Economic Development for the Emerging Economy

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Local Living Economies?

“ With less than a dozen micro-adjustments, any city, town, or village can create a more equitable and exciting economic future, while leading a domino effect, resulting in an increase in global well being and new wealth.” - Elkins?

Note: This leadership challenge and hypothesis is designed to be criticized, challenged, collaborative, and debated. It is incomplete by design allowing for you to inject at any point your own mind.?

Our original inquiry, pre-pandemic, was scalable place-based investing, through the potential creation of two repeatable community-centric enterprises; a Search Fund and a Mortgage Investment Corporation.?

Search Funds first appeared at Stanford University in 1984, in thanks to Irving Grousbeck as a way to rapidly place the right graduate students in enterprise leadership roles, thus leading our inquiry; if by modernizing the search fund thesis could we convert en masse greenhouse gas (GHG) emitting businesses, using next generation leadership to rapidly innovate within these companies (including mergers and acquisitions) towards becoming climate positive, while improving on the five times return (Stanford research 2020) on capital.?

The second enterprise is a Mortgage Investment Corporation (MIC), based on the Canadian 1974 rule allowing special entities under Section 130.1 of the Income Tax Act, thus leading to our inquiry; could a MIC be offered as a place-based impact investment platform to address retaining essential workers in our communities?

On the heels of our original two inquiries, and after becoming profoundly aware of our public service reliance on natural resource extraction royalty revenue during my tenure on an government sponsored emerging economy task force, and our post-pandemic observations of public governance regarding GHG emissions and path dependence (For example; the United Nations rule for reporting GHG emissions in the jurisdiction in which they occur, not where they are exported from) leads us to our main inquiry; what conditions can we create for rapid replacement of natural resource royalties to fund our public service, while honoring sovereign rights of indigenous people while reducing global GHG emissions with an leadership style that build enthusiastic trust daily while expanding under pressure, and a collective sense of urgency throughout??

To date, using unconventional wisdom, these are our best entrepreneurial recommendations towards reducing our “extinction debt” and creating social and environmental equality in the shortest amount of time. Note: even if done ad hoc, these suggestions would have profound institutional and community-wide effects:

“We cannot solve our problems with the same thinking we used when we created them.” - Einstein.

Applied Research

What if tertiary education communities supported public funders, governors, and institutional leaders to update college and university commercialisation playbooks with how to accelerate innovation “only” through directed applied research partnerships??

For example, at the University of Victoria, serial entrepreneur Peter Berrang is creating a sense of urgency towards commercialization by accelerating materials innovation through a “directed” applied research partnership with academic researchers including Wulff. Such “directed” applied research relationships result in best-in-class competitive and collaborative commercialization, presenting an agile roadmap and case study opportunities for senior academic leaders to duplicate and proliferate at will when ready.??

Venture Builders?

Let's start with agreeing, not all applied research innovators are entrepreneurs, and to date we have been leaving too much applied research behind, that obviously no amount of tertiary entrepreneurial or business education or micro credentialing will unlock “en masse” as we need it to in the time we have if one believes the climate scientists calls to action.??

Knowing most founders are actually creative ideators, and very few are entrepreneurial and or business leaders presents a challenge when trying to “proliferate” sustainable local living economies using venture capital, incubators, and education as seen to date globally. Note: all three have a place supporting self-identified entrepreneurs and private investors.??

Knowing this, we suggest Venture Builders are the strongest of economic development tools to consider when attracting and retaining innovators using public investments. Venture Builders are well suited to applied researchers, first time founders, creative ideators, and international newcomers. With this in mind, leapfrogging right to a Venture Builder makes the most sense knowing where innovation begins if we want to address wicked problems, for example; path dependence.

Venture Builders are funded, and led by seasoned entrepreneurs who understand all the competencies that a start-up needs in order to quickly reach sustainable revenue. Using the funds, these entrepreneurial servant leaders bring in the best business experts for product, sales, marketing, finance, and operational excellence to accelerate commercializing innovation using a portfolio approach.? These same business experts are paid for their work, while the venture builder acquires equity in the innovation as the company evolves, resulting in a portfolio of businesses within one holding company, resulting in zero need for venture capital and the negative effects publicly funded venture capital potential brings such as head office relocation for example.???

Venture Builders like https://theprojectxway.com open up new possibilities as the single most effective way to create or accelerate a prolific emerging economy ecosystem, as Venture Builders do not require or wait for first time entrepreneurs to lead and or downstream venture capital to follow.?

Newcomers?

Attracting International innovators to our communities. In regards to international innovators, and leveraging programs like our startup visa for example, it is now overdue for cities, towns, and villages to implement or upgrade best-in-class concierge services focused on international attraction of “individuals” to our communities starting with updating our economic development playbooks to accommodate both individual scale up entrepreneurs and startup innovators. With exceptional access to the right locals (not shy of a boutique five-star hotel or private club ethos) these individuals over time will build sustainable head offices in our community, because of three initial indicators based on my observations; universal healthcare, current founders, and our ability to accelerate introductions (especially customers) by leveraging established networks throughout North America. Such individuals as seen historically with zero initial support, can change the economics of a community single handedly, and for us to remain globally competitive as we enter the emerging economy we have to consider the negative effects when only focusing our efforts attracting corporations to our communities as seen to date, especially when considering intellectual property ownership as one example. This can start simply with designing founder personas when considering who one wants to attract and retain in our communities. For example, to draw innovators they will want to connect with inspired entrepreneurial co-founders and highly competent community leaders willing to accelerate innovation while remaining dedicated long-term to scaling best in class companies. Note: entrepreneurial founders want to be part of ecosystems they can grow into serial entrepreneurs within, that would require early access to other founders as a lead driver. This idea can also simply start with how we attract international students to our tertiary institutions, and how we support these students after the degree granting process, and how we leverage alumni beyond the needs of the institution to fill seats. Adding these roadmaps and others, to our agile economic development playbook is an important next step to growing our economy sustainably.

Mortgage Investment Corporations

What if your community's playbook had access to a mortgage investment corporation that offered extended amortization periods and higher loan to value ratios measured against historic rental payments? What if public pensions, citizens, and parents started to leverage federal mortgage investment corporation tax laws that legally allow for EAPs and LVRs today to help families, community members, and especially “essential workers” that don’t meet the mortgage stress test acquire their “original mortgage”, passing the loans to local banks as soon as legally possible, and then recycling the investment to the next essential worker, founder or new comer all well creating a return on investment and keeping parents and pension wealth intact???

Imagine your community offering home purchase financing as a competitive advantage to retain families, and then ask yourselves, would housing even be an issue politically if all Canadians had original mortgage access?

Listed Holding Companies

What if a portion of our personal investment dollars went directly to making our own community better without compromising financial returns? This can be accomplished through a “listed” investment vehicle, attached to a diversified holding company, that holds a portfolio made up of private companies? Think of this as a modernized version of Berkshire Hathaway, one that cares about local sovereignty in tandem with investment returns. What if philanthropists, investors, wealth and fund managers collaborated regionally on a meaningful investment thesis. Especially knowing this comes with a first-mover advantage. Modeling such an investment fund to all the pieces mentioned within this article, with the addition of “Search Funds”, you will quickly start seeing the value of a listed diversified holding company being added to your region to direct endowment, institutional and consumer investment en masse towards place-based business acquisition and sustainable growth while exceeding community expectations, investment returns, and well-being. What makes a listed diversified holding company even more valuable to your community, is it can deploy capital upstream directing desired social and environmental results as desired. A listed diversified holding company will also provide liquidity on day one for shareholders, which is especially useful when attached to a Venture Builder. Whereas venture capital in its current state, can neither invest upstream or provide early liquidity. Private venture capital will always have a use, but will not be the only option as we see today in most ecosystems. A listed diversified holding company also prevents ownership losses of community and public investments as no acquisition, domestic or foreign is required to return investment at any time. This is a viable “seventh generation” strategy for sustainability and community economic development.?

Community Foundations and Endowments

What if community foundations and endowments captured future generations through modernization? For example, what if new endowments were invested only in regions they are based. Moreover, what if grant funds these new endowments produced only go out as trust based “unrestricted” grants? Note: Taking this one step further, what if we can leverage this example to encourage elected officials to provide “unrestricted” funding to economic NGOs, moving us beyond the current political rhetoric of vote buying.?

Wealth and Fund Managers?

What if we could leverage in consultation with private wealth managers, the collective wisdom and network of public fund managers in our regions to design an investment thesis to help further draw out what problems are being solved, and what investors would be investing in, while championing place-based investing? What if we could leverage those same public fund managers to provide a back and middle office investment fund service? For example, where I live, our public InBC Investment Corporation could evolve as a central front office in partnership with the British Columbia Investment Management Corporation providing middle and back office both providing services to communities throughout our eight distinct regions as we further leverage two existing public assets as one example worth consideration.

Chief Entrepreneur Officers

I also want to bring attention to the concept originated by Osterwalder, of Business Model Generation fame, of the position of Chief Entrepreneur Officer in the context of public service and academia. Not to be confused with an innovation commissioner which is a much different role. A Chief Entrepreneur Officer in the context of public good would be someone positioned at the highest administrative level to coach, mentor, and design for a future economic state. What if elected representatives, academic governors, and community leaders started with a simple gap analysis and pilot project to see how fast the role of Chief Entrepreneur Officer can improve community wellbeing and increase sustainable revenues for its citizens? An example would be to add a Chief Entrepreneur out of the highest level of office at any government level, better yet a collective working together at all levels. The first task could simply focus on an economic development gap analysis. Or in academia add a Chief Entrepreneur to the president’s office to oversee a gap analysis on commercialisation and revenue. These can both be ad hoc to start, but I guarantee these roles will become permanent once witnessed in action. Note, this is also a first mover advantage opportunity.?

Physician Assistants & Nurse Practitioners

“New York governor Kathy Hochul signed a new budget this month that contains a welcome provision: granting “full practice authority” to licensed nurse practitioners (NPs). Going forward, the Empire State’s 14,300 NPs will have authority to diagnose patients, order tests, and prescribe medications without physician supervision.” I am very aware, like all of you, how limiting access to medical care can detract families from establishing roots in one's community, hence making primary health care suddenly about economic development, in spite of political ideology seemingly adding fuel to the fire at a frustrating rate. I, like you, will continue to advocate for medical doctors and traditional practitioners, but in the meantime Physician Assistants (Potential Paramedic advancement), as well as Nurse Practitioners could be considered to fill part of the family practice shortfalls as seen in New York State in other jurisdictions like ours. From an economic standpoint as one example, a well-known Polish Artificial Intelligence Entrepreneur has expressed they are not immigrating to the USA due to healthcare costs, therefore opening up a competitive opportunity to attract newcomers when considering “individuals” like this as they consider relocating countries where healthcare is available to them universally as seen in Canada.?

Next: Other concepts worth exploring or debate in time to improve economic resilience and public governance;?

1. Drawing from the Advanced Leadership Initiative (Harvard) - to create versions in other countries.?
2. Using Executive Flipped Negative Income Tax - used to make room for leadership and governance model resets.?
3. Getting serious about Public Governance Reform (Constitutional Monarchy in the case of Canada). It is becoming more obvious each day how our public governance model has run its natural course and therefore we need to be working up resets or updates with a sense of urgency.?
4. Studying the value of Mass Transit versus Electric Vehicles - now that we are transitioning en masse creating a once in a lifetime opportunity to move away from public funded roads and private vehicles.?

Lastly, included in the link https://tinyurl.com/nhcr4kkk is an evolved investment vehicle solution in support of these concepts.?

Again, being a hypothesis; comments, challenges, criticisms, and suggestions are encouraged at this time.?

Peter Elkins can be reached at either emails; [email protected] or [email protected] or text/phone at 017789661250

NOTE: I view community through an entrepreneurial lens, always in search of continuous improvement, and being naturally curious about eco-systems and platforms. Economic development caught my eye a few years ago, and since then, I have found myself in various volunteer leadership roles both domestic and international, that have allowed me such opportunities, as to audit the Simon Fraser University Community Economic Development program, a member of the British Columbia Emerging Economy Taskforce and the chairperson of the Capital Investment Network among others that have led me to this hypothesis worthy of national debate, and hopefully resulting in implementing and or piloting any or all of our ideas tomorrow.

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