaurants in the area. A community could also have a number of interior decoration businesses and custom furniture makers. Further events could be held in which people who buy from one store get discounts from another.

Goals

The goals for the economy help to determine what programs are important and how success is measured. Gauges of happiness, satisfaction and more can be used in addition to incomes of individuals within the community and success of the businesses within the community.

Brand

The way people perceive a community, how those in charge of promoting a community communicate the benefits of living, shopping and starting a businesses in it.

Economic Skunk Works and Beta Programs

There is a lot of risk inherent in Economic Development, both for the region being developed and for the people trying to improve the economy. When jobs are at stake and bureaucracy weighs down an idea it can be very difficult to try something new, to test the untested. This however is exactly what needs to be done in order to make economic development efforts successful. The world is changing too quickly for all the same techniques to work as well, and they or may not work at all. Further with unemployment as high as it is there is clearly room for improvement in economic development efforts, room to find better programs for improving the economy.

In order to find new effective ways to develop the economy those organizations involved in economic development should when possible create "Skunk Works" like teams and Beta Programs.

Skunk Works is the research and innovative branch of Lockheed Martin which is tasked with developing innovations. It is a group of highly knowledgeable, creative and skilled people who are free to develop new ideas and test new concepts. Similar to this concept is the idea of Intrapreneurship - a person or team who develops start up programs within a larger structure. Google has one of these programs in which it allows employees to spend a certain portion of their time working on unique and new ideas of their own. Those programs that get developed often enter a Beta phase in which they receive a limited public release in order to further test them.

In economic development multiple ideas could be tested in small ways in order to gauge the impact a larger more expensive program would have. This way an economic development organization could experiment with many projects to see which ones are the most effective for their needs.

Over Regulated

It has been estimated that all the regulations on businesses cost 1.75 trillion per year or nearly $6000 per person. This is enough money that if it was freed up companies could hire every unemployeed person in America at a wage of over $60,000 each. This amount could also be used to buy health insurance for everyone who didn't have it. Of course given the way money flows it's likely that they would only hire a small portion of the unemployed but the point still stands that regulation costs are incredibly high.


This is not to say that some regulations aren't important because while the free market will regulate on its own to an extent cooperation's will try to get away with as much as they can. However, many regulations do little to protect consumers and others are arbitrary.
Further even some seemingly good regulations could be considered bad when weighed against their negative outcome. A regulation which protects a few people from getting salmonella but causes many more to be without a job and medical insurance can't be said to have a positive outcome. Because of this regulations need to be reexamined and weighed against the problems they cause or at times groups of regulations should all be scrapped and new regulations determined.


Regulations Need Innovations
Regulations have a goal, to insure that products are healthy for example, and anything with a goal can benefit from innovation. New regulations need to be developed which meet the need to insure healthy products without increasing costs.


For example recent regulations require toy companies to get their products tested to insure they are lead free are good in that they provide children with lead free toys but instead of expensive tests for every small toy company a toy company could opt to purchase their materials only from suppliers that are known be be lead free. After all it's not hard to find lead free plastic, paint, and wood in this country so local U.S. manufacturers. could easily provide receipts that they were purchasing from those who had already been lead free in order to prove that they were. 


In restaurants Bacteria is the concern; not sink size, equipment, etc. So innovations could be developed to audit restaurants kitchens and foods to insure that they don't have too much bad bacteria. Such testing could allow audits of food production facilities to occur more quickly, would allow businesses to open an run with less cost while meeting the actual goal of the regulations.


There are of course many possible innovations to reduce the cost of regulations while maintaining the safety of the public, so methods need to be set up to discover these methods through suggestion wiki's, rewards for programs that succeed in saving money, and when possible innovation teams.

Cost of Infrastructure

A new sidewalk in Philadelphia which is intended to beautify a commercial corridor and thus help the businesses within it attract more customers can cost over a million dollars or about $15,000 per business the sidewalk is intended to help. Pedestrian Street Lights also cost about $15,000 per business. Meanwhile these same businesses are struggling to get loans in order to expand, their facades are a wreck, and many of the buildings along the street remain empty.

The amount spent on these beautification projects would have been enough to send the business owners to a community college, to help small manufacturing plants secure equipment so the community could start exporting again, to fix the facades of every business on the corridor, or to do any number of other things.

This is not to say that infrastructure projects aren't ever cost effective, sometimes they are worth a lot. In the same place as the sidewalks were beautified internet was unreliable and slow, underground fires stopped traffic and bursting water pipes flooded the streets and businesses above. A little ways away holes were appearing in sidewalks which weren't repaired, holes which dropped ten or more feet down into the drainage system. Fixing the IT infrastructure, the failing water pipes, and the holes in the sidewalk may also have been very helpful. None of these were done however.

My points are these;

1-Greater care needs to be taken when selecting projects.
2-Not all governmental projects need to be infrastructure projects which a few create temporary jobs with some of the money and use the rest to import materials manufactured in outside economies.

When planning infrastructure things need to be put into perspective. For example the cost of a light rail project might be enough to build apartments for every person who would have taken the rail so that they would be closer to work for example. While there are many reasons not to do this such a perspective allows us to way not only the benefits and costs but to try to think of other ways to approach a problem.

A New Structure for Business Assocations

A standard tactic for helping to develop community economies is to build a business association which is structured almost exactly like every other business association. At first this new business association creates excitement as entrepreneurs hope that the association will help them get new projects done. In the first few meetings the business owners try to figure out what they should do, and a few of them dominate the discussion and work on the projects. Soon most of the businesses stop attending all together. Eventually the business association is a meeting between one or two officers (The VP and Treasurer often stop attending the meetings) and one or two other businesses, while the association itself does very little. This is a huge problem for economic development organizations which rely on the associations to assist them in their efforts and provide them with the opinions of the businesses in an area.

A New Structure is Needed
Nearly all business associations are structured the same way high school governments are with a President, a VP, a Secretary and a Treasurer (a job which in many associations does nothing but sign checks and say how much is in a bank account). This isn't how a government or business is structured, indeed very few effective organizations are structured in this manner.

Structure like a business
Corporations are structured with specific departments which have specific tasks, a.k.a. a Chief Financial Officer who finds new sources of revenue for the organization, develops budgets, and allocates money. A Chief Marketing Officer who comes up with and executes promotional strategies to increase profits.
Similarly a Business Association could have a Financial Officer which searches for grants and sources of revenue, a Marketing Officer who comes up with plans to promote a region and which helps build a relationships with the members of the community, a Government Relations Officer which makes certain businesses know about new laws impacting them and which voices concerns to the government officials.
Each of these leaders could have their own set of volunteer business owners which makes and executes plans and reports to the other businesses which can choose to overrule a plan or who can elect new officers to head each of these department but which will likely allow each entity within the association do its job.

Wiki Structure
With modern technology a structure could be set up in which there was no actual leadership, rather any business with an idea could post it to the Associations Forum, Wiki, etc, and email the others. The businesses could than all vote on it. Such a system would of course be much looser but in some cases more ideas would be generated when every member can post them and when no one person controls the structure.

The Economic Development Organization
The development organization in an area should help to found a business association with a list of recommended projects already ready for the business association to take on. The businesses can of course come up with their own plans and projects but typically they will want to have projects to work on from the time they start.