In an article (paywall) in Crain’s Cleveland Business, Harry Moser from the Reshoring Initiative discusses what what one company’s surprising reshoring success experience indicates for others in the manufacturing industry. Rising labor costs in China and higher energy costs are causing many to reconsider their sourcing decisions. With the advantages of shorter supply chains, minimizing disruption, and the benefits design and engineering being proximate to the manufacturing process, many companies are choosing to manufacture their products in the U.S.
Moser states “There’s nothing much simpler to make than a Frisbee and there’s no place in the U.S. more expensive than California or Michigan, so if you can bring Frisbees back from China to California and Michigan, you can bring anything back to Kansas.”
Also, discussed in the article is the multiplier effect that reshored jobs can have. Because manufacturing firms are ubiquitous in the supply chain, a company that makes the decision to reshore can set off a chain reaction to add jobs at shops both up- and down-stream in the production process.
Here’s the question… Are the regional organizations, i.e. EDA regions, Tourism, EMS and the like, pulling our counties together into cohesive groups, weaving the counties into interrelated groups or pulling the local leaders apart as they respond to the needs of different regions with different characteristics?
Below is a graph of the counties and some of the different regional groups they are connected to. The visualization uses an experimental tool from Google called Fusion Tables (you may notice some strange actions).
The orange dots represent different regional organizations and the blue dots are the counties of Kansas. As you can see there are a few clusters of counties that have similar allegiances and they get pulled together into large masses in the view. Other counties, for instance Morris or Marion, are relatively isolated and pulled between many groups. You can use your mouse to hover over the county or group to highlight the direct connection. What might this mean to the local leaders in the region? How might this effect how services are provided?
There are potential advantages of either tightly clustered groups of counties that know how to work together or highly interwoven network that provide opportunities to share knowledge. We present the visualization to spur conversation about the composition of regional groups.
Social networks are recognized as one of the crucial factors contributing to success in careers and/or entrepreneurship. Globally competitive entrepreneurs rely on their social network of weak ties i.e. people they interact with rather infrequently, to access information and learn about new opportunities. Entrepreneurs with extensive weak ties in their network identify significantly more opportunities than an entrepreneur with a smaller network.
Unfortunately, many entrepreneurs have a limited number of weak ties and a large network of strong ties (strong ties refer to close friends and family). An individual with a few weak ties has limited access to information from distant parts of the social system and generally a myopic view of the world as seen via the strong ties. Also, entrepreneurs build relationships with organizations and individuals that are a part of their social network as they frequently interact with them and have developed a relationship of mutual trust, shared values and beliefs, self limiting the kind and number of opportunities they could access with a broader network.
Social Network Analysis (SNA) is the study of interaction among these social actors. Social actors can be human individuals, organizations, companies, and even animals like bees or ants! Actors can also be in some cases cities, states, nations or groups. SNA deals with understanding how social ties work and how they influence and affect the involved network participants. Examining social ties helps to understand the linkages that exist, reveal the gaps and also point to connectors in a given network.
Proactive network weaving, a deliberate process of bridging and connecting to extend one’s social network of weak ties, can close network holes by finding missed or overlooked opportunities and create new and richer connections between and among people, groups and entities in networks.
Network weaving is a term coined by June Holley to describe the act of deliberately connecting others in an effort to strengthen social ties. Network weaving is the process of building community and strengthening social capital in a community by bringing together and connecting better the actors in a social network. A Network weaver by definition refers to “a person who takes responsibility for making networks healthier; do so by connecting people, coordinating self-organized projects, facilitating networks, and being a network guardian”.
A successful network weaving approach uses social network maps to look at networks that exist, the ties they form, look for potential network weavers and engage local stakeholders by connecting previously disconnected actors, scouting for new opportunities and working together as a group for better outcomes and encourage new relationships and collaborations.
AMI’s work through the Kansas Opportunity Innovation Network (KOIN) aims to weave such networks that can fill the holes in the social structure for unconnected companies, communities and regions. Any individual or an organization serving as a network weaver or an intermediary can help entrepreneurs benefit in a number of ways.
A network weaver/intermediary can assist business development by connecting the unconnected to new markets and unexplored opportunities. Since network weavers/intermediaries can look at and into different groups at the same time, ideas, techniques, practices from one group can be applied to problems faced by another. Network weavers/intermediaries can also innovate by synthesizing and combining different ideas taken from more than one group. The primary job of a network weaver/intermediary in a fragmented network is to build capacity to more systematically scout for opportunities and link them to the right partners at the right time. Doing this will help entrepreneurs/businesses look beyond their immediate market or region, collaborate with partners in other markets, and promote unique boundary-spanning innovation opportunities.
We all connect to others every day in our businesses and organizations. Network weaving can help in building trust among the network participants involved. Increased trust among actors (businesses) facilitates greater collaboration resulting in increased exposure to new markets, business opportunities, contacts and product development for businesses. Business growth and development occur where great ideas intersect with opportunity. Why leave that process up to chance? Actively knit your next great business opportunity together, before someone else does!
The University of Maryland experts in planning and economic development got a $500,000 U.S. Department of Commerce grant to create a new, sophisticated, 3-D analytical tool that ‘maps’ innovation and entrepreneurial networks in the State, and helps spot opportunities for new business collaborations. Their model is very close to the KOIN model and the co-princiapl investigator is none other than the latest KOIN advisory board member, Scott Dempwolf!!
Congratulations to UMD for the grant.
To see the complete press release about the grant, click on the link below.
UMD To ‘Map’ Innovation Opportunities, Aid Baltimore Redevelopment :: University Communications Newsdesk, University of Maryland.
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As soon as the term social network is heard, Facebook is what most of us think of, but it’s much more than just Facebook. Although Facebook has now become synonymous with social networking, an individual’s social network is the sum total of friends and acquaintances, people that may be called upon for information and guidance. In social sciences, a social network is defined as, “Individuals or groups linked by some common bond, shared social status, similar or shared functions, or geographic or cultural connection. Social networks form and discontinue on an ad hoc basis depending on specific need and interest.” (Barker, 1999) The people in an individual’s closer circle, such as family and close friends, are referred to as strong ties. Contacts in the outer circle, or acquaintances that are not in touch regularly, are referred to as weak ties.
Social networks are beginning to be recognized as one of the crucial factors contributing to success in career or entrepreneurship (García-Cabrera & García-Soto, 2009) (Granovetter, The Strength of Weak Ties, 1973). Globally competitive entrepreneurs rely on their social network of weak ties to access information and learn about new opportunities (Granovetter, 1973). Entrepreneurs with extensive weak ties in their network identify significantly more opportunities than an entrepreneur with a smaller network (Chea, 2008).
Unfortunately, many entrepreneurs have a limited number of weak ties and a large network of strong ties. An individual with a few weak ties has limited access to information from distant parts of the social system and generally a myopic view of the world as seen via the strong ties(Granovetter, The strength of weak ties: A network theory revisited, 1983). Also, entrepreneurs build relationships with organizations and individuals that are a part of their social network as they frequently interact with them and have developed a relationship of mutual trust, shared values and beliefs, self limiting the kind and number of opportunities they could access with a broader network (Tracey & Clark, 2003) (García-Cabrera & García-Soto, 2009).
Since many small rural entrepreneurs have a limited number of weak ties, that leads to structural holes in their exposure to market needs and opportunities. To expose entrepreneurs to more opportunities, the unconnected need to be connected by filling in the structural holes (Burt, 1992). Proactive network weaving, a deliberate process of bridging and connecting to extend one’s social network of weak ties, can close these structural holes. Network weaving creates new and richer connections between and among people, groups and entities in networks and helps participants to constantly learn about the assets and opportunities in and outside the network (Ricchiuto, 2009).
AMI’s Kansas Opportunity Innovation Network aims to weave such a network that would fill the structural holes for unconnected companies, communities and regions. This will be done by building the capacity to more systematically scout for opportunities and link them to the right partners at the right time. Doing this will help our clients look beyond their immediate market or region and collaborate with partners in other markets and promote unique, boundary-spanning innovation opportunities.
KOIN is being set up to act as an opportunity catalyst, boundary spanner and connector for Kansas companies, communities and regions wishing to compete in regional, national and global markets with innovative technology-based goods and services. The network will specifically focus on:
1) Profiling the innovation competencies, assets, capabilities and needs of regions, communities and their local companies.
2) Developing the ability to scout new opportunities, especially global opportunities, outside existing markets where center clients may have little to no connection access.
3) Creating an actively woven network of resources (technology, expertise, capital, etc.) and potential business partners that possess complimentary competencies who can enable center clients to respond in a competitive manner.
4) Facilitating the ability to readily connect and combine opportunities and other companies, communities and regions in innovative ways so that the response is greater than the sum of its respective parts.
Stay tuned for more information as we continue our projects in economic development, launch new services and advance the KOIN network.
Bibliography:
Barker, R. L. (1999). The social work dictionary. Washington DC: NASW Press.
Bendis, R. A., Seline, R. S., & Byler, E. J. (2007). A new direction for technology-based economic development: The role of innovation intermediaries. Applied Research in Economic Development, 4(1), 22-36.
Burt, R. (1992). Structural holes: The social structure of competition (Vol. i). Cambridge MA: Harvard University Press.
Chea, A. C. (2008). Entrepreneurial Venture Creation: The Application of Pattern Identification Theory to the Entrepreneurial Opportunity-Identification Process.International Journal of Business Management, 3(2), 37-53.
Drabenstott, M. (2008). Universities, Innovation and Regional Development: A View from the United States. Higher Education Management and Policy, 20(2), 43-55.
García-Cabrera, A. M., & García-Soto, M. G. (2009). A Dynamic Model of Technology-based Opportunity Recognition. The Journal of Entrepreneurship, 18(2), 167-190.
Granovetter, M. S. (1973, May). The Strength of Weak Ties. American Journal of Sociology, 78(6), 1360-1380.
Granovetter, M. S. (1983). The strength of weak ties: A network theory revisited.Sociological Theory, 1, 201-233.
Ricchiuto, J. (2009). The power of network weaving. Retrieved fromhttp://networkweaver.blogspot.com/2009/08/power-of-network-weaving.html
Tracey, P., & Clark, G. L. (2003). Alliances, Networks and Competitive Strategy: Rethinking Clusters of Innovation. Growth and Change, 34(1), 1-16.
Visser, E.-J., & Atzema, O. (2008, October). With or without clusters: Facilitating innovation through a differentiated and combined network approach. European Planning Studies, 16(9), 1169-1188.
Yang, C.-H., Chen, C.-J., & Shyu, J. Z. (2008). Innovation Intermediary for Creating Regional Knowledge Capabilites in Knowledge Cluster. Proceedings of the IEEE IEEM.
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Businesses exist and survive by reducing transaction costs, don’t believe me check out Ronald Coase he got a Noble prize for saying it. Even if it is not the sole intent, it is reasonable to point out that successful businesses work to streamline transactions in terms of both speed and cost. It is not only massive value oriented brands like Wall-mart that benefit from improved logistic systems, information systems and communications, we all enjoy the lower costs and fast delivery time of modern logistics. We can track the progress of our new laptop from the production in Asia to your doorstep. Your local supermarket can place an order to restock a shelf in the time you’re walking from self checkout to the parking lot.
The drive for transactional efficiencies not only occurs at the retail level but also between businesses and within business supply chains. Recently, the streamlining of supply chains is being seen as a place where economic development agents at many levels can help struggling manufacturers and nacent startups.
These programs focus on supplier selection and verifying various compliance requirements. While this information is a useful where markets and requirements are easily predictable or change little over time, it is decidedly less useful for the dynamic and disruptive industries that lead to real economic growth.
You might point out that social media, rewards cards and credit card tracking have created volumes of customer data. The problem is that no amount of buying pattern data can alone lead to repeatable innovation. We have yet to develop an algorithm that can glean the next disruptive products from the records in a database.
So is there a down side to faster and smoother transactions or is it just nostalgic pangs for a simpler time? By using RFID, bar codes and containerized shipping do we lose some of the parts information required to innovate, and what can be done to replace it.
By systematically driving out the rich multi-variant and personal transactions that created tacit knowledge about what customers value we loose a major source for organic innovation. Tacit knowledge about markets and customers are the enabling factors that permit inventors and entrepreneurs to develop innovations. The Thomas Edison model of the inventor as rogue R&D explorer is rare compared scores of entrepreneurs that take a known technology and mix in a unique customer insight to create advantage in the market and a disruptive business.
The double bind of rapid but vapid communication.
When it comes to what people want, what does it mean when we know so much less about so much more.
 A fresh paper has been released by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) . The paper discusses a more personal version of social networks, referring to how individual citizens participate in community governance.
It is interesting to look at how another government is looking at connecting the unconnected and working to make community.
The Coalition government has declared that:
“We need to create communities with oomph — neighbourhoods who are in charge of their own destiny, who feel if they club together and get involved they can shape the world around them.”
With the publication of the Localism Bill we now have some idea of how they intend to go about creating these communities. Sadly, the vision of how to empower communities is far too focused on engaging members of the public in the delivery of public services.
RSA – Connected Communities.
It’s not very often I find myself disagreeing with Sir Dyson.. As an industrial designer he inspires and like many folks that speak about design and business, the market leadership story of the Dyson vac has filled more than few slides as I present on the value of prototyping and differentiation. But I have to question his thinking (reported in a recent interview the Mirror and Times) or at least the applicability to American universities.
Dyson claims foreign students, specifically from China, are stealing secrets and taking them with them when they return home, even leaving computer bugs to that might allow them to continue to spy at a later date. There is no particular reason to doubt the accounts in the story or the motivation of the students, but there is a reason to rethink the relationship our universities have with foreign students.
We also have to ask what are we doing to encourage these visiting students and graduates to identify with their American communities and contribute to our economy. Most of the foreign students I have known have been loyal to their homelands but also wisely opportunistic. The fact is now many of the opportunities are spread throughout the world.
One solution as Richard Florida and many others suggest is to effectively hand out an H1B visa with every advanced degree, thereby allowing the brightest students to stay and start new businesses.
Many clearly acknowledge the value of the smart student that stays, but what of the smart students that leave?
When students leave (whether local a student leaving to the city or a foreign student returning home) do they know what they are leaving? do they know how to find out what is available? When students return to their home countries they often take leadership roles. We should be equipping these students with a professional network of relevant people and businesses to make it easy to link back in.
Sir James Dyson says British inventions at risk from Chinese spies at some universities – mirror.co.uk.
To balance yesterday’s post about the personal safety net and creating an environment for start-up success, Today in the HBR Scott Anthony point’s out the need to make sure start ups-can fail. Beyond the typical good money after bad argument, Anthony encourages us to consider the additional opportunity costs incurred when a bright and motivated entrepreneur sinks even more time, energy and capital into a languishing effort.
HBR.org
via In Singapore, a Failure to Fail.
Andrei Hagiu in the HBR looks at how social networks may change product innovation at large and small companies. While it is good to see an article that includes the point of view of the little guy, it still perhaps messes the point of product innovation. Like most discussion of social network the author actually describes a combination ad-hoc broadcast network and a 24hr suggestion box. That model of social network may produce product ideas and user feedback but I question if it captures the true innovative potential in social networks.
For small companies and start-ups, the considerations are a bit different. On the positive side, new communication technologies and channels have made it easier to get on the map quickly and to create buzz and word-of-mouth. The problem is that start-ups are now subjected to new and not necessarily desirable pressures, which are exclusively related to communication channels. In short, it is the “fear of being left out” syndrome.HBR.org
via Social Networks Will Change Product Innovation.
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