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• <br /> Economic Development Strategies in a New Economy <br /> Times have changed, and with them so has the underlying economic <br /> structure in which we all live. This new economy requires smart thinking by <br /> our leadership facilitated by new ways of solving problems and collaborations <br /> with sometimes unexpected partners. In the new economy, the ticket to <br /> faster and broader income growth is innovation. This economy puts a <br /> premium on what the Nobel laureate in economics Douglas North calls <br /> "adaptive efficiency," which refers to the ability of institutions to innovate, <br /> continuously learn, and productively change. As markets fragment, <br /> technology accelerates, and competition comes from unexpected places, <br /> learning, creativity, and adaptation have become the principal sources of <br /> competitive advantage in many industries. Enabling constant innovation <br /> needs to become the goal of all organizations committed to prospering. <br /> • Similarly, the goal for metropolitan areas must be to foster innovation and <br /> adaptation - in infrastructure, in institutions both public and private, and on <br /> the part of individuals. <br /> These efforts need to be proactive and designed for the long term. <br /> Government, civic, and business leaders need to challenge all economic <br /> sectors and institutions, including their own institutions of government, to <br /> become cultures of innovation. The consequences for any community that <br /> does not respond to this challenge are low productivity, stagnant living <br /> standards, and reduced opportunity for its citizens. <br /> Innovation and change mean uncertainty and disruption. But it is becoming <br /> increasingly clear that dynamism is critical to growth. (You can't have <br /> upward mobility if no one is on the move.) The more churning in a <br /> community in terms of new business start-ups and existing business <br /> changes, the faster the community's rate of economic growth. In fact, of all <br /> • of the indicators in this report, churn is the most strongly correlated with <br /> Strategic Plan for Economic Development Page 5 of 25 <br /> Final Draft— Ready for Release Subject to Council Approval and Adoption <br />