Economic Development Data & Resources

Understanding the Business Ecosystem

Harvesting more than Metaphors from the Business Ecosystem
There is recognition of an ecosystem as a metaphor for the economy and the interworking of entities in that economy. We use terms like grow and harvest to talk about profits, terms like fertile to talk about markets and even fairly recently we added the term Economic Gardening as an activity to be conducted by economic development agents. To be fair, economic gardening is more than a simple metaphor to describe an existing set of activities, it is an enlightened way to grow a local economy by helping local companies.

Hidden in plain sight behind the metaphors is the biomimic of reality of the business ecosystem. Considering the depth of the ecosystem metaphor can expose more rational ways to look at helping a local economy.

Old-Growth Business
For example, if one is to consider existing businesses as old growth trees, their value in the economy becomes a little clearer. Old-Growth businesses (stage 3 and 4 as well as some mature stage 2 in the terminology of the Lowe foundation) are the large businesses that succeed or fail independent of the local economy. What is less recognized is how they can provide the shade and the habitat that makes it possible for new businesses to succeed.

Sometimes new businesses grow like sprigs maintaining the genetic code of the senior business and often fighting for the same resources. Others still, grow in the shade of the old growth companies, using the microclimate created under the canopy, the trained workforce or the focused infrastructure. The examples where other smaller entities actually help the old-growth elements are more subtle and harder to identify like the pollination by insects or the way a sapsucker may help defend a tree from insect attack .

So what is the role for an economic development agent in a business ecosystem? It is suggested that the agent may act as a gardener, yet we do not want our local agents planting and weeding businesses by their own whim. Nor do we want the economic development agent to act as a tree surgeon, diagnosing and treating private companies. It would also be unfair to evaluate the agent on these expectations for in most cases the larger environment and the business’ internal factors will have more influence on the health of the old-growth companies than any single agent’s intervention.

What might be the most valuable position for the conscious actors in this ecosystem is as planner, landscape architect and horticulturalist (a planitectrculturalist?), helping identify the microclimates in around the old growth companies that will create synergistic opportunities and the cases where seedlings will grow.

What we are describing is a mode of operating somewhere between terraforming and gardening. This is the mode in which an economic development agent must work by understanding the specific environmental conditions and helping craft a landscape that fosters diversity and synergy while watching out for weak branches and keeping an eye out for chances to pollinate new ideas.


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