Tracing The Influences of a Strategic Foresight

You wonder what was on the mind of North Carolina’s greatest entrepreneur in the last three decades of his life.

I suspect it was dirt.

By the 1930s, the Piedmont region of North Carolina had lost an average seven inches of soil to erosion, up to 18 inches in some places.

The reddish, sometimes yellowish, clay so prevalent now is actually a subsoil laid bare by this erosion according to historians such as Dr. Paul Sutter.

The effects of that erosion are clearly evident today.  It is why nearly all of our creeks, streams, rivers and lakes are muddy and will be, according to ecologists, for a thousand years.

A hundred years before we had “climate change deniers,” we had “erosion deniers.”  They, too, had policy makers who tried to outlaw science.

Deniers of both are still in office in some states today.

James Buchanan “Buck” Duke, who died in 1925 at age 69, would not have been among the latter nor were he alive today, the former I suspect.

Duke was eight and living with family in Greensboro during the chaotic end of the Civil War, as it was being negotiated near his home in Durham even as his recently released Confederate father, a Unionist, made his way back home.

He was 17 when his father moved their tobacco factory into town and just 21 when “Sons” was added to the name of the enterprise.  His father delegated manufacturing and marketing to Buck.

He is widely regarded today as the first genius in modern marketing.

But before relocating those four miles into Durham, Buck had earlier left the family farm during his teens first to attend what is now Guilford College in Greensboro.

But he soon left there to attend a business college called the Eastman National Business College, a school of business in Poughkeepsie, New York (the image at this link dates to his tenure there.)

He may have been the quintessential Tar Heel at the time, accent, chaw of tobacco and all, but uniquely for his time he also had formal business training including a curriculum that included practical experience to inform his innate entrepreneurial and strategic gifts.

At 24 he was made chief executive of his family’s business and opened a branch in New York.  Before he was 30 he took the company public.  By the time he turned 34, Buck Duke headed a trust that controlled 80% of tobacco production in the world.

In what we call today a SWOTs analysis (strengths, weaknesses, opportunities and threats,) he was well aware that one of the biggest threats to his company came not from federal regulators but the soil depletion associated with growing cotton and tobacco.

At first tobacco had required fertile land.  But the weed-like varieties that yielded a much milder and more popular tobacco not only formed the basis of the Duke corporate empire but they grew on lands depleted by cotton.

But after a few years, even this tobacco wouldn’t grow without huge amounts of fertilizer, which became prevalent after the Civil War, as well as large quantities of water and eventually pesticides.

Still growing tobacco was leaving swaths of abandoned farm land unproductive because its topsoil had washed away.

Buck Duke did not know of tobacco’s harmfulness to health but he could readily see during his time that it was not good for the environment or future business.

With half of his life still ahead of him including new entrepreneurial pursuits in hydroelectric power and higher education in his home state, Duke bought a farm 45 miles west of New York City and assembled nearly 40 others, for a total of over 2,700 acres in all.

Northern New Jersey had been deforested for agriculture and charcoal by 1850, resulting in heavy erosion into the Raritan River adjacent to his land.

Any forest remnants that remained, here and there, were in poor condition.

Buck Duke foresaw by several years a call in 1896 by the state geologist for reforestation and protection of watersheds.  Primeval forests were extinct and nearly half of the state had been cleared of trees.

Forest fires were ravaging what remained to the south. half of them caused by sparks from locomotives.

Through much of his 40s, Buck Duke worked feverishly to recreate more of a nature area than an estate including excavating and/or rehabilitating, enhancing and connecting a chain of nine lakes and associated waterfalls.

All of this was protected by extensive reforestation of more than 2 million trees.

His vision, in the wake of deforestation, was to create a natural “wonderland,” but he also experimented with sustainable hydroelectric power there and methods to make both land and water more sustainable as well.

Within a few years, his work would be the inspiration for forest parks in New Jersey.

Coincidentally, this was the same period in which his father, Washington Duke, aided by other Durham leaders was busy relocating the 1830’s Trinity College to Durham as the foundation for what would later be renamed Duke University.

But rather than a retirement for Buck Duke, this period of creating what is called Duke Farms in north-central New Jersey was more of an entrepreneurial interlude to be inspired by his intrigue with hydrology and forestation.

It was also about this time that soil research became a national priority, including its indispensable role in life and its birth from forest.

The system Buck created with his natural restoration at the turn of the 19th century was designed to pump a million gallons of water per day from a canal above the Raritan River up to a reservoir.

From there the water was then controllably-released through gravity to flow successively down through nine excavated lakes and related waterfalls as well as restored meadows, lagoons and other wetlands before being reintroduced to the river much cleaner than when it was removed.

Lets just say that before he turned his attention a few years later, when not yet 50, to a startup back in his home state that would become Duke Energy today, Buck Duke knew what he was doing.

That experience through his 40s gave him an understanding of how to later rehabilitate thousands of acres of depleted farm land in his hometown of Durham by laying the groundwork near the end of his life for what would become Duke Forest as part of his transformation of Duke University.

Soil scientists estimate that in North Carolina where under virgin forest exists, it would take approximately 468,000 years to remove a topsoil layer, something that takes only a matter of minutes with today’s method of site preparation in advance of buildings.

Soil science is a discipline fathered as we know it today by another North Carolinian, Hugh Hammond Bennett.

But some who had previously also cut their teeth in North Carolina had been “erosion deniers,” as some policy makers are today.

Back then, evidence was mounting in some studies that would show that an average of 5.3 feet of topsoil sediment had discharged between 1820 and 1830 atop pre-settlement floodplains.

Ironically, many areas we consider treasured wetlands now were really created by these sediment avalanches.

As a ten year old, Bennett has been observing erosion on his family farm near Wadesboro at about the same time Duke was experimenting with how to prevent it as well as restore and protect polluted waterways.

Bennett was graduating from UNC and starting out his career by performing soil surveys in North Carolina counties in the two years before Duke returned to his native Tar Heel state.

One subsequent 1920 survey of Durham soils is filled with descriptions and information about Durham at the time Duke spent much of the last years of his life back here.

Based on a plan hatched in 1919, Buck Duke at the time of the survey was already buying up what would be 5,000 acres (today more than 7,000) of mostly depleted farmland in Durham dotted here and there by remnants of old growth forests.

But this was much more than what was needed for what are now Duke University’s West and Central campuses.

While much of the land he acquired would be reclaimed by forest, telltale gullies are visible today in the undergrowth, tombstones for an era of topsoil erosion.

Only today, the culprits behind that continued destruction are more likely to be mechanized site preparation for buildings which not only scrape off or crush fragile top soils but compact it so as to be impervious.

Most credit those acquisitions from 1919 through the early 1920s stretching across west and southwest Durham as well as west into Orange and eventually Alamance counties to Duke’s strategic sensibilities, a means that guaranteed access roads and water availability.

But his past experience suggests something even more strategic.

The School of Forestry created five years after Duke’s death is credited to William Preston Few, a longtime friend who was the university’s then president, along with a Forest Service veteran turned professor and researcher named Clarence Korstian, with the creation of Duke Forest.

Korstian had served in the United States Forest Service out West including a stint in the Pacific Northwest during the period of The Big Burn in 1910 before an assignment in the North Carolina Mountains.

He followed that with a stint at Yale before returning for a consulting assignment at Duke.

Few had spent a lot of time with Buck Duke, and while intrigued by Harvard Forest, in the mid-1920s he had recruited an ecologist named A.S. Pearse who was even more intrigued with the potential of the lands Duke had purchased.

Pearse connected Few with Korstian in 1927.  Buck Duke had died suddenly in late 1925 leaving behind one last stroke of entrepreneurial genius, a vast endowment so visionary it is as relevant today as it was then.

At his death, he was one of only 23 multimillionaires who had been born in the South, out of 331 nationwide.  But unique to others, he directed his philanthropy back to his roots.

It isn’t a leap to conclude that his influence was very present as Few, Pearse and Korstian envisioned Duke Forest.  Not at all.

If only shorter sighted policy makers in Durham today had the strategic sense of this earlier native son when it comes to the overall urban forest canopy.

Six Million Businesses and Shrinking

There are only 6 million active businesses in America.  Another 20 million are in name only according to Gallup.

They report that “Of the 6 million, 3.8 million have four or fewer employees,” otherwise known as micro businesses.

According to another study, most micro businesses never want to grow to more than 10 employees, which would place them among the one million businesses today with between 5 to 9 employees.

That means there are “only 2 million small, medium and large businesses in the United States,” including about 1,000 companies in the “big business” category with 10,000 or more employees.

For sources of “dark money” and undue, often opaque influence among lawmakers look to the larger employers, something shown in an investigative piece just re-published in Pacific Standard.

For job creation, however, look to those first two groups, especially micro businesses.

So how do we foster more of these concerns that generate the vast majority of new jobs?

Buy local, obviously.

Some experts point to enforcing regulations evenly along with simplifying some.  Most, however, point to making credit more available.

The rub is that over the last 15 years, small business loan volume is down 14% and loans made to micro businesses are down a third.

What happened?  One indication is that since 2008 alone, one in four “local banks” have simply vanished.

When I graduated from high school in 1966, more than 7 out of every 10 banks were small, single-office local banks, totally more than 10,000 nationwide.

Branch banking had become the norm by the time I moved to Durham, NC in 1989.

Today, there are half as many commercial banks overall as there were when I graduated from college in 1972 and fewer than 1,000 single-office or truly local banks in the entire country.

Even so, small banks and credit unions make most of the loans to small businesses, including micro businesses.  There are just fewer and fewer of them.

Contrary to lobbyists, the decline of small, local banks isn’t due to regulatory reform after the great recession.  Click here to download an excellent review of the reasons.


Far more compelling is that this problem began with policy changes more than a decade earlier.

In 1995, small banks and credit unions held 27% of bank market share compared to the 17% held by giant banks.

Today, giant banks control 59% of bank market share, more than five times as much as small banks and credit unions, and just four mega banks control most of that.

Now, the four largest banks alone control 42% of all banking, yet they make a very small share of loans to job creating local businesses.  Nor do they play nice with one another.

These four mega-banks alone control nearly four times the amount of banking as all of the remaining small banks and credit unions put together.

In the four years leading up to the great recession about 300 commercial banks disappeared each year but we were creating nearly half as many.

The vanish-rate continues, but we’re creating only 6 new banks a year on average according to the Institute for Local Self-Reliance, the source delving into much of these data.

Good policies and lending by small - usually stand-alone local banks -fueled the growth of America’s middle class in the 1960s and 1970s before anti-government rhetoric and deregulation began to hollow it out.

It is likely no coincidence that today this powerful segment of households is rapidly shrinking or that the deaths of businesses now outnumbers the births of new businesses.

As a moderate Independent, fiscally and socially, I find analysis intriguing that shows that nine out of the last ten recessions occurred under Republican presidents while Democratic presidents created nearly twice as many jobs per year.

Of course, this illustrates how intricate and complex economic development is but that the underlying principles always come back to main street as well as the political courage to resist powerful special interests.


It is also ironic that conservative states such as North Carolina where I live regulate cities and local governments from practicing the most basic tenant of economic development – buying local.

Unpacking What It Means To Be An Innovator

I’ve never been one to take compliments very well, a combination of being overwhelmed when lavished by a half dozen crazy (effusive) aunts and a mother who was determined to instill humility into me.

In my now concluded career, I didn’t set out to be an innovator, but when tagged with that attribute while serving three different communities and asked how it might be adopted elsewhere; I began to study what it means.

Fortunately, a new discipline began to emerge early in my now-concluded four-decade career called behavioral economics.  It has been just as important as organizational behavior in helping unwrap the 70% of our decision making that is emotional and seemingly innate vs. rational.

Gallup applies behavioral economics in its relentless study of individuals’ strengths and how some can make such a difference in the productivity of some organizations over others.

In Durham, where I live, we have had a head start.  One of the discipline's “rock stars,” Dr. Dan Ariely is one of our own.

Dr. Roland Fryer at Harvard has use behavioral economics to analyze how impoverished societies around the world, including African Americans and Hispanics in the U.S., often work to hold peer members back from doing what it takes to lift themselves out of poverty.

But I’ve learned the most about what makes some people innovators from a trio of researchers with connections to BYU, my alma mater, who authored a book based on their study entitled, The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators.

The book is jam-packed, but in addition to outlining what makes innovators different, the authors note studies showing that “roughly 25 percent to 40 percent of what we do innovatively stems from genetics.”

“Two-thirds of our innovation skills, they continue, “still come through learning-first from understanding the skill, then practicing it, and ultimately gaining confidence in our capacity to create.”

They also put their finger on why people thought I was somehow innovative.  One of the “discovery skills” they identify as central to being innovative is “association thinking.”

This is the ability to “discover new directions by making connections across seemingly unrelated questions, problems, or ideas.”

This is why I preferred to think of myself as maybe an “early-adopter” or “fast follower,” because it was somehow easy for me to see those unrelated connections to our work.

I won’t get into the other “discovery skills” they found, which differ from associational thinking because they are behavioral, but one is questioning everything, especially the status quo.  Innovators see things as broken.

I was also an entrepreneur in my field of community marketing because I was always involved with startups.  Not all innovators are entrepreneurs but I’m not sure you can truly be an entrepreneur without being innovative.

But all innovative entrepreneurs score very high in two areas, associational thinking and questioning.

In contrast, CEOs who are not innovators focus almost solely on “delivering,” what I affectionately call list-checking while innovative CEOs spend at least 50% of their time on “discovery.”

This is why I was always at my best and able to sustain innovation well in the corporate cultures I led well beyond the startup and growth stages.  I tried to surround myself with people who shared innovation as a skill at some level but who were also skilled deliverers.

Most organizations are not innovative because they don’t foster it as part of their organizational culture, leaving them top heavy at delivering but vulnerable to stagnation.

If an organization can sustain an innovative culture and innovative leadership well past the growth stage, the study found they outperform their peers.

Unfortunately, as the authors who are all business professors note, Business schools teach people how to be deliverers, not discoverers.

Rarely do I see a resume these days that isn’t salt and peppered with self-identified attributes such as strategic, innovative, entrepreneurial and growth-oriented.

Applicants would be better off explaining how eager they are to be in and learn from a culture with those attributes because the process is continuous and never-ending.

If you truly aspire to be innovative, read the book The Innovators DNA and take the assessment at its website.  It will identify your strengths in that regard and where you need to focus on building that skill.

The business professors behind this work are Drs. Clayton Christensen at Harvard, Jeff Dyer at BYU and Hal Gregersen at MIT and INSTEAD, who have also developed the Innovator’s Accelerator, an intensive online learning experience.

Today, organizations that don’t perpetually innovate are doomed to stagnation.

Unfortunately, unless governing boards, which constantly rotate members, are firmly committed to innovative leadership during CEO succession, even cultures where innovation is firmly entrenched can begin to stagnate in a matter of weeks and months.

It is possible to reignite innovation but it is rare.  Being innovative requires a certain nimbleness, what Dr. Christensen calls the ability to pivot strategy.

He often cites research by a Harvard college that found that 93% of successful innovators had pivoted to a strategy different than the one adopted at startup.

Experts at McKinsey & Company recently published a list of factors that distinguish innovative organizations.  Note what the high performers do right.  When it comes to a culture of discovery, high performers in the first quartile outperform those in the next one down by nearly 3 to 1.

Christensen, et al. have documented what they call an “innovation premium” of more than 20 percentage points.  For those able to sustain and institutionalize an innovation culture through all phases of  an organization’s lifecycle, it is 40%.

There is even a bigger dividend for analytical innovators.  As analytics are embraced more and more, the competitive advantage they provide will wane unless organizations are among the 12% an MIT Sloan study found to be analytical innovators.

Being a good manager means minimizing surprises and uncertainty.  It is why “being a good manager can make you a bad innovator.”  An innovation culture “savors surprises.”

The secret is finding and sustaining the right balance between execution and exploration.

Are you sure you want to warrant “innovator” on your resume?

Then roll up your sleeves and start reading for understanding and then begin practicing.  Don’t skim looking for thunderbolts, look for unrelated associations.

Not your cup of tea or strength?  Then hire people who are innovators with an appreciation for execution and build it into your organizational culture and values.

In the words of marketer Tom Martin, seek out “explorers, not experts.”  Resist peer pressure trying to pull you back into the status quo.  Get used to being different.

Savor surprises.  Embrace uncertainty.  Question everything.  Hang on tight.

Looking Past Present Hyperbole to Entrepreneurial Roots

Durham, NC “stayers” have always known better but “boomers” who bought into Raleigh, NC’s narratives over the years stand out because they believe Durham wasn’t “cool” to young people until recent developments made it “cool.”

By young people they typically mean those ages 18-39.  Those under the spell of this narrative can be identified because they demean Durham as it was 10 or more years ago.

The same people stand out because they also mischaracterize entrepreneurs and start-ups as being driven by people in this age group.

It turns out that by 1980, Wake County, where Raleigh is dominant, had only a half of a percent more of its population in the age group 18-34 than Durham County where the City of Durham is even more dominant.

By 1990, both experienced a slight decline proportionally.  But during the 1990s when that taunting was taking place, it turns our Durham surpassed Wake/Raleigh in appeal to this age group.

By 2000, well before downtown Durham became “cool,” Durham had already surged ahead by 3 percentage points, a gap it widened to 5 between 2009 and 2013.

In fact for more than twenty years, Durham has had a greater proportion of this age group in its population than any other urban area and the state as a whole.

Durham also excels in the percentage of this population with a Bachelor’s Degree or higher, greatly exceeding Wake/Raleigh over more than three decades.  Durham is now double the proportion statewide in this category.

But Durham’s entrepreneurial nature dates to before settlement and has never been reliant on this age group alone.  In fact, studies in other urban areas such as Silicon Valley and New York City have found that founders of start-ups average 31 years of age with the median age today about age 38.

A third were 40 or older and about a quarter were in their later 30s.

What should be of interest to state officials who have been critical of colleges for the majors their students choose is that 64% of the tech founders in New York City did not major in engineering, mathematics, electrical engineering, computer science or other STEM categories.

In fact, more studied history, philosophy, marketing, business and political science.

A relatively new book I’ve been reading entitled, The Vanishing Neighborhood: The Transformation of American Community, by Marc Dunkelman, a researcher at Brown, is commended for many reasons.

One, is that it provides insight into why and how communities such as Durham have sustained entrepreneurialism in its DNA for nearly 200 years and why other communities, however bad they seek it including those nearby have remained “stovepiped.”

It also gives insight into why the way Durham is going about revitalization of its downtown may be too one dimensional, putting at risk rather than enhancing the community’s sixteen decade old tradition.

Dunkelman cites evidence that “economic dynamism, in essence, emerges less in the cliques…than in the longer list of contacts we each maintain in our virtual rolodexes.”

This goes back to a study in 1973, less than a year after I graduated from college, by Dr. Mark Granovetter, that found that when it comes “to the spread of innovative concepts, the connections we maintain with our closest contacts are not nearly as important as the breadth of our extended networks.

There is an editorial from the Raleigh newspaper in the decades after the Civil War that ridiculed Durham by opining,  “Have you seen what they are doing in Durham? Whites and Negroes are working side by side on the same street, like a wild west town.”

But according to studies, it was this characteristic that had long before and after the editorial has fueled Durham’s entrepreneurial character, an incarnation of which is heralded today as though it is something novel.

Washington Duke, Julian Carr and James Buchanan Duke were early entrepreneurs in Durham but hardly the first.  Yet, what fueled entrepreneurialism here, I can see from the studies reviewed in Dunkelman’s book, including Granovetter’s seminal work, was not the connections among friends and family or cliques among Durham’s elite.

An example that scholars have studied, is that different than other southern cities at the time, blacks and whites in Durham enjoyed extended friendships and relationships and invested in one another’s ideas and startups.

Researchers at the Neighborhood Policy Institute were analyzing and writing about entrepreneurial enclaves such as Durham a quarter of a century ago when I first arrived here.

John Merrick, one of the founders of North Carolina Mutual Life Insurance Company, an anchor on “Black Wall Street” here in the late 1800s, was a barber for Washington Duke and Julian Carr who invested in his idea.

In this newest reincarnation, many here rightfully worry that downtown Durham, by becoming a little too cute and more of a creative class resort is purging this socio-economic diversity so critical to Durham’s entrepreneurial DNA.

It is in grave danger of losing the “side by side” heritage that has repeatedly propelled its entrepreneurial bones.

Research in The Vanishing Neighborhood would strongly suggest that fostering entrepreneurs in Durham's future will take a lot more than hubs that let startups and researchers rub shoulders.

There is incredible value from respecting, mining and learning from our community’s past.  Durham “stayers” know this and it is why for decades now, while repeatedly leapfrogged by officials and developers, they have ranked a local history museum as the top cultural priority.

Just as important to Durham’s entrepreneurial future is repopulating it with the black, Hispanic and Asian businesses that give Durham as a whole its character, as well as people from a wide socio-economic range.

It is important to remember that not only has Durham been a magnet for residents age 18 to 34 including a much higher percentage with college degrees, but it also has a higher percentage who live in poverty.

The Rare 2.5%

Over lunch, prior to giving a guest lecture a few months ago, a college professor friend of mind told me I had always been entrepreneurial.

It was a mixed message to me.

The same observation had been made by others but I always took it to mean that during my now concluded career, I had specialized in startups for community marketing three different destinations.

The mixed message came from other friends and associates who criticized me for being too data-driven, for not “thinking big,” for being too strategic and process oriented, even too altruistic.

To them, the latter were not hallmarks of being entrepreneurial which contrasted to their view of me they instead fashioned themselves to be.

It wasn’t until the last few years of my career, when I met Christopher Gergen, who walks the entrepreneurial walk and also teaches innovation and entrepreneurship at Duke University that I began to grasp why he and others such as Dr. Dana Clark at ASU saw me as entrepreneurial.

The idea that entrepreneurism could, in part, be altruistic was also becoming clear to me by then.  The organization I led until retiring five years ago spearheads the Durham’s Annual Tribute Luncheon, in lieu of an annual meeting.

The idea was and maybe still is to shine a light on people who fostered and shaped Durham values and unique sense of place.  In the year I retired, the event honored social entrepreneurs such as my neighbor Kevin McDonald.

Being entrepreneurial has become one of those traits that without any idea of what it means now gets salt and peppered into resumes.

For others who boldly claim to have this trait, I am reminded of a saying by a friend of mine had that “there is only room for one person at a time to stand on principle.”

Actually, being entrepreneurial, as a trait, exists along a spectrum.

Over three decades of research and analysis, Gallup has zeroed in on the ten talents exhibited by successful entrepreneurs.  On a scale of 1 to 10, I score higher than six on all but one of them and through working hard brought that one up to a 4 or 5.

Turns out I score much higher on “thinking big” than I was given credit for by detractors, because as Gallup has ascertained, I took an “analytical approach to challenging or uncertain decisions.”

Who knew?

“Replacing emotion with a rational thought process,” according to Gallup’s findings, “helps accurately calculate their odds of success.”  By this this they mean in the long term and in association with other needs.

Looking at a distribution of entrepreneurial talent nationally, Gallup calculates that just 5% have it at a level that produces “significant superior business performance. 

Gallup also calculates that of those working adults in the US who currently do not own a business, about 2.5% have very high-level entrepreneurial talent.

That’s about 5 million people who could, if tapped, generate an addition $25 trillion into the US economy.

Or a few may get scooped up by community marketing organizations tasked with generating visitor-centric economic and cultural development by guarding and leveraging sense of place.

Judging by Gallup’s calculus, that means for those community DMOs wanting to scoop up an exec with talent for innovation and entrepreneurialism, there would currently be about 15 in the entire U.S. currently at the helm of community marketing organizations.

I know of two and possibly even three running DMOs in North Carolina which matches Gallup’s calculation.  Most communities won’t despair because they don’t value those traits anyway beyond lip-service.

Even those that do and are fortunately to land someone with those talents must be eternally vigilant against some in the community who instead will try to undermine them.

Hopefully, my friends in the program at Appalachian State University are fostering students with natural talent for innovation and entrepreneurism in quantities sure to increase that pool beyond just replacing those who retire.

Gallup ascertains that we are born with certain talents but rarely would anyone be born with very high levels of each of the 10 talents found in high-performing entrepreneurs.

Training, support and development such as education won’t create a talent where it doesn’t exist but they can move someone with those traits up the scale.

That’s why, for instance, I was only able to get one of those traits up to average while some that came easier moved much higher on the scale.

But the challenge for educators seeking to generate a new generation of DMO execs with these traits, it is a challenge.  The typical management program may find that 17% are interested in tourism including 4% who are inclined to DMO management.

Between 2.5% and 5% will have the innate talents to work with that will make them highly successful in as entrepreneurs and innovators. 

Of course, many communities only give those qualities lip-service but for those seeking leadership with those capacities, the odds are very tight.

I hope that colleges now use tests such as Gallup’s StrengthsFinder to help students understand their particular latent talents so they can work at improving them and avoid thinking these can be accumulated merely with coursework or certifications.

When he was younger, one of my grandsons used the term “talkers” to describe news and sports analysts and commentators. Perhaps I am considered one in retirement (smile.)

Many communities now have boosters capable of being “talkers” about the importance of drawing talent.  Being a “talker” is a talent in and of itself.

But this doesn’t mean these people realize how rare entrepreneurial talent is let alone understand the community attributes and values people with those talents find most essential and appealing.

More can often be ascertained by the values a community consistently exhibits across each and every touch point than from any volume of marketing materials.

When it comes to fostering community brand appeal, it is as much about “storydoing” as “storytelling,” and many who are only “talkers” when it comes to attracting talent are betrayed as otherwise by their “storydoing.”

Hubs such as American Underground with two sites in Durham nurturing 158 startups and a satellite in Raleigh with 32 are pivotal.

But venture capital and nurturing become less relevant to retaining entrepreneurial talent when communities fail to exhibit other core values and traits that are important to them.

Only with that understanding and alignment at every touch point across both public policy and every organization related to economic and training will the best and most consistent decisions be made.

The Overlooked Attribute for Appeal to Creatives

Not only is the term creative class misused, but lost in most analysis of research about this bellwether group is the role of landscape appeal.

It is also another reason why officials in Durham, North Carolina, where I live seem short-sighted to keep skipping over the importance of conducting a thorough community-wide i-Tree inventory of tree canopy.

Researchers now unpack the creative class into three types of knowledge workers by occupation or avocation: synthetic, analytic and symbolic.

Analytic creatives work in universities or research labs and in the R&D divisions of corporations.

Synthetic creatives such as entrepreneurs are those involved in applied research, e.g. taking discoveries or what works in one area and applying it to concrete solutions in another such as with processes or systems.

Symbolic creatives are those in the cultural industries including everything from design and packaging to marketing organizations to curators, artists and musicians.

When communities such as Durham seek to perpetuate appeal to the creative class, they are focusing on the small percentage of individuals who will relocate in a four year span.

Symbolics are the least mobile, while analytics are the most.

According to Dr. Richard Florida, “many confuse creative class with young workers” but age 25 to 35 just happens to be the cohort least rooted.  Even then, rootedness and authenticity, more than “hipness” are the attributes of places to which they are most drawn.

In 2003, the year after first publication of The Rise of the Creative Class, I formed a consortium in Durham, to drill down to the county level, long before data mining made that the gold standard.

We were one of the first in the nation at that level to do so.

But not until digging deeper into the research did I realize until recently that the analysis missed one of the most important attributes to creative class appeal, which is natural setting.

Still, as far as it went, It turned out our hunch was correct.  Durham County and the four-county Durham MSA, now hyphenated to Durham-Chapel Hill were identified as some of the highest concentrations of creative class workers in the nation.

Some people who were too impatient to read the research or the book would leap frenetically in an effort to pigeon hole the create class, jumping to classifying it as only as artists, then ad agencies, then entertainment venues and as some still do now, as entrepreneurs.

Of course, the creative class includes or is drawn to places with those attributes and populations but it is more complicated than that.  For example, the groups including those noted above are far more comprehensive, and sometimes things have different meanings.

For example, by entertainment venues, an active street music scene is far more relevant than large-scale venues, especially those that have high ticket prices and where it is hard to come and go during performances.

Overlooked is that “outdoor amenities” are a key ingredient to places where creatives are drawn and congregate.  “Outdoor” unpacks into landscape, climate and recreational influences.

“Landscape” preferences include forest and open country as well as topographic variation, e.g hills and dales, lakes, rivers and access to mountains and coasts, etc.

The greater forest cover a place has, the higher its appeal.

Anyone truly familiar with Durham can see why it is appealing to and has such a huge creative class sector.

Values such as tolerance (we prefer the word acceptance here,) historic building that are appealing to creative class ventures, organic districts such as Brightleaf and Ninth Street, historic neighborhoods, a world class R&D park and two research university are pivotal.

It has a renowned foodie and cultural scene, a downtown entrepreneurial hub along with a landscape mix of urban, small town and rural as well as waterways, greenways and the 60% of forest canopy remaining as shown in the image above of North Durham.

It is the same mix that visitors find so appealing, including the 80% to 85% of newcomers and relocating executives who scout the community first as visitors.

They may be drawn by the community’s overarching brand (more than a logo or tagline) and the coherent storytelling of its marketing organization but only because Durham delivers on that personality.

Officials here have much to worry about including elimination of poverty.

But only by fostering all three elements of Durham’s incredible sense of place, a distinctive cocktail of “built,” cultural and natural assets, can its vitality be ensured so as to generate the resources needed.

Most at risk is its natural setting or landscape because it is the most fragile.  It can be so easily cannibalized by the first two place-based ingredients but without it, they are nothing.

1 Corinthians 13:13, adapted to sense of place, would read – And now these three remain: “built,” cultural and natural.  But the greatest of these is “natural.”  Because it is the most fragile.

A Tactical Importance of Strategic Mindset

You would think from the news that people are complaining a lot about having the option of checking mobile devices during leisure trips.

But research (see full study) shows that of the 88% of travelers worldwide who take mobile devices along on leisure trips, six-in-10 use them once a day and only 22% for work-related, e.g. checking emails.

Among American leisure travelers, nearly five times that use is for staying  in touch with family or friends or to take photographs or videos.

The top two travel apps are GPS/Google Maps and those created for communities by destination marketing organizations (DMOs) such as the three which I led during my career.

Other research suggests that those who complain about technological access may actually have trouble thinking strategically.

So they cover it up with hyperactivity and then humblebrag about it, to use a term coined by author, comedian and TV producer author Harris Wittels.

It is a form of false modesty that author Greg McKeown applies to people who complain about being harried as a “sort of back-door-way to brag about being busy,” code for “being successful and important.”

In another of his insightful books entitled, Essentialism: The Disciplined Pursuit of Less,” his research makes the case that paradoxically, people who complain/brag like this have trouble deciding what is important at work and at leisure.

It isn’t about IQ though.

Roger Martin, a researcher in strategy-making at the Martin Property Institute finds that smarter people often struggle at being strategic because they get caught up in making the “right” choice rather than just the “best” possible choice.

Working now less than we did in the 1960s and 1980s, unless you are working single mother, Americans on average can’t complain of being overworked.

Maybe it just seems like we are because newsrooms seem drawn to anecdotes, perhaps heard there first.  Humblebrags lead to especially juicy anecdotes.

For people with a strategic mindset, having access to mobile technology on a leisure trip provides peace of mind and enables deeper relaxation.

It is about trade-offs because they know they won’t be holding co-workers up waiting for something simple, and also because they can nip issues in the bud before they fester.

The secret is the related skill of focus, more specifically, the ability to quickly refocus back on leisure (they can also take power naps.)

Those who can’t do this on a leisure trip probably aren’t able to at work either.

Even people who complain about technological access probably don’t when it permits them to soften the distinctions between work and leisure time, e.g. attending their kid’s school-related events.

They might also suffer from an odd definition of leisure, placing it in perpetual tension with work.

These are the folks who drain every second of vacation time and usually return exhausted from working so hard at it.

According to Dr. Ken Matos at the Families and Work Institute, a better definition of leisure is actually being able to “do what you want, when you want to do it,” including perhaps switching on and off more frequent “10-second” vacations during the workday.

“Mental flexibility,” including the ability to shed distractions and/or immediately refocus back on tasks, is one of the three pivotal “executive function” skills we begin to learn between ages 3 and 5.

They are the scaffolding for learning skills such as focus, planning, prioritizing, scheduling, anticipating, deciding and analyzing according to Dr. Edward M. Hollowell, the author of Shine: Using Brain Science to Get the Best from Your People.

Studies show that focus, in particular, is a better predictor of both health and success than IQ or background.

We continue to hone “executive function” skills at home and in school well into adolescence.

Adults who haven’t mastered them find themselves ill-equipped for the workplace. But while more difficult, it is possible to hone them even then through diligent exercise.

However, lacking them isn’t just about coming from a disadvantaged background.

In my four-decades as an executive I was always puzzled when I came across high performers who lacked one or more of these skills even though they came from secure homes and earned good grades through college.

Giveaways signs were a low tolerance for uncertainty or complaining about finding too many emails waiting for them on Monday morning or being aggravated at having to change or shift gears throughout the day.

Trying to kid them out of their angst by asking if they would rather find an old-fashioned inbox full of paper memos and yellow sticky notes dated me and went right over their heads.

When that didn’t work I would try to teach them how to quickly and strategically triage emails before closing them by either taking them as an FYI and deleting, quickly answering before deleting, delegating them, or tracing for follow up as a project.

Overload is usually a sign someone is postponing this triage while repeatedly opening and closing the same emails.

It is also an indication that someone probably isn’t protecting or spacing their calendar from all but two meetings per day, one in the morning and one in the afternoon.

Frustrated, I would often mistakenly resort to trying to breathe fire or a sense of urgency into them or by just trying even harder to show by example what seemed easy to me.

But I realize now these otherwise high performers didn’t just struggle with the discipline we all do to minimize on average the 75% of all distractions in every workplace that are self-interruptions.

It also wasn’t enough that we worked according to a “best practice” strategic plan, nimble enough to be organically tweaked each time new or better analytics became available.

More than lacking in strategic mindset, these otherwise high performers may have just needed more time to think.

Knowing what I know now, I could have instituted one of the hundreds of gems in McKeown’s new book including one attributed to Frank O’Brien, the founder of a 50 or so person marketing organization called Conversation:

A once-a-month, day-long, full-staff unstructured “think day.”

Known for organizational strategy, I had one glaring weakness.

To appease community interests who were lagging behind, when we would calibrate differentiation for the community based on newer or truer analytics, I would sometimes try to straddle strategies, a term coined by Dr. Michael Porter.

It works for investments just not organizations (especially community organizations.)  It “forces us to make sacrifices on the margins” warns McKeown, hardest in my experience on high performers.

That was often accompanied by another mistake, trying to take the pressure off high performers by filling vacancies way to fast.

Not until the last decade of my career did I find and adopt a much tighter selection process and begin to “hire slow and fire fast.”

Consultant David Camner showed me that a vacancy or two is far less costly than a poor hire.

As former Apple-evangelist Guy Kawasaki, author of The Art of the Start intimates, poor hires attract more poor hires who weigh high performers down, even resulting in a “Bozo explosion” and the need to clean house.

I’ve known some private organizations with incredibly narrow missions that work without plans of any type, not even job descriptions.  Based on what we know now, that was a faulty notion that strategy-making was passe.

Today, having a strategic mindset and hands on analytics are the foremost “must-haves” for executives, even more important than creativity for marketing execs.

In part, McKeown’s book takes many of the strategy-making principles in a book on organizational strategy by Dr. Porter that I read in Anchorage in the mid-1980s and referred to incessantly while differentiating Durham during my final stint down to the the individual  level.

Whether organizational or individual day-to-day, strategy-making is all about “…making choices, trade-offs.”

Technology is not really the problem.

Durham’s Movement Entrepreneurs

There is a story behind the story of sit-ins which involves two social entrepreneurs who formed a friendship in 1949 while attending college in Durham, North Carolina, where I live.

By the time I arrived in 1989, one of these entrepreneurs, Floyd McKissick, had passed away soon after being appointed a judge by Governor Jim Martin, the Republican governor prior to the one we have now.

I met the other entrepreneur, Doug Moore (shown a few years ago in the image below,) long after he had moved away when I answered the phone in my office soon after my arrival in Durham and heard him say, “Hi, I’m in town and I understand you’ve been asking about me.”

For several weeks this time each year, the news media falls prey to a narrative it created around a sit-in that occurred in Greensboro, North Carolina.  More than three decades after the notion was debunked by researchers and scholars, reports still often mislabel it as the first or most significant.

But any understanding of the Greensboro event requires knowing more about Durham, a community known for entrepreneurs since its founding, including by the 1880s, people of color, both those descended from free blacks and those from former slaves.

New research published last month in the American Sociological Review points to the nexus that makes some communities, such as Durham, stand out as ecosystems for entrepreneurs, both homegrown and as a magnet to draw them from elsewhere.

One of the investigators on that study, Dr. Martin Ruef at Duke University here in Durham, is also responsible for a groundbreaking analysis in 2012 comparing the valuation of black labor in the South from 1831 through the years immediately after slavery was abolished.

The two Durham social entrepreneurs at the heart of the sit-in movement were drawn here to further their education from roots in Asheville and Hickory in western North Carolina.

After going on to achieve advanced degrees in law and divinity, McKissick and Moore reunited in Durham as neighbors in the summer of 1955, in the tumultuous weeks after the Supreme Court published its ruling in Brown vs. Board of Education  in which separate facilities based on race  were declared inherently unequal under the Constitution.

These two Durham social entrepreneurs anticipated that the South overall would be reactionary, often enabled by Black Bourgeoisie, (middle class) perhaps because some had built businesses based on separation or because some just feared rocking the boat.

Neither Floyd B. McKissick nor Reverend Douglas Moore were strangers by that time to “direct action.”  Both had been inspired by Pauli Murray, who had been raised in Durham.

They were also influenced by the book From Slavery To Freedom, which had been researched and written in part in Durham by Dr. John Hope Franklin in the years before he settled here.

In 1943, Murray had published a powerful article in New York entitled  Negroes Are Fed Up and then participated in a demonstration at Howard University in 1944 before publishing States’ Laws On Race and Color in 1951, used as a “bible” during Brown vs. Board of Education.

McKissick had been on a Freedom Ride through the South in 1948 and Moore had repeatedly refused to give up his seat on buses in several cities in North Carolina during the early 1950s, preceding the storied event in Montgomery that drew the attention of Moore’s graduate school classmate, Dr. Martin Luther King Jr.

McKissick and Moore lobbied within the NAACP, which opposed mass action, arguing that it would take much more “direct action” than the Supreme Court case.

So, adapting Boy Scout principles, the two Durham friends quickly organized training schools in the basements of five Durham churches.

These weren’t establishment black churches such as White Rock but smaller churches such as Moore’s 25-member missionary congregation meeting in Asbury Temple United Methodist as well as Union Baptist, Mount Zion, St. Mark and St. Joseph’s.

In 1956, on the heels of the Montgomery boycott, Moore also wrote to his classmate King with the idea of forming a regional organization and pressing him to fully embrace “direct” vs. purely “pacifist” action.

In the meantime, McKissick and Moore forged links between movement centers in other states to intensify the swell of sit-ins from 1957 to 1960.

Some, such as one of the sit-ins in Durham became significant court cases.  Students, including those involved in the later Greensboro event, as well as many from nearby states, came to Durham for training and planning.

Another key entrepreneurial innovation by McKissick and Moore is that they deepened mere linkage among movement centers into a communications network that enabled movements in Durham and other states to be coordinated.

It was this network that triggered mass reaction when a sit-in occurred in Greensboro.

Within hours, King was in Durham meeting with McKissick and Moore as a prelude to publicly endorsing mass, direct action.  At the heart of its success, culminating in the Civil Rights acts of 1964 and 1965, lay the entrepreneurial network spawned in Durham.

The story behind the story came to my attention in 1989 from reading a new book by Dr. Aldon Morris entitled, The Origins of the Civil Rights Movement.

Part of jump-starting Durham’s community destination marketing agency, as I did, was reclaiming its story and I quickly laced the author’s findings back into Durham’s story.  It didn’t hurt that one of my most vocal advocates became John Hope Franklin.

I also began to ask around about where I could find Reverend Douglas Moore and soon the phone rang.

More than two decades later, newbies to Durham are promoting entrepreneurial activity, a few as though it is something new, some futily hoping to export it and others fully aware that this is only the latest manifestation of an an attribute inherent to Durham’s personality.

Manifestation of a Community Value

Many felt it was prescient that Durham, North Carolina, where I live, happened to honor social entrepreneurs at its Annual Tribute Luncheon in the spring of 2009.

Conceived in 2008, the honorees for that event seemed to foretell an explosion of entrepreneurial interest here including campus-like hubs such as Bull City Forward and two American Undergrounds.

However, that may be more coincidence.  The roots of Bull City Forward can also be traced to meetings in 2008, one of which was attended by an ATL organizer.  So it appears the revelation itself was entrepreneurial.

But Durham’s almost temporal entrepreneurial nature had been unearthed two years earlier during a two year process from 2004-2006 involving hundreds and hundreds of residents as well as external audiences culminating in the distillation of Durham’s “overarching” personality including community values.

It may also be coincidence that the notion of “social entrepreneurs,” was simultaneously gleaned during that two year drill-down to reveal Durham’s brand, when one of the executives involved with managing that process happened to read a 2004 Fast Company Magazine article.

The magazine recognized 20 companies as “best of the best” social capitalists including one based in Durham, The Center for Community Self-Help which was founded in 1980.  This clue led to uncovering a deep vein of community interest and activism that had been long taken for granted.

The idea that Durham is inherently entrepreneurial didn’t surface from a wish to be so or from envy or because it is now in vogue, but because it was unearthed by hundreds and hundreds of citizens digging down to discover Durham’s enduring distinctiveness.

A community’s personality, or brand in marketing parlance, is not an aspiration or a slogan or a tactic or even a strategy.  It can’t be imported, exported, transplanted or developed.

Its elements cannot be not born of or made sustainable from envy or trends.  While not always unique to a community, their distinct manifestation is.

Today’s press is all about the incredible American Underground with two 20,000+ sq. ft. downtown Durham campuses within a few blocks of each other.  It was recently recognized as part of the exclusive Google for Entrepreneurs Tech Hub Network.

But this and any subsequent efforts will always stand on the shoulders of generations of entrepreneurs here dating to the late antebellum 1850s of Durham’s founding.

That is what I mean by near-temporal.

Durham’s Food Scrap Entrepreneurs

A few months ago, a start-up in Durham, North Carolina where I live began Tilthy Rich Compost, a business that picks up food scraps from subscribers on a weekly basis, then turns it into compost a few miles from downtown.

Currently, the service area is approximately a five mile radius of downtown and expanding.  Pick up is mostly by bicycle for neighborhoods and a truck service for commercial clients.

The company will even return the finished compost to you if you wish, for use in your garden or landscape.  They also offer the service to restaurants, commercial kitchens and cafeterias.

At our house, we only eat at home a few days a week, but they have a smaller bucket for people like us and a larger bucket for families that eat at home regularly.

The new company is emblematic of Durham’s distinctive entrepreneurial personality, in particular social entrepreneurship.

Forty percent of the nation’s food supply goes to waste and I am sure Durham is no exception.  Residential food scraps alone make up 12.4% of municipal waste across America, a greater percentage than plastic.

In restaurants, according to the report Wasted, analysts at the Natural Resources Defense Council calculate that 4% to 10% of food becomes waste during preparation before it gets to the consumer.  Another significant portion is served but not eaten.

Approximately 10% of fast food is discarded because it has been prepared but not purchased within safe time limits.  At home, Americans throw out approximately 25% of the food and beverages they buy.

Often, if you are like us, food products are discarded either because  plans change and they spoil or because I in particular am one of those people perpetually confused by “use by” and “best by” date labels.

Even before consumers buy groceries, a food industry consultant estimates that up to one in seven truckloads of perishables delivered to supermarkets has to be thrown away.

Analysis in the United Kingdom estimate that if food scraps were removed from landfills there, greenhouse gas abatement would be the equivalent of removing a fifth of all cars in that country from the roads.

By the time I retired four years ago, 90 cities and towns in the U.S. had begun offering food waste collection, double from two years before.  North Carolina composts below the average for the Southeast.

I suspect though, that a personalized and scalable service such as Tilthy Rich Compost will always be in demand.  In our part of the country, as a developer-friend of mine jokes, soil so easily becomes compacted that it almost qualifies as impervious.

We need all of the compost we can get.

Reflecting the Centennial of a 23-Mile First!

I’m not sure where I will be on January 1, 2014 when a major milestone celebrates its 100-year anniversary but I’ll be thinking about it in November as I survey Old Tampa Bay when I tag-along to a wedding.

I’ll be standing along the seawall at Safety Harbor north of St. Petersburg where the peninsula between the bay and the Gulf of Mexico chokes down to just a few miles across.

Looking South toward the narrow mouth of Old Tampa Bay, I’ll have a perfect view of where the very first-scheduled, fixed-wing commercial passenger flight crossed over just below Weeden and Picnic islands on its 23 mile flight path from St. Petersburg before landing at the mouth of the Hillsborough River in Tampa.

St. Petersburg is the Durham of that polycentric region while Tampa is the Raleigh.  The similarities are cultural too.

St. Petersburg has a distinct personality including indigenous culture including a local history museum, founded after the flight which features a replica of the Benoist Model XIV seaplane, Number 43 flown by the St. Petersburg – Tampa Airboat Line.

When not on scheduled runs, the seaplanes flew charters to and from places such as Safety Harbor where I’ll be staying and north to Tarpon Springs.  The former mayor of St. Pete was the first passenger on the first flight, not because he was a dignitary or because the community underwrote the venture.

He won that privilege at auction as many others did the first few weeks.  His bid was $400.  The regular fare for the trip was $5 and proceeds of the auction went to buy harbor lights for St. Petersburg.

The two cities anchoring the route were about the same size then, just less than 10,000 souls each.  But St. Petersburg, as is often true of communities with a solid sense of place, was the more entrepreneurial of the two and half its population turned out to see the first airliner take-off following a parade from downtown.

Tampa sniped , “All airboat passengers have been from St. Petersburg and are apparently eager to get to Tampa.” A similar number came down to see the seaplane land with the first passenger.

St. Pete countered, “'It is noticeable that the time from Tampa is always faster than the time to Tampa. Once having reached Tampa, no matter how anxious to get there, the passengers are always in a hurry to get away.”

Back in the day, traveling across the bay between the two cities by steamship took two and a half hours, by train twelve hours.  The new airline flight took 22 minutes.

When I learned to fly a few years ago and before I came to the realization that cost and sheer logistics of flying as a hobby made it impractical for me, I flirted with the the idea of an ICON A5.

The revolutionary new single-pontoon sport seaplane can also land on wheels and fold up to be transported like a boat.  It even has a cool parachute that deploys in emergencies to bring the entire plane down safely.  Then I realized it costs almost as much as a house like mine.

While similar in some aspects, the Benoit seaplane used in that first commercial airline venture flew just five feet off the ground and even landed briefly in route that first day to tweak something because the engine was misfiring.

With a two-stroke engine like my Harley Crossbones, it had 28% less horse power.

St. Petersburg is known for other firsts, such as implementing a dual water system that reuses treated wastewater instead of putting it into the bay, which the newly founded EPA prohibited in 1971.  It was quickly adopted by other communities up the peninsula and in other areas of Florida.

But the entrepreneurialism behind the first airline began in Missouri not Florida where the Benoist Flying Boat was designed, built and tested on the Missouri and Mississippi Rivers.  It was a boat engine salesman who lived in St. Petersburg who saw its airline potential.

That first passenger airline ran until the snowbirds went home for the summer.  It had only been a decade since the first flight in North Carolina or the “firster” flight now documented in Connecticut.

The federal government made further commercial flights viable a few years later through research and development during World War I and after by subsidizing airmail routes that evolved into passenger airlines such as United.

True innovation begins at the margins.  Back then, airlines understood that while commercial aviation is all about the destinations, the flight to get there is pivotal to the overarching brand of travel, not just a means of transportation.

A Leap Forward For Intra-Neighborhood Communication

Durham entrepreneur Hartmut Jahn has created the next generation in neighbor-to-neighbor or intra-neighborhood communication. Years ago Durham neighborhoods jumped on listservs as a way to communicate but now Neighborship takes listservs to a new level.

The new platform offers everything a listserv does and so much more including:

• A website for each participating neighborhood

• The option of a personal inbox and a method of sending emails for each participant

• A chat option in addition to email or digests for quicker exchanges

• A way to enlist and post recommendations for vendors and service providers

• A means to communicate alerts or information to immediate neighbors rather than the entire neighborhood

• The ability to get immediate notifications or digests of exchanges

• The ability to post announcements or events that hopefully will soon tie directly into the Durham Community Calendar maintained by DCVB.

• A map of the area covered by each neighborhood etc.

For an example of a neighborhood page, I’ve put a snippet of my Rockwood Neighborhood page as an image in this blog. You should be able to click on it to enlarge. Other neighborhoods will be visible after registration.

To register to use Neighborship, click here. To request that your neighborhood be added to the drop-down, email help@neighborship.com .

I haven’t heard back yet from the administrator for my Rockwood listserv but I know the emails can be pre-loaded to any neighborhood added to Neighborship to make the transition easier. Understandably, although ironically, some neighborhood that that were early-adopters of listservs may feel some reticence, even inertia when it comes to change.

That’s natural but the new platform is a great leap forward and Neighborship is rolling out to communities across the nation making it yet another reason to believe Durham is indeed where great things happen!

Start-Ups +3 Existing Firms -1

People collaborating on innovations, whether at the core or at the margins, find it almost impossible to later unwrap the specific DNA of the magic that results.

That’s why Michael Goodmon, the VP-Real Estate over the American Tobacco Complex and his father Jim Goodmon, who spearheaded the public-private, adaptive-reuse of the historic Lucky Strike Factory in Durham, North Carolina, may not be able to readily disaggregate the full story of the resourcefulness and passion behind the revolutionary American Underground.

A subsequent study released last week by the Kaufmann Foundation isn't the source but it certainly is validation. The 12-page report reveals that start-ups such as those for which American Underground has been created, are the nation’s true job creation engine.

New firms nationwide add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually. The finding is based on an analysis of existing and start-up businesses from 1977 to 2005 and the averages indicated in the study hold up for all but seven years in that span.

Maybe even more remarkable is what happens during recessionary cycles. During downturns, the job creation in start-ups remains stable while existing firms are highly sensitive to the business cycle.

The job generation decline at existing firms occurs as they age. On average, one-year-old firms create one million jobs annually, while ten-year-old firms generate only an average of 300,000. The study upends conventional wisdom that businesses bulk up in the aggregate as they age.

The study further supports an earlier Federal Reserve Report published in 2007 citing that the net job impact of recruiting large corporations is close to zero.

The report describes that the impact of traditional economic development, known as industrial recruitment or “smokestack chasing” from a time when most relocations were manufacturing-oriented, has long been exaggerated because it wasn’t realized there are negative spillovers to relocation of large employers as well as positives.

A study of U.S. Census data reveal that between 1990 and 2003, 80% of jobs were created in firms of less than 20 employees. The large firms, often coveted by communities, generated less than 8% of the net new jobs.

The revolution this new information is having on this particular form of economic development, traditionally reliant on recruitment and incentives, has not been lost on the City of Durham or the County of Durham which contracts with the Durham Chamber of Commerce or Downtown Durham Inc., an advocacy organization funded in part by both local governments.

The findings are also validation for Bull City Forward, a collaborative to encourage social entrepreneurship, and the Durham-based Council for Entrepreneurial Development now relocated Downtown to American Underground.

They also validate the efforts of the organizations involved in “place-making” such as the Durham Convention & Visitors Bureau, Preservation Durham and the Durham Arts Council. By protecting and shaping and sustaining the unique identity, organic attributes, values and traits of this community, in essence, its unique-sense-of-place they draw the creative class workers so crucial to start-ups.

The reports also strengthen the calls by leaders such as Bob Ingram of Hatteras Venture Partners for a concerted effort to expand the sources of available venture capital for start-ups.