NDN Blog

We know from polling and focus groups that the Administration’s basic message on the economy (where’s the love America, we got you out of the economic ditch with one hand while fighting with the Tea Party on the other) is not cutting it.   The current Obama call for more roads and bridges infrastructure and long-term R&D also leaves Americans flat.  I gather the President may get a taste for that on his bus tour this week.

So what to do with grumpy voters and a dysfunctional Congress?

The Administration said yesterday that it is looking for “new” ideas.  That’s a pretty high bar -- so let me instead offer a new lens given the on-the-ground realities we see out there as our Next Economy Partnership Project interviews entrepreneurs, voters and community leaders about what’s missing from the debate on Washington.  

The answer is simple: Go Local.   The solutions we need for job creation are bubbling up in communities and the public strongly supports a national job creation strategy, implemented locally and bottom up.

While voters are skeptical that government spending alone creates jobs, they know it plays a key role in attracting private capital to create new industries like the Internet and clean energy. 

Through this new lens, the welcome role of the federal government – and Presidential leadership -- is to help local communities build on their unique competitive strengths, and the current top-down nature of federal infrastructure, economic development, and workforce programs aren’t doing the trick. 

In essence, just as we need a smart macro strategy to accelerate private investment we need a new “micro strategy” to catalyze 21st century business growth. 

Here’s the funny part: the more we describe to voters what this will involve in nerdy detail – from investing in new “innovation infrastructure” to creating low-cost mechanisms like community job creation councils that give citizens a seat at the table -- the more excited they get that we are moving in the right direction.  

So how can we go local, do more for less and build the new partnerships and mechanisms we need to drive our economic recovery now, much like the WPAs, TVAs and so on did in the 1930s?

1-    Animating Idea: “Regions Rise Together” -- Not “Race to the Top”

By allowing local communities and states to best decide their needs, the federal government can focus on the overall results a program is supposed to deliver.

Nothing will pass in Congress now, but come 2013, it is clear that there will be a group of bi-partisan Governors and business leaders who will want to move towards new performance-based government and flexible block granting of their money.  Forget time-consuming grant competitions for small amounts of experimental funding programs designed by Washington bureaucrats.  What we need is a new Acceleration Agenda.

Picture this: a new generation of post-partisan leaders will want to bundle what few federal resources are left (for workforce training, infrastructure, economic development, energy investment etc) and create the outcomes they want to create jobs their way.   Interested regions will petition the federal government to get more flexible funding and fewer mandates, and the competitive value of the “race to the top” concept can be offered up as bonus funding for those that deliver on their promises – not a zero-sum competition pitting states and regions against each other.   

2- Federal Role In The New Framework: Catalyze and Certify What’s Smart

We can boost up bottom-up economic success by lifting up the small business owners, the Governors, the Mayors, the innovators and other community leaders who are busy pouring the wet cement on a new American foundation, beyond Pennsylvania Avenue.

How?   Encourage regional infrastructure planning, collaborative best practices and public-private partnerships designed to accelerate bottom up innovation and replicable local success stories.  Innovation zones could then get certified for special support or funding based on such factors as:

•    Completion of collaborative business plans with wide community involvement
•    Presence of public-private partnerships
•    Smart sustainability project investment criteria.
•    Locally-sourced manufacturing that focuses on local suppliers

There are a number of small programs already advancing aspects of this vision that the President can cite: such as Startup America and the Jobs and Innovation Acceleration initiative.

3- Redefine 21st Century Infrastructure: Not Just Roads and Bridges -- New Innovative Mechanisms

We currently spend over $140 billion on federal economic development programs that are very top-down, stove-piped and inflexible.  We could do more for less if we gave communities and regions more flexibility to invest in what they though they needed to spur local job creation -- and tied it to results.

Some ideas to reform economic development and empower local communities include:

•    Local job creation councils -- Groups of local business people and civic leaders come together to steer federal funding to local priorities in designated Growth Zones and self-identified clusters while meeting clear accountability and performance goals. Such local community councils are better able to deploy local assets and overcome partisan gridlock.  

•    Solution centers -- While web applications and open data are critical advances we are seeing emerge from the Obama administration, sometimes (like those Esurance ads) people need intermediaries (translation, a human). One stop centers for federal and state economic development would offer direct frontline connections and support ranging from rural and small community loans (USDA), to free entrepreneurship training, to new SBA programs targeting the equity needs of small businesses and startups that deliver two-thirds of net job creation.

•    Innovative finance and flexible federal funding -- By allowing local communities and states to best decide their needs, the federal government can focus on the overall results a program is supposed to deliver. The newly proposed BUILD Act, which is designed to leverage private capital to dramatically reduce the taxpayer costs of infrastructure projects and spur state infrastructure banks like California’s Infrastructure and Economic Development Bank, is a perfect example.  

Summing Up

No one has a magic bullet to turn around an economy with 14 million unemployed, 14 million homes underwater and 46 million American on food stamps.

But voters of all political stripes believe that a national effort to accelerate smart local job creation strategies and build out the missing bottom up implementation mechanisms we need to raise our economic game in the 21st century infrastructure is the right path.  Bi-partisan business leaders are on board, as are Governors and Mayors. 

Instead of talking about how the stimulus saved America and focusing on what he and Congress might do, President Obama could find a warmer welcome in local communities if he painted a new picture of how the federal government intends to be a smarter partner with local business and entrepreneurs who are already creating the seeds of Economy 2.0.   This bottom-up approach was the hallmark of his campaign.  Now it’s time for it to the hallmark of his Administration.

While prospects for passing comprehensive energy legislation in Congress seem dim at the moment, a new poll for our Next Economy Partnership Project finds that voters still strongly support new energy solutions -- which they see as key to creating jobs and restoring America’s economy.

The new Next Economy baseline poll released today looks at (1) how voters view America’s economic situation (decidedly not a normal recession) and (2) which policies and strategies they think can fix the economy.  The results were a bit surprising: energy-related policies emerged repeatedly at the core of what voters see as a new “bottom-up” paradigm for economic growth.

For example, over 3 in 4 voters agreed with this statement about fixing the economy:

“Top-down solutions and one-size-fits-all edicts from Washington DC won't fix our economy and create long-term growth. Jobs must be created by the private sector in a bottom-up approach through local public-private partnerships that allow small businesses and local leaders to harness the unique strengths of their communities.” 

In terms of energy messaging, pollsters Jim Gerstein and Karl Agne recommend in their new analysis that “clean energy advocates don’t need to focus on ‘green jobs,’ just ‘jobs’ – voters already see clean energy as central to future economic growth, and we see more interest in a focus on small businesses, local communities, and ‘made in America’ than ‘green energy.’

In terms of actual policies, a number of energy-related solutions attracted considerable support, particularly among self-identified Independents.   These included already proposed ideas (eg, a national renewable energy standard) and new ideas such as a ‘war on waste’ that offers consumers and businesses incentives to save money and be more energy efficient, an Energy Independence Fund to give citizens a chance to get a “piece of the action” in new energy development, and accelerating the deployment of a 21st century smart grid to more efficiently and effectively distribute renewable energy across the country.  .

Note: NDN & New Policy Institute’s new Energy Solutions Series launches today -- with our first event focusing on how wireless technology will be critical to the new networked grid and Electricity 2.0.   

My colleague Morley Winograd and I wrote a new piece up at Huffington Post today that weaves together some of the exciting, bottom up innovation success stories that are bubbling up across the country with some new public opinion research.  This piece is designed to preview some new ways to think about the coming discussions and debate on streamlining 21st century government.  

The approach we advocate is not about more government or less government -- it's about creating a federal government that sets a clear, national competitiveness strategy to meet our global economic challenges and then empowers local communities and businesses to deliver the desired outcomes. People at the local level best know the economic needs and assets of their communities, and federal resources and public-private partnerships can be of enormous help in enabling these communities to realize the opportunities they see and create a new model for "bottom-up" growth. These ideas are at the heart of the Obama administration's new Growth Zones, Jobs and Innovation Acceleration Competition and Startup America initiatives which are at varying stages of development and deployment.

Morley of course knows his stuff and it was great to partner on this piece: he earlier served as senior policy advisor to Vice President Al Gore and director of the National Partnership for Reinventing Government (NPR) from 1997-2001.

No, I am not talking about the title of that fantastic book by Dave Eggers on the Lost Boys of Sudan.    I am asking the question that plagues both parties as they try and figure out how to create jobs, deliver services, define some role for government and deliver more for less.  The lack of solutions, and even worse, the quality of the debate, is one big reason that Americans are so angry with both parties right now.

So what is the what?  The answer comes from Eric Liu and Eric Hanauer in their great article, The “More What, Less How” Government," published in the Winter 2011 issue of Democracy Journal.  It’s less what, and more HOW.

Liu and Hanauer propose a new vision in a time when we face enormous public problems and growing disconnection from government. They suggest that what we need is “more government when it comes to setting great goals and investing to achieve them; less government when it comes to how we collectively meet those goals.”

There are a lot of names for what Liu and Hanauer have framed out so clearly, from performance-based government to bottom-up innovation to uh, nation-building. 

In Afghanistan, for example, we’re spending serious money right now in order to stand up 100 “district councils” to get farmers, the friendlier Taliban and other community members to come together to decide WHAT they want – hopefully more pomegranate, less poppy, less killing.  In other developed countries, robust industrial policies are guiding massive public investment in the clean energy jobs of the future.

Here at home, we’re still fighting about if there should be a role for government rather than over what we want and how best we can get the job done.

So kudos to Liu and Hanauer for defining the mountain we need to climb – together. 

Not:e: Eric Liu and Nick Hanauer will be joined by Michael Lind of the New America Foundation, Megan McArdle of The Atlantic, and moderator EJ Dionne of The Washington Post at NDN today.  Don’t miss out.

We all know we need to create more jobs and do it in an era of severe budget austerity.  

The debate that launches today about how we do that – especially over what the federal government should do -- can be a great opportunity for Democrats and Republicans to get past their rather rigid 20th century ideologies and come together around a new 21st century paradigm of bottom-up growth.   

But it won’t happen if we focus the debate exclusively on what might pass muster in Washington DC.   We must focus instead on the last mile where people live, breath and want actual outcomes -- and don’t care about political parties as much as seeing projects and job creation happen in their backyards.   

Today’s new announcement from President Obama to create transformational Growth Zones and innovative public-private partnerships offers us all a second chance to do just that.

Across America, in the last mile, locally-driven, bi-partisan and business-led economic blueprints are identifying clean economy and new sustainable technologies (biomass, bio-plastics, energy-efficient manufacturing) as the biggest growth opportunities to make jobs and keep them here.  

So why are we so stuck?   And will the coming budget battles make it worse?

It doesn’t have to be that way – we can unleash America’s diverse and regional economic potential by speeding our transition to the new forms of economic collaboration and public-private partnerships identified in our action blueprint, The Acceleration Agenda.  The argument in brief: we can do more for less by rewiring our broken economic development system to better link entrepreneurs to financing and build nontraditional networks that connect innovators, suppliers, and customers across traditional geographies.

We are off to a decent start.  There are well-documented small business financing gaps that have made it hard for new companies to grow but these gaps are getting addressed and are inexpensive to fix.  Bi-partisan and influential groups like the Council on Competitiveness are busy making the case for funding a new generation of on-scene “barrier busters” and to move the locus of interagency work down to frontline communities, not in Washington, D.C.  This is all cheap to do, and we can measure the benefits in new jobs and new markets created. 

But the biggest problem beyond missing money and broken mechanics?  We are stuck in an ideological cold war – not just between Democrats and Republicans but between those who are still holding fast to 20th century command & control regulatory systems rather than unleashing the power of bottom-up innovation and public-private collaboration.  

We are seeing one version of this conflict play out in the current dogfight in Congress over EPA regulation of greenhouse gases, a debate which is derailing many productive discussions about how we actually can create clean energy jobs.  The Obama Administration remains stuck to a pre-Copenhagen strategy of waving around a regulatory stick to compel action on climate, rather than offering up creative carrots to drive low-carbon, new energy job creation.    

Within the Beltway, this is good theater, as everyone knows their parts.  Environmental groups are at their best when they can stop bad things from happening.  Conservatives can rail about Obama’s job-killing government policies and pump up their base.  Lobbyists can bank billable hours.  It feels like 1995 all over again.

The problem is that we can do better with a new 21st century script designed to produce economic progress, not political stalemate.  The fact is there is plenty of trans-partisanship outside of the Beltway where people are HURTING and are eager to work together to make jobs.  

What’s the new movie called?  It’s called Economy 2.0 where we let Governors, Mayors, and local business and community leaders determine their own fate, rather than be collateral damage in a nasty Washington war over regulation that drives too many business and GOP leaders away from the table.  This storyline won’t deliver the happy ending we want – clean energy megawatts installed.

We must write a new script and recent moves by the Administration in creating a new initiative on jobs and competitiveness chaired by GE’s Jeffrey Immelt are a source of hope.   But the federal role in this movie must keep shrinking from central actor to supporting cast.   

President Obama, for example, could go further in light of the deficit and urge DOE Secretary Stephen Chu to re-program more of his agency’s funding away from its 20th century Manhattan Project research mindset to instead support smart deployment schemes that fit the competitiveness realities of this century.   Innovation happens as much outside the labs as inside.  

In Congress, leaders on both sides of the aisle need to look at ways to end an era of complicated and constricting top-down federal mandates and encourage more flexible implementation mechanisms that reward actual outcomes and performance.  New governors on both sides of the aisle, such as Michigan’s Rick Snyder and Oregon’s John Kitzhaber, to name two, would likely jump at the change to pursue federal waiver strategies for economic development and infrastructure, similar to past efforts around health and welfare implementation.   

So if Democrats can accept local control and bottom up regulatory innovation, can the GOP embrace a role for the federal government in accelerating the creation of low-cost and high-impact public-private partnerships? Or will ideology and tired derisive debates over “industrial policy” get in the way of what Americans of all political trips want: more jobs.

Significantly, the President's budget released today embraces the need to build new, transformational "bottom up" strategies for job creation and sustained economic growth. A new Growth Zones initiative will invest $40 million to lever private/public partnerships that drive high-growth industries and markets.  Building on its innovative 2010 call for creative jobs and innovation partnerships, EDA will lead a collaborative initiative with HUD, USDA and Treasury to accelerate 20 pilot sites split between urban and rural America.  The Growth Zones will include $2 million per site, plus targeted tax incentives replacing the old enterprise zone program.    

So can Growth Zones and other forms of bottom up collaboration lead the way to a new economy and a new politics?   Or will these proposals be dismissed as just wasteful big government -- disguised as kumbaya?   Hopefully not, because the benefits are actually measurable.  The most recent analysis released by Grant Thornton and ASR Analytics in September 2008 found that EDA’s programs generate “between 2.2 and 5 jobs per $10,000 in incremental EDA funding, at a cost per job of between $2,001 and $4,611.”  These are highly impressive rates of return for any public economic development.   New regulatory innovations in collaborative permitting technology for bridge-building are also generating impressive returns: $3.19 for every dollar expended in the Northwest by cutting the cost of design and schedule delays; doing it the traditional way yielded only 75 cents per every $1 expended.  

So here’s one vote to end the era of command & control government and 1,500 page-long Congressional bills that fuel mainly conflict and confusion.  America can address the jobs crisis and unleash a 21st century economy.  Local flexibility, creativity and collaboration are the key to accelerating our transition to Economy 2.0.   That’s the bottom line on bottom up.

Michigan Governor Granholm is up with a great piece today at Huffington Post and Politico, calling for a regional race to the top rewarding the most effective public-private partnerships.

Given our push here at NDN for a new jobs Acceleration Agenda, based on bottom-up partnerships and innovation, this quote from Governor Granholm stands out:

"The New Deal was about employment by the federal government. But this new era demands a private sector-focused, bottom-up approach:  jobs created by businesses through local public-private partnerships in an economic sector important to our national strength and incentivized by the federal government."

Kudos to Govenor Granholm for stepping up to lead this charge and help define the new job creation paradigm we need.  She's seen these kinds of efforts bear serious fruit in creating a new auto battery industry in Michigan.  It's time to unleash this race across America.

I was invited by colleagues at the Center for American Progress to add ideas from my recent NPI working paper, The Acceleration Agenda, to their 10-day discussion on how to restore US competitiveness kicked off by Governor Ed Rendell last week.  

Accelerating Job Creation and Competitiveness from the Bottom Up

Many thanks to the team at CAP for kicking up this important conversation. In addition to the smart ideas already offered by Ed Rendell and Rob Atkinson to refocus federal priorities, here are a few more low-cost, high-impact, and very bipartisan steps we can take to accelerate growth and competitiveness, detailed in The Acceleration Agenda.

First of all, it's important to note that the news is not all bad. The Obama administration is leading a new robust set of long-term investments in education, broadband, and clean energy competitiveness through its unheralded "new foundation" program.

But we can go faster by rewiring our broken economic development system to better link entrepreneurs to financing and build nontraditional networks that connect innovators, suppliers, and customers across traditional geographies. At the core of this economic development strategy is a new emphasis on nurturing bottom-up economic growth rather than top-down government dictates. The reason: Different federal programs "siloed" at departments and agencies across Washington simply can't deliver results based on a one-size-fits-all strategy to meet the challenges of 21st century global economic integration.

There certainly is good reason to consider how to revamp federal programs so that they work more collaboratively and more efficiently, as the CAP report highlights, but even still policymakers need to consider a  bottom-up acceleration cookbook that features these ingredients:

Distributed federal engagement networks

An important finding in the Council on Competitiveness's Collaborate report makes clear how trusted, on-scene "barrier busters" in communities like Louisville and Denver have been critical to building working alliances between governments, the private sector, and community leaders. To be blunt: We need to make sure that more interagency meetings happen in frontline communities, not in Washington D.C. This is cheap to do and we can measure the benefits.  

Implementation partnerships with business

Bottom-up doesn't mean just states, cities, or universities get more money. We need locally-led, public-private partnerships to be the locus of competitive innovation, too. Here is where businesses and community foundations can step up. Government cannot build this last mile alone. Like the Welfare to Work Partnerships of the 1990s, this new generation of Jobs and Innovation Partnerships would engage businesses directly in problem-solving.

Flexible finance mechanisms

Public-private partnerships are critical to picking the right local projects, but then we need to fund them. The clear message emerging from bipartisan and business-friendly competitiveness consortia across the country is the dire shortfall of small amounts ($2 million to $10 million) of flexible seed and risk capital to kick-start the first wave of new entrepreneurialism. Filling this gap is critical. We just need to lock the smart people in a room for a few days.

Implementation waivers

New governors on both sides of the aisle are eager to pursue federal waiver strategies for economic development and infrastructure, similar to past efforts around health and welfare implementation. An executive order strategy, as recommended by CAP, can include this acceleration win-win.

Name the big idea

Separate economic sectors, such as small business, clean energy, infrastructure, exports, skills, and entrepreneurship, need to be better linked under one integrated framework.  The sooner we name it, the sooner we can get to work building it. We could call it U.S. Competitiveness Strategy, A Regional Race to the Top, 21st Century Infrastructure, or simply More Jobs Dammit. But we need to organize around a shared lexicon, both at the federal level as CAP has outlined, and at the local level as suggested here. Until we do, many promising initiatives from the White House and the different departments and agencies in the administration will move slowly in their own lanes, rather than speed along on a fast track we need to build together.

Cross posted on compete.americanprogress.org.

There has been a good deal of chatter and hand-wringing lately about the Ryan Lizza New Yorker piece which tries to tick-tock how cap and trade went off a cliff.  Yet for those of us who are biased towards what we can do outside the Beltway and from the bottom-up, it seems like a good time to review some of the strategic actions we can take that don't just depend on Congressional kumbaya alone.

Here is a short memo laying out 5 supplemental but decidedly big strategies -- all of which are compatible with continuing the fight for a comprehensive climate bill. 

Few of us are happy about the level of progress we have made in creating new jobs, new businesses and reaching the high road economic vision we all share – be it about manufacturing and job creation, small business entrepreneurship, clean energy market transformation, 21st century infrastructure, local economic development, or export expansion. 

In a new New Policy Institute paper being released today, The Acceleration Agenda, we describe a series of low-cost but high-impact steps we can take now to accelerate job creation, growth and American competitiveness. 

It’s important to note that the news is not all bad: a robust set of solutions and investments have already been deployed by the Obama Administration.  In the short-run, the Recovery Act has done its job to keep the economy from entering a free-fall and the Administration’s unheralded set of long-term “new foundation” investments in education and workforce, broadband, clean energy and so forth are seeding new ideas and industries. 

The next step is what this paper focuses on – creating the right “middleware” to better connect the dots -- linking short term and long term federal investment strategies, the public and private sectors, and innovative ideas from the top with the frontline realities of bottom-up and regional implementation. 

At the core of these ideas is a simple paradigm shift – an emphasis on nurturing bottom-up change rather than top-down dictates. The reason: federal silo'ed programs and one-size-fits-all solutions don't work as well anymore in meeting the complex challenges of the 21st century economic markets.  Growth, job creation and shared prosperity lies in creating opportunities for entrepreneurs and new businesses to find financing, lifting up new clean economy markets, and building new networks to connect innovators, suppliers and customers across traditional geographies.

To be clear: this paper does not simply call for more federal revenue-sharing with the states.  The changes we need to accelerate private-led innovation in regions and communities do not begin, or end, there.   We need new regional initiatives and distributed financing mechanisms to accelerate economic growth.  One such promising framework, the Jobs and Innovation Partnership, was recently outlined by US Assistant Secretary of Commerce John Fernandez here.

We are pleased to host Mr. Fernandez, and Entrepreneur, investor, and Ask Jeeves founder Garrett Gruener, to further discuss these issues at an event today and we invite both public and private partners to continue – and accelerate -- the conversation here.

Read the full working paper:

The Acceleration Agenda: Job Creation, Innovation and Economic Development in the 21st Century

Absolutely.  So I am honored to be speaking next week at the Global Innovation Forum at the fabled Xerox-PARC.  The NFTC has pulled together 150 business and innovation thought leaders, including more than 50 CEOs from innovative companies in clean tech, life sciences, information technology, Internet-related businesses and top innovation thinkers like Rob Atkinson to help facilitate a more robust dialogue between Silicon Valley and the Beltway. 

The timing couldn’t be better.  As Tom Friedman accurately framed it earlier in a column this week:

Although there are many “innovation” initiatives ongoing in this administration, they are not well coordinated or a top priority… (a)nd that partly explains why this administration has been mostly interested in pushing taxes, social spending and regulation — not pushing trade expansion, competitiveness and new company formation.

So what’s the solutions set?   

First let me plug a great NDN event next week in Washington DC on this very topic.   On Wednesday June 16, NDN will host a speech by Congressman Ron Kind (WI-3), Vice-Chair of the New Democrat Coalition and Co-Chair of the NDC Task Force on Innovation and Competitiveness,  Kind will speak about the value of innovation to the American economy and the recently released New Dem Agenda for Innovation and Entrepreneurship.

Meanwhile, on the left coast, here’s a preview of what I will be saying:

1-Yes, it’s President Obama’s job to re-do the federal economic development pipeline to water the right beanfields – and there are initiatives rolling and more ideas on the table to do that.  Frankly though, it may take years for federal agencies to deliver on the promise of good ideas like the HUD-DOT-EPA Sustainable Communities program or create a few regional innovation clusters as proposed by the DOE and federal partners like Commerce. 

But as that old SNL sketch used to say: we need more cowbell.  The Obama team especially needs to understand that more federal IT and transparency alone does not guarantee innovation – you need smart intermediaries and acceleration mechanisms deployed in the field to break down the silos slowing down the recovery.   Why not create public-private “jobs and innovation” one-stop centers?    

2-At the same time, the innovation and entrepreneurship community also needs to step up our game if we are to scale success.   Right now however, we are less than the sum of our parts, some of us pushing small business entrepreneurship, some touting infrastructure writ large, others energy R&D.  The secret sauce of course is integration -- anchored around regional and metropolitan market outcomes.  

Here’s an example: it’s great that top corporate leaders like Bill Gates and Jeff Immelt are calling this week for more energy innovation research but what does this do not just for Stanford Phds but for Joe Lunchbucket?    

We need to help the Obama Administration build an innovation narrative and policies that close these critical cultural divides -- so that our argument about America stepping up to innovate isn’t just about Stanford University Research-Starbucks and Harvard Square, but about Manufacturing-Walmart and Main Street.   (Plus 20 million freelancers and 20 million Millenials.)

3-Key to all of this is the development and deployment of distributed finance and implementation mechanisms that seed locally-led innovation.  For that, we are going to need a new generation of collaborative partnerships, policies and institutions to engage trillions in untapped community assets and union/public pension funds as the federal stimulus runs out.  

In the end, the federal role can only be catalytic.

So on innovation and jobs, let’s be the ones we have been waiting for.