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jerryking : network_density   6

How to funnel capital to the American heartland
April 15, 2019 | Financial Times | by Bruce Katz.
* The Innovation Blind Spot, by Ross Baird.
* Ways must be found to rewire money flows in order to reverse the export of wealth
* A federal tax incentive intended to entice coastal capital into the heartland may end up helping to keep local capital local.

Over the past year, economically distressed communities across the US have been engaged in an intense discussion about mobilising private capital. Why? As mayors, governors, real estate developers, entrepreneurs and investors have learnt, buried in the 2017 Tax Cuts and Jobs Act was a provision that created a significant tax incentive to invest in low-income “opportunity zones” across the country......the law’s greatest effect, ironically, has been to unveil a treasure trove of wealth in communities throughout the nation. Some of the country’s largest investors are high-net-worth families in Kansas City, Missouri, and Philadelphia; insurance companies in Erie, Pennsylvania, and Milwaukee; universities in Birmingham, Alabama, and South Bend, Indiana; philanthropists in Cleveland and Detroit; and community foundations and pension funds in every state.

These pillars of wealth mostly invest their market-oriented equity capital outside their own communities, even though their own locales often possess globally significant research institutions, advanced industry companies, grand historic city centres and distinctive ecosystems of entrepreneurs. The wealth-export industry is not a natural phenomenon; it has been led and facilitated by a sophisticated network of wealth management companies, private equity firms, family offices and financial institutions that have narrow definitions of where and in what to invest.

The US, in other words, doesn’t have a capital problem; it has an organisational problem. So how can capital flows be rewired to reverse the export of wealth?

Three things stand out:

(1) Information matters. The opportunity zones incentive has encouraged US cities to create investment prospectuses to promote the competitive assets of their low-income communities and highlight projects that are investor-ready and promise competitive returns.

(2) norms and networks matter. The opportunity zone market will be enhanced by the creation of “capital stacks” that enable the financing of community products such as workforce housing, commercial real estate, small businesses (and minority-owned businesses in particular) and clean energy, to name just a few. Initial opportunity zone projects are already showing creative blends of public, private and civic capital that mix debt, subsidy and equity.

(3) institutions matter. Opportunity zones require cities to create and capitalise new institutions that can deploy capital at scale in sustained ways. Some models already exist. The Cincinnati Center City Development Corporation, backed by patient capital from Procter & Gamble, has driven the regeneration of the Over-the-Rhine neighbourhood during the past 15 years.

More institutional innovation, however, is needed. As Ross Baird, author of The Innovation Blind Spot, has argued, the US must create a new generation of community quarterbacks to provide budding entrepreneurs with business planning and mentoring, matching them with risk-tolerant equity. These efforts will succeed if they unleash the synergies that flow naturally from urban density. New institutions will not have to work alone, but hand-in-glove with the trusted financial firms that manage this locally-generated wealth.
books  capital_flows  cities  coastal_elites  community  economic_development  economically_disadvantaged  economies_of_scale  high_net_worth  howto  industrial_policies  industrial_midwest  industrial_zones  institutions  investors  match-making  midwest  municipalities  networks  network_density  P&G  PPP  packaging  place-based  private_equity  property_development  prospectuses  Red_States  rescue_investing  rust_belt  tax_codes  venture_capital 
april 2019 by jerryking
As Silicon Valley Gets ‘Crazy,’ Midwest Beckons Tech Investors
NOV. 19, 2017 | The New York Times | By STEVE LOHR.

The rationale for investing in the Midwest combines cost and opportunity. A top-flight software engineer who is paid $100,000 a year in the Midwest might well command $200,000 or more in the Bay Area. The Midwest, the optimists say, also has ample tech talent, with excellent engineers coming out of major state and private universities in the region.

But they also point to technology shifts. As technology transforms nontech industries like health care, agriculture, transportation, finance and manufacturing, the Midwest investors argue that being close to customers will be more important than being close to the wellspring of technology.

“The value will come from marrying industry knowledge with technology,” said Mr. Olsen of Drive Capital. “There’s an arrogance in Silicon Valley that we don’t need industry expertise. That’s going to be less and less true in the future.”.....Referring to the troubles chronicled in his book, Mr. Vance said that “at least a partial solution is to get more investment capital into this part of the country.”....Mr. Case and Mr. Vance talk of the need to create “network density” by bringing together more entrepreneurs, customers, partners and investment capital. The trips can and do yield investment candidates for Revolution, but start-up evangelism is the main theme.
investors  Silicon_Valley  start_ups  Hillbilly_Elegy  venture_capital  vc  Midwest  Steve_Lohr  J.D._Vance  industrial_Midwest  rust_belt  Steve_Case  industry_expertise  network_density 
november 2017 by jerryking
The new game | The Economist
Oct 17th 2015 |

America still has resources other powers lack. Foremost is its web of alliances, including NATO. Whereas Mr Obama sometimes behaves as if alliances are transactional, they need solid foundations. America’s military power is unmatched, but it is hindered by pork-barrel politics and automatic cuts mandated by Congress. These spring from the biggest brake on American leadership: dysfunctional politics in Washington. That is not just a poor advertisement for democracy; it also stymies America’s interest. In the new game it is something that the United States—and the world—can ill afford.
Asia_Pacific  China  gridlocked_politics  indispensable  influence  international_system  NATO  networks  network_density  network_power  political_power  Obama  Russia  South_China_Sea  strategic_alliances  superpowers  Syria  transactional_relationships  U.S.foreign_policy  politics  Vladimir_Putin 
october 2015 by jerryking
It’s the P.Q. and C.Q. as Much as the I.Q. - NYTimes.com
By THOMAS L. FRIEDMAN
Published: January 29, 2013

If America is to sustain the kind of public institutions and safety nets that we’re used to, it will require a lot more growth by the private side (not just more taxes), a lot more entrepreneurship, a lot more start-ups and a lot more individual risk-taking — things the president rarely speaks about....Facebook, Twitter, cloud computing, LinkedIn, 4G wireless, ultra-high-speed bandwidth, big data, Skype, system-on-a-chip (SOC) circuits, iPhones, iPods, iPads and cellphone apps, in combination, have taken us from connected to hyperconnected.... the old average is over. Everyone who wants a job now must demonstrate how they can add value better than the new alternatives....Indeed, when the digital revolution gets so cheap, fast, connected and ubiquitous you see this in three ways, Brynjolfsson added: those with more education start to earn much more than those without it, those with the capital to buy and operate machines earn much more than those who can just offer their labor, and those with superstar skills, who can reach global markets, earn much more than those with just slightly less talent....How to adapt? It will require more individual initiative...more of the “right” education than less...develop skills that are complementary to technology rather than ones that can be easily replaced by it... everyone needs to be innovating new products and services to employ the people who are being liberated from routine work by automation and software. The winners won’t just be those with more I.Q. It will also be those with more P.Q. (passion quotient) and C.Q. (curiosity quotient) to leverage all the new digital tools to not just find a job, but to invent one or reinvent one, and to not just learn but to relearn for a lifetime.
career_paths  entrepreneurship  innovation  network_density  risk-taking  Tom_Friedman  Erik_Brynjolfsson  Andrew_McAfee  MIT  curiosity  passions  semiconductors  automation  software  new_products  life_long_learning  Pablo_Picasso  individual_initiative  safety_nets  intrinsically_motivated  winner-take-all  Cambrian_explosion  superstars  cheap  fast  ubiquity  digital_revolution 
january 2013 by jerryking
The Crossroads Nation - NYTimes.com
Nov. 8, 2010 By DAVID BROOKS. What sort of country will
America be in 2030 or 2050? Nobody has defined America’s coming
economic identity. ....We’re living in an information age. Innovation
and creativity are the engines of economic growth. ...Creativity is not a
solitary process. It happens within netwks. It happens when talented
people get together, when idea systems and mentalities merge....."In
2009, Anne-Marie Slaughter, Dir. policy planning at the State Dept.,
wrote an essay , “America’s Edge.”" for Foreign Affairs in which she
laid out the logic of this new situation: “In a networked world, the
issue is no longer relative power, but centrality in an increasingly
dense global web.” the U.S. is well situated to be the crossroads
nation. It is well situated to be the center of global ntwks and to
nurture the right kinds of ntwks Building that US means doing everything
possible to thicken connections: finance research; improve
infrastructure; fix immigration; reform taxes;
R&D  infrastructure  immigration  creativity  future  David_Brooks  networks  soft_power  U.S.foreign_policy  synchronization  orchestration  centralization  Anne-Marie_Slaughter  cross-disciplinary  cross-pollination  network_density  network_power  op_ed 
november 2010 by jerryking
FT.com / Life & Arts - Lightning in a bottle
October 30 2010 | Financial Times | By Steven Johnson. The
physical density of the city also encourages innovation. Many start-ups,
both now and during the first, late-1990s internet boom, share offices.
This creates informal networks of influence, where ideas can pass from
one company to the other over casual conversation at the espresso
machine or water cooler....By crowding together, we increase the
likelihood of interesting ideas or talents crossing the companies’
borders. The proximity also helps to counter the natural volatility of
start-ups...Economists have a telling phrase for the kind of sharing
that happens in these densely populated environments: “information
spillover.” When you share a civic culture with millions of people, good
ideas have a tendency to flow from mind to mind, even when their
creators try to keep them secret....The musician and artist Brian Eno coined the odd but apt word “scenius” to describe the unusual pockets of group creativity and invention that emerge in certain intellectual or artistic scenes: philosophers in 18th-century Scotland; Parisian artists and intellectuals in the 1920s. In Eno’s words, scenius is “the communal form of the concept of the genius.” New York hasn’t yet reached those heights in terms of internet innovation, but clearly something powerful has happened. There is genuine digital-age scenius on its streets. This is good news for my city, of course, but it’s also an important case study for any city that wishes to encourage innovative business. How did New York pull it off?
ideas  creativity  innovation  cities  cross-pollination  urban  idea_generation  scenius  Steven_Johnson  proximity  information_spillover  unpredictability  serendipity  collaboration  densification  ideaviruses  volatility  network_density  start_ups 
october 2010 by jerryking

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