Resources to Leverage

You may recall that Hidalgo, as part of his country analysis, profiled various countries as to their GDP and economic complexity, and predicted which had immediate upside potential.  Based on historical analysis, China, Korea, and Singapore started with fairly high complexity and low GDP, and these countries were expected to grow in GDP and indeed they did.  In fact, they were part of the “Asian Tigers” growth phase, both before and after Hidalgo’s first study.  Interestingly, though, several other countries – Brazil, Indonesia, and Turkey – also grew, despite starting from a much lower complexity and GDP point. 

Interestingly, China only started growing after it’s reforms began, illustrating the importance of “good enough” government structures.  Turkey enjoys a strong relationship with the EU, and Brazil and Indonesia have energy resources, but all did a good job of leveraging their opportunities.

The original study also points out some novel relationships between products, including some clustering of related products.  In the early years, 50 years ago, electronics was a niche cluster of products, somewhat isolated from the rest; today, electronics is a large cluster intertwined with many other products.  This of course makes sense,  as electronics was a technology that started on the fringe but was one of those high-order innovation remixes across other areas. 

On the flip side, oil started as a local cluster, even though 50 years ago oil was already a mature industry; today, it’s still a separate cluster.  Oil does not seem to be the sort of technology that readily mixes into other product sectors.  Combining this with the historical “curse of oil” perspectives, I think this provides a cautionary note for Oklahoma and Tulsa, in that we would do well to look at oil as a fortunate windfall but also a one-trick pony, and perhaps we should strive to diversify our technology base.  I’d assumed that Texas had already done that, but their top-5 isn’t much more impressive than Oklahoma’s, though banking is a notable asset.  Again, we’d need to dig much deeper to get a full picture of their economy, though.

Anyway, let’s get back to Tulsa.  We already have some pretty good resources that could be readily aligned to push in worthwhile directions; in fact, probably a decent pitch would probably be enough to tilt their support significantly, we’d just need to be convincing.  Such resources include:

-          36 Degrees North – a cool co-working and start-up support space downtown, 36 Degrees is mostly a software-centric organization supported by a range of philanthropists.  It’s perhaps the best techie space in Tulsa.

-          FabLab – a tech shop just east of downtown, FabLab provides members with access to a number of high-tech tools for creative use, like 3D printers, wood mills, vinyl cutters, and basic electronics equipment.  Today it mostly support youth outreach and teaching, but that’s got to be part of a long-term vision for anything STEM related.

-          I2E – A state supported group, I2E provides space and funding for startups with a pretty solid business pitch.  They work with local investors, but last I worked with them they had yet to find their perfect niche.

-          OCAST – the state group that funds I2E, they also provide funding for interns and other science ventures across the state. 

I’m sure there are others I don’t know about, and still more that sound promising but have yet to get off the ground (like Scott Phillip’s Rawspace). 

So, what’s the point, you might ask?  To have success we’re going to need to turn up the annealing temperature, and get people jumping a little further in their thinking than has been the historical norm.  We need to get a lot of ideas funded, and then let the market weed them out.  We can’t be paranoid about wasting money, as it’s going to be a statistical thing, and just like VCs in Silicon Valley we need to trust that the few big wins will more than cover the many little losses.  In short, I believe we should combine four key ideas:

-          Increase the annealing temperature of our innovation, pushing entrepreneurs to take a bit more risk than they normally would, and making more technology and market ideas available through networks between our local institutions and neighboring high-value cities.

-          Leverage the Lean Startup ideals of small bets, with intentional market experiments and value accounting that emphasizes customer value growth rates and other second-order metrics more than income.

-          Bias for success by seeking adjacencies to high-value products that Tulsa already produces, including both physical products and virtual products like software and algorithms in the mix.  Detailing these will be a good bit of work.

-          Specifically seek success for several distinct areas of the economy:

o   The hands-on build/craft/trade side that includes traditional blue-collar attributes and middle-class hobby-craft as a base (bespoke one-offs, custom items, Maker sorts of creations, etc.)

o   High-value professional jobs making high-tech products, artificial intelligence, Watson analytics, cloud data hosting, Internet of Things widgets, and so forth.

o   Bulk mid-level techie jobs centered on software, user interface/web development, and basic networking and troubleshooting skills.

In the next day or two I’ll finish up with a few thoughts on how we might go about the detailing and planning process, some areas I think we need to work on to make turning the crank of innovation easier for entrepreneurs and existing companies, and a few other loosely related notions that I believe in but for which I have yet to rigorously develop support.