Tag Archives: economics development

Building an Entrepreneurial Buffalo

16 Aug

innovation

“If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley.” – Paul Graham in his essay “How To Be Silicon Valley

In many ways, the notion of “imported innovation” is the core tenet of our local economic development strategy.  We strive to identify companies who will move here or we struggle to keep existing companies here, but we do little to help generate innovation and entrepreneurship.

This is odd as Buffalo has a rich history of innovative entrepreneurs who powered the growth of Buffalo and WNY at the turn of the last century.  At some point, we seem to have lost our way, we lost our network effect.

The reason Buffalo struggles to innovate is related to the lack of an innovation community, a self-perpetuating problem.  We lack a thriving community of innovative and energetic entrepreneurs who are willing to take risks.  Sure, there are some, but they are a disconnected group and access to capital to fund their ideas is limited, at best.

There is no center of the city which fosters shared ideas and creative entrepreneurial energy.  Sure, we have a couple of areas in the city chasing the Richard Florida model of huddling hipsters and creatives into small alcoves to create an economic impact, but there is no effort to create an Artspace-like environment for business.

In cities where innovation thrives, you’ll find strong academic universities surrounded by an urban area populated by entrepreneurs with access to investors who are willing to fund risky ideas. You need a confluence of wealth and energy to create a network effect.

Chairman Emeritus, IBM Academy of Technology, Irving Wladawsky-Berger had this to say about innovation and network effects:

Throughout history, certain cities and the regions around them have been the major centers of innovation in a variety of different fields as a result of their unique accumulation of talent and wealth. Innovation is very susceptible to network effects – that is, the more talented people you have in close proximity, the more their ideas and their work influence each other and stimulate them to innovate. While talent is necessary to becoming an innovation hub, it is not sufficient. You need wealth, in order to support the talented people and bring their work to market. You also need an open culture that values a diversity of ideas and experiences.

So, we lack a thriving urban area which creates shared energy.  We lack access to innovation capital as most of our local wealth is inherited and descended from the casino capitalism tree (those interested in collecting wealth for the sake of collecting it).  Our talent base is drained each year as they migrate to greener pastures.  Most importantly, we lack people willing to invest in what Keynes called the “real economy”, the economy of production capital, long-term investment and job creation.

So, how do we overcome all of these factors?  The answer from the likes of BNE/BNP and most IDA’s is to keep paying a vig to companies like Geico and Yahoo! to set up shop in our fair region and bless us with midlevel jobs.  Those jobs are designed to create wealth for plutocrats in other regions of the country.  While this strategy has merit as a force multiplier for the local economy, it’s shouldn’t be the primary driver of economic development, it should be a tactic in a wider strategy.

I’d posit that we need to build our own network effect.  No longer should we look to the local “business leaders” for handouts and capital.  We should rebuild our culture of innovation from the ashes of closed steel mills and shuttered auto factories.  Looking to ourselves to fund a new wave of innovation, a rising tide of locals who want to build a better future for themselves and their neighbors.  To give this city back the entrepreneurial roar that was heard around the world at the turn of the last century.

So, I’ll leave it to you to tell me what you think.  I have a skeleton of an idea that I’ll discuss tomorrow. But first, I’d like to hear what you think. How do we begin to create our own network effect? How do we begin to bring capital to bear for innovative ideas? How do we build a community of ideas?

It’s time we took control of our economic future, help make it happen.