A supplemental reading list for economic development innovators

My good friend Darrin Wasniewski, who leads the Wisconsin Main Street program, sent Ed Morrison and I a tweet Friday asking us for recommendations for good books for economic development types. Ed, in his typical masterly fashion, had this list already prepared — and it’s got some goodies on it.

As I’ve written elsewhere, one of the biggest challenges facing people who work on — or touch — economic and community development issues is that the world changed around us, and it’s still changing, and we need to figure out both where we are now and where we may or may not be going — and we need a new toolkit, right down to the way we think and understand and make decisions, if we’re going to be able to ride this wave.

With that in mind, here’s some books that I would add to Ed’s list:

Rise of the Entrepreneurial State, by Peter Eisigner. This is a relatively old book — published in 1988 — but it does a better job than anything else I can think of with regard to unpacking and elucidating the differences between traditional supply-side economic growth approaches and the more proactive demand-side model. It’s been more than 15 years since I read this, and I still find its premises foundational, even if you have to be a little careful taking the 1980s examples as completely contemporary. It’s an academic book, so not a light read, but worth the effort. Plus, bonus for Darrin — it was published by University of Wisconsin Press!

Locavesting, by Amy Cortese. Ed’s list includes several books about the maker revolution, the power of local markets, entrepreneurship, etc. Locavesting is one of very few sources that I have encountered that outlines how the forces that enable local markets — social media reach, micro-making, etc. — can also be used to catalyze meaningful economic growth by using crowdfunding to fill the gaps in funding options that banks and conventional economic development organizations don’t fill. The author is a journalist, so a relatively direct and information-loaded work, pretty accessible and not academic.

The only caveat is that the book was written shortly after a federal law enabling crowdfunded investing came into being, and if you’ve dealt with the travails and bureaucratic ugliness surrounding this issue since that time, you will read many of the examples more ruefully than was intended. But it’s the best overview out there of all of the possible ways crowdfunding can be used, and I do strongly believe it will become part of the normal course of events all over, eventually. It’s just taking a lot longer in some places than we expected it to in 2012.

The Local Economy Revolution: What’s Changed and How You Can Help.By…uh… me. I would normally think it’s a little tacky to list your own book in a reading list for others, unless it’s a class syllabus or something, but I’m putting it here for a simple reason:

I wrote it because I could see deep changes, crucial changes, developing that threatened to have an incredibly profound impact on how we do economic development and a whole range of the other work that touches communities, and… I could find bits and pieces in other books, but not the whole picture the way I thought people who deal with communities needed to be thinking about it. Plus, a lot of what I could find was written in academic, or business-y, or generally dry and boring verbage. I wanted something that people would read and grapple with, not just because it said things that they needed, but because it said things that people needed in a manner that was actually enjoyable to read. Based on what reviews it has gotten, I think it does both of those.

AntiFragile, by Nicholas Nassim Taleb. I have mixed feelings about this one — Taleb’s writing voice is very personal, but the person who comes across struck me as arrogant and prickly. And in some places it felt to me like it bogged down in the examples. But Taleb’s re-framing of what risk actually is — and his analysis of structures like those that economic developers typically use as “fragile,” and thus prone to unpredictable cataclysmic breaks — should be a core lesson for anyone who deals in policy and strategy-setting. Taleb’s alternative — strategies that hedge bets and mitigate risks — are a little harder to translate into economic development work, but I think we need to figure out how to do that. We just haven’t fully developed it yet.

The New Capitalist Manifesto, by Umair Hacque. Hacque is one of my favorite contemporary writers — his writing voice is so clear, so personal, so powerful, that it’s just a plain delight to read, despite the pretty deep topic. The title’s radical-ness is a bit tongue in cheek, because what Hacque does is examine some of the profound changes in how the most successful businesses have worked over the past 10 years, and demonstrates how their successes reflect core, foundational shifts in what it takes for a business to operate successfully. It’s related in that respect to books like Agile Innovation and Start-Up communities, but it’s not just a case of someone telling you cool stories. New Capitalist Manifesto, and its follow-up,Betterness, are the kinds of works that take apart those stories and guide you through the deep structure of why and how they actually work. You won’t look at the economy around you the same way when you’re done.

The last two books that I’m going to recommend aren’t typical economic development books — they’re books about the decision-making strategies and failures that seem to get us into trouble, in economic development and in other kinds of work. As I spent several pages on in the first part of my book, a lot of what gets us in trouble is that we make decisions about our communities by basically the same seat-of-the-pants methods that we learned as kids. And that means that we very often set ourselves up for failure.

My total favorite book on this topic has the highly poetic name of The Logic of Failure: Recognizing and Avoiding Error in Complex Situations. The author’s name is Dietrich Dorner, and it was originally published in German in 1989. Despite the title and the fact that the author is a psychology researcher, the book is a surprisingly accessible read, and the very concrete examples he uses (several of which involve simulations of economic development policy decisions!) will open your eyes to the decision-making shortcuts that we (and our organizations, and our communities) often make, and that lead to many of our failures. I have never seen this one on anyone else’s reading list, but I can no longer imagine thinking about decision-making without it.

The last one is Nate Silver’s The Signal and the Noise. I am only about a sixth of the way through that one, but it’s holding out some hope of being as illuminating as Dorner’s book.

One final thought: one of the challenges of books is that they take a long time to produce, and they’re fundamentally static— It’s hard to change them once they are published. A lot of what I am seeing and dealing with in economic development and related fields these days is so fluid as to verge on amorphous. I think books remain crucial for the kinds of paradigm-shifting, deep analysis, big thinking that we urgently need to do in an era of such fluid change, but I’m more acutely aware now more than ever of a book’s limitations, as I continue to work on a couple of new ones of my own.

We have lots of book clubs. Has anyone ever had a blog club, or a tweet club, where the members share the truly bleeding-edge ideas that haven’t found their way into longform yet? If you have, please let me know. I’m curious.

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