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Economic Development Strategies in a New Economy <br /> Times have changed, and with them so has the underlyin on c <br /> structure in which we all live. This new economy require=' ith <br /> inking <br /> by our leadership, new ways of solving problems and coll <br /> sometimes unexpected partners. In the new economy, the ticket to faster <br /> and broader income growth is innovation. This economy puts a premium on <br /> what the Nobel laureate in economics Douglas North calls "adaptive <br /> efficiency," which refers to the ability of institutions to innovate, continuously <br /> learn, and productively change. As markets fragment, technology <br /> accelerates, and competition comes from unexpected places, learning, <br /> creativity, and adaptation have become the principal sources of competitive <br /> advantage in many industries. Enabling constant innovation needs to become <br /> the goal of all organizations committed to prospering. Similarly, the goal for <br /> metropolitan areas must be to foster innovation and adaptation - in <br /> infrastructure, in institutions both public and private, and on the part of <br /> 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 GKe S <br /> community in terms of new business start-ups and existing business#�tarzs'; <br /> the faster the community's rate of economic growth. In fact, of all of the <br /> indicators in this report, churn is the most strongly correlated with <br /> employment and income growth. This means that communities need to <br /> promote change and innovation, not retard it. <br /> Strategic Plan for Economic Development Page 5 of 23 <br /> Draft—Subject to Approval and Adoption <br />