First Person: How to Identify and Build a Robust Community Ecosystem to Attract New Businesses
Creating an exceptional business environment to attract certain industries can be a daunting task for any community’s leaders. However, it can be done with focused introspection, research, and strong partnerships. Area Development’s staff editor Lisa Bastian asked Michael Flynn, senior director of Economic Development at Destination Medical Center (Rochester, MN), for his ideas on ecosystem formation.
Flynn: Throughout my career, almost universally, talent has been the number-one driver of decisions, so I would say any resources a community can bring to bear that support an employer’s ability to identify, recruit, train, and retain talent are foundational. After that, a thriving supply chain and service provider network in your target industry or industries are critical. For example, in Rochester, MN, where life science and biotech are our primary focus, we also spend a lot of time with our innovation partners at the Mayo Clinic doing what we can to ensure their technologies and opportunities for collaboration are effectively connected to industry.
AD: If a company isn’t selling or using much technology, does it matter if the new locale under review has an ecosystem focused on tech or innovation?
Flynn: I’m not sure what company or industry isn’t using much technology today, at least as it relates to corporate recruitment and investment attraction. Most everyone I’ve dealt with in my career fits the profile of “a technology company that also does XYZ,” where “XYZ” might relate to manufacturing, distribution, or operations.
Since every business is a tech business to some degree, it’s important for community economic developers to be able to answer a variety of innovation questions, including: Who are the drivers of innovation in your community? In what areas is innovation focused? How has innovation successfully connected to industry in the past? It’s vital that community economic developers understand where (and with whom) innovations are being made in their markets.
AD: Is the optimal ecosystem for companies focused on science and medical much different for companies not operating in those fields? In what ways?
Flynn: I think it is different. In my role at Destination Medical Center (DMC), I spend the bulk of my day working with life science companies needing access to very particular types of talent, highly specialized real estate, and access to clinical partners with unique capabilities. Additionally, these companies need access to a set of service providers and supply chain partners who can help them navigate regulatory requirements, reimbursement models, and a long list of other variables I’ve not necessarily seen in other places I’ve worked.
AD: How can an organization determine if a community’s ecosystem is healthy and/or a great fit? Any cautionary tales on the topic?
Flynn: When assessing an ecosystem, I’d ask two questions: Who else is here, and what are they doing? Gaining an understanding of the types of companies that are thriving (hiring, raising money, advancing products) will help determine if your business is a fit. Conversely, understanding who is not there — and why they don’t have a presence — also can be informative.
Measuring the health of an ecosystem is trickier. But in my experience, when it comes to a healthy and thriving ecosystem environment, you know it when you see it. My advice is to ask if competitors are present. Are there companies at varying stages of growth and development? Do people work together and know one another? Are supply chain answers easy? If you can easily tease out answers to these questions, you’re probably in a healthy ecosystem.
AD: How can community leaders facilitate — or even accelerate — the building up of a robust ecosystem? What are the best tools for that activity?
Flynn: You build an ecosystem by engaging an ecosystem; engagement through communication is a key tool. You’ve got to get people communicating with one another and with community leaders. You need to be able to easily identify challenges and develop solutions to issues rising to the surface. A very smart person once told me, “No ecosystem is perfect, and if you try to convince me yours is, I’ll know you’re lying. Figure out what isn’t working and tell me your solutions for fixing it.”
Community leadership must be okay with both asking hard questions and getting tough answers if they want to make improvements. Civic pride, or the belief that “everything is awesome,” can be a fatal flaw when it comes to building a robust ecosystem.
Communication is a two-way street, so community leaders should commit to routinely hearing from ecosystem members. They can do this by taking the lead in hosting conversations where information is exchanged, thoughts and ideas are expressed, solutions are advanced, and supportive relationships are fostered.
Since every business is a tech business to some degree, it’s important for community economic developers to be able to answer a variety of innovation questions. AD: What types of infrastructure are needed to build an ecosystem prepared to serve well the present and future needs of a community?
Flynn: What’s needed in building a successful ecosystem depends on the type of industry you’re chasing. For us in Rochester, our value proposition is directly tied to Mayo Clinic, and the life sciences and biotech industries.
The types of projects we can win will be closely tied to our ability to demonstrate an ecosystem with a vast pipeline of talent at both the entry level (technicians) and highly skilled level (MD/PhD). As such, any investments we make in workforce development will have value. We also need to demonstrate physical infrastructure that is world-class, and on par with competitive markets found on the East and West coasts.
At DMC we’ve spent the last decade building an innovation district called Discovery Square, which is home to various industry and higher-education tenants, and several Mayo Clinic departments. We’re now in the process of developing a shared lab concept that will provide another piece of Discovery Square infrastructure, and make private investment in Rochester easier, more cost-effective, and faster. In the future, we will continue to listen to our local ecosystem to determine what the next infrastructure project needs to be so we can continue improving our competitive position.
AD: Anything else you’d like to share with our readers?
Flynn: Don’t underestimate the power of data when thinking about your ecosystem plans. Start with good market intelligence to determine where the community has strengths. Avoid making decisions based on anecdotes or, worse yet, gut feelings. Figure out whom your key customers are based on that intelligence and talk to them early and often. Figure out what makes those customers tick, learn about how they make decisions, where they source information, where they congregate, what they read, etc. In sum, build your strategy based on good customer feedback, revisit it often, and be comfortable adjusting as the data changes.
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