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Institutions are not Designed for Revolutions: On Economic Development and Coworking

5 minute read
by Alex Hillman

Among the interesting growth patterns I’ve seen as coworking has begun to make the transition from nascent “nerd clubs” to mainstream is varying instances of support from Economic Development Centers/Councils/Committees/Corporations .

In the best of cases, an EDC or other similar local government institution has partnered with a coworking catalyst and they’ve found ways to work together.

But, at least from a the vantage point of the landscape I have, that seems to be the rarity. The unfortunately common mistake is that the #1 failing design pattern in coworking – “build it and they will come”, is the first approach that an EDC or other government entity takes. They don’t have humanity to throw at a problem, but they sure know how to occupy real estate. I think that this is a fundamental business mistake, but that’s for another day.

I’ve had lots of one-on-one conversations about why I think that is problematic, but today’s post on TechnicallyPhilly interviewing author Margaret Pugh about why Philly missed the boat to “become the silicon valley” did a good job of capturing these mistakes.

The quotes below are from her answers in the interview conducted by Brian James Kirk, which I’ve followed with some of my own thoughts:

Places that have really been successful have tapped into a core competency, not just said, “let’s build a research park and they will come.” Sound familiar? We screwed this up over 2 of my lifetimes ago (and more times since), why do we think a new version of the same old model is going to work this time?

The strategy of high-tech development was a means to an end of fixing larger economic problems. That’s how Philadelphia went about it; ‘we’re going to build this not just as a economic development strategy, but as a strategy to somehow stop the racial and economic change in West Philadelphia.’ But around the world, when high-tech is used as a tool to solve other urban problems, it generally doesn’t work. This one is huge. When you view coworking as a tool, or a utility, to solve the problem, it’s like buying a hammer and expecting it to build the house all on its own. Coworking CAN be a means to an end, but the difference is – the EDC’s don’t get to decide what the end is.

Coworking provides a number of things, and interestingly, the most visible elements aren’t the most valuable.

Look at a space, you see desks, chairs, power, internet. If you’re lucky, you see smart, interesting, creative, motivated people. What you don’t see are things like: context – permission – serendipity.

Desks, chairs, power, and internet are commodities. There is always a cheaper version of whatever you have. Derek Neighbors from Gangplank has an awesome post on coworking’s “race to the bottom”. The core elements of WHY we do what we do, I think we agree on. I think our disagreements are superficial and not fundamental, which is why I continue to enjoy watching Derek’s hard work unfold and evolve. It’s also worth noting that Derek has, at least from what I can see, successfully forged a relationship between Gangplank and the local government. If I had to wager a bet, Derek fought for his vision of Gangplank to be maintained, regardless of what resources they provided.

Whether you charge money for it or not, if you’re renting desks because people need a place to work, you’re opportunities are soon going to be fleeting.

Instead, we work on building places (not just spaces) that provide context for people to learn and collaborate.

Instead, we work on building places (not just spaces) that grant permission to execute with the goal of transforming peoples’ expectations from needing to ask for permission at all to simply expecting that the permission has already been granted.

Instead, we work on building places (not just spaces) that allow for serendipity to take hold. You cannot create if you are fearful of possibilities.

Leaders in Philadelphia have been talking about it for 15 years: how you capture the brain drain. […]  get smart people the room to do cool stuff, throw money at the problem and then get out of the way. The Cold War defense economy channeled tons of government money into scientific R&D and didn’t micromanage what happened. Scientists got grants, universities got money, and that creates a foundation for the American tech economy. Emphasis mine.

“Instituions are not designed for revolutions.” A quote paraphrased from Geoff, my illustrious co-conspirator, business partner, mentor, and friend.

To the EDC’s, government leaders, etc:

Please take a good, hard look at yourself.  If you are in an institution, you’re not leading the revolution. I promise.

In fact, you’re probably what the revolution is working to change. Look outside of your institutions for leaders on the fringe, and support them the best way you can: stay out of their way.

In the best cases, look to the trenches for collaborators. Let them know they’re doing a good job, and see if they need help. Give them an opportunity to ask for what they need. Help them understand what it is that you can provide. But don’t build it for them.

You have to pure about it. Let’s get smart people together and give them tools to do really cool stuff, make it easy for them to innovate. I’d change one thing about this statement, and it’s that instead of giving them tools, you should ask them what tools they want or need instead of assuming you know. You might be surprised what they ask for, and how much easier it is to give them than “space”.

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Hey, thanks for reading!

Alex Hillman I am always thinking about the intersection of people, relationships, trust and business. I founded Indy Hall in 2006, making us one of oldest fully independent coworking communities in the world. This site is packed with the lessons and examples I’ve learned along the way. You can find me on Twitter, too! 🐦 Say hi.