Introduction to Key Terms: Local and Localization

As one might infer from the title of this blog site and the objectives of our grant proposals, the concept of “local” featured heavily in the design and development of our projects. Local is one of those terms that carries multiple meanings. In some respects, it waxes nostalgic, recalling seemingly slower-paced times when we were more available in the present to do things that mattered for ourselves and those we cared about. Ah, if only we could return to that era.

Well, maybe.

For others, though, local translates into dull and boring and may even haunt some with the spectre of unwanted meddling, close-mindedness, and meanness that severely limits possibilities. We should get away and stay away.

Yet, there are those for whom local carries a more expedient meaning about survival over the long run. We belong to a community in which all our members commit to establish a sustainable course for this and many generations to come.

Of course, the truth for each person is a unique blend of these three. Local becomes a personal sense of place. It has a familiarity that says whoever is here belongs here; this is where I can do my best; this is where we can make our stand. It provides a measure of safety and security whereby I, along with my fellow community members, have the means among us to meet our basic needs and more. It establishes a foundation of community-centeredness and fair-mindedness for all to draw upon, yet encourages each of us to exercise personal freedom to pursue our individual goals, live our lives fully, and make a positive difference for ourselves by whatever criteria.

In this context, localization is the process by which members make their community that place where they and their families want to stay because there is nowhere else they would rather be. Localization is a community’s drive toward self-sufficiency and commitment to sustainability. It is an act of collective responsibility.

With this sense of “local” and “localization” in mind, community members direct more of their focus toward achieving self-reliance. This prompts them to take greater responsibility to meet their basic needs through the use of their own resources rather than importing from others much further away. Using terms introduced in my previous posting, such a shift in responsibility redraws the boundaries of the business ecosystem within a radius much closer to home. This opens the door for the development and application of business models that support the successful start-up and expansion of small-scale enterprises throughout the community and region. The net result is that more transactions occur locally, which keeps the wealth of the community at work for the community and goes considerable distance toward making the community the place to be and stay.

As a community localizes its business ecosystem, it produces more of its basic needs in terms of gallons of water, calories of food, kilowatts of energy, units of housing, articles of clothing, quality of sanitation, etc. This, in turn, spurs numerous opportunities for entrepreneurial activity specifically in agriculture and bioscience. Given these were focus areas for our grants, we could tap into the energy generated by the push for localization and the use of agriculture, particularly in food systems, as the economic development engine to advance our projects. In fact, our experiences with those dynamics in the course of our projects became the subject of multiple postings such as Which Food System Do You Use to Get Your Calories? over the past four years. Look for several more along similar themes to be referenced here in future posts under the Sustainable Local Economic Development heading and tagged as “localization.”

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Tuesday, August 7, 2012

Introduction to Key Terms: Business Model, Business Ecosystem, and Transactions

During the course of the two grants mentioned in my introductory post, our project team convened numerous “stakeholder sessions” across Northeast Ohio in an effort to encourage participants to generate business ideas and use the tools we offered to build them into business cases. In a pattern that repeated itself several times, attendees would have exciting ideas for businesses that played into their skills and captivated their interest in the session, but died along with the conversations after the meetings were over.

A likely reason for the high drop-off is the result of having given thoughtful consideration to the question, “How can I make a profit with my idea?” Or another way to ask the question is “How can I sell the value I deliver for a price that covers the expense I incur for delivering that value and have extra left over as a reward for me taking the risk and succeeding? The answer to that question is a business model. And if I can’t come up with a business model that fits with my idea, then I can’t make a case for it. Simple.

How could so many innovative and compelling ideas raised during the stakeholder sessions not find compatible business models to see them through to start-up? No doubt, there are several contributing factors to this outcome, not the least, of which, is that many of the ideas, which sounded good when first given voice, just didn’t pass muster under closer scrutiny. But what we also found is that how wide the net a person casts to vet an idea with others defines in large degree whether the idea continues toward fruition or dies on the vine.

In effect, almost any idea has the potential to connect with a social network of the countless, nameless many who represent all walks of life and all manner of means, and garner sufficient support to forge the idea into a full-fledged business. It is an application of Barry Commoner’s First Law of Ecology— “Everything is connected to everything else”— to commerce. The result is a business ecosystem.

From this perspective, a business ecosystem encompasses and interconnects all resources and assets as well as all participants be they customers, owners, employees, investors, suppliers, advocates, etc. Given this, how one draws the boundaries for a business ecosystem, defines who participates, and then positions an idea into it, influences the development of viable business models. The more expansive and inclusive the business ecosystem, the more options there are for a serviceable business model to ensue.

This raises the question, “Why do the qualities of expansiveness and inclusiveness contribute to more clarity rather than more chaos?” We found that, as in a natural ecosystem, the business counterpart thrives on an abundance of flows. Only instead of water, air, nutrients, etc., the flows in commerce consist of inputs, outputs, information, and know-how. And when these flows converge at specific points in time and space, an exchange of value, or transaction, occurs using an agreed to medium of exchange.

A business model organizes transactions so that “I sell the value I deliver for a price that covers the expense I incur for delivering that value and have extra left over as a reward for me taking the risk and succeeding.” More participants, more flows, more mediums of exchange, more value generated in a business ecosystem drive more transactions and, with them, greater odds that a business model will surface that develops a worthy idea into a successful business.

With these three terms as tags, look for future postings related to them that appeal to our grant experiences…

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Monday, August 6, 2012

Introduction to Sustainable Local Economic Development

Since 2008, I have been actively involved as a Co-Principal Investigator on a 3-year USDA-Specialty Crop Research Initiative, Regional Partnerships for Innovation grant awarded in September 2008 and back-to-back 1-year grants from the Fund For Our Economic Future (FFEF) in 2009-2010 and 2010-2011. These grants complemented one another. The USDA grant sought, in part, to develop a social networking infrastructure —LocalFoodSystems.org — for connectivity and collaboration that would inspire participation in agriculture localization. The FFEF grants focused on providing social networking participants with templates, processes, and tools necessary to catalyze significant entrepreneurial activity through increased localization within a regional agriculture-bioscience industry cluster.

During this 4-year period, I posted to blogsites, created websites, tested platforms and applications, prepared presentations, provided coaching, and contributed to papers and proposals all related to the themes of these two grants. Most of the information generated unfolded chronologically and addressed particular topics of interest in the moment. Furthermore, it was made available through the media that best supported the message being delivered to specific audiences. This led to a general mishmash of material with wide variations in timing, theme, track, and target making it difficult for those who may have an interest to consider what I tried, why I did it the way I did, what happened as a result, and what I learned along the way.

To address this shortfall, put a final wrap on the grants, and move my thinking into new areas of interest, I will begin a series of postings under the heading of Sustainable Local Economic Development that recasts my work in a more searchable framework. As with this introduction, these postings will appear on Blogger with links to the Sustainable Local Economic Development group on LocalFoodSystems.org (LFS) — you may need to join LFS (free) in order to view posts linked to it — Tumblr, Slideshare, and Scoop.it and announcements to Steve Bosserman on Twitter.

To help organize the information in the postings and maintain consistency in the framework, I will apply one or more of the following tags to each entry:

  • organization dynamics
  • business ecosystems
  • food systems
  • localization
  • local economy
  • mapping
  • business case
  • work space
  • market network
  • business model
  • governance
  • self-reliance
  • transactions
  • community investment portfolio
  • project management

I welcome your feedback about any of the postings as well as input on the tagging convention. This is a complex, yet very important subject about which there are few absolutes and far more questions than answers. The more we can learn together from our different experiences with sustainable local economic development through these media, the more valuable the outcomes. Thanks in advance for your interest and consideration.

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Sunday, August 5, 2012