Capital Institute’s Science Advisor Sally Goerner Reflects on
REGENERATIVE ECONOMIC NETWORKS
I grew up in a time when Americans took pride in their ingenuity and know-how, a time when quality, integrity, and reputation counted, one in which your relationships with others in your industry and community were critical to both your industry’s health and your own income. While the corporatization of America has largely eliminated this type of truly free enterprise, I have since learned that the most innovative and powerful economic networks in the world follow the same principles. Found from northern Italy’s industrial network to California’s Silicon Valley, these economic engines are built of numerous small, high-quality firms linked by a natural pattern of cooperation and niche building.
Called “flexible manufacturing networks,” such networks achieve tremendous economies of scale not, as conventionally assumed, within the framework of huge organizations, but rather through large collections of small, symbiotic enterprises. Most have only 5 to 50 workers, with a few more having one or two hundred. Because they are small, cooperative, and still connected to one another, such enterprises also tend to produce very sophisticated and high quality work. Innovation is high because personal creativity is a central theme and because partnership and craftsmanship are still valued. Quality is high because people care about integrity as well as profit. Creativity is high because workers and ideas circulate. Such circulation builds expertise, breadth of experience, and an invisible chain of valued human connections.
Such webs tend to grow and develop because breakaway enterprises spring up easily and often, as workers trained by existing enterprises move out to start firms of their own while retaining the past connections. Such spin-offs often collaborate with the older establishments because they share history and have related work. In this way, people in the network establish their own “coherent role in the web of processes,” while members, information, and expertise cycle easily throughout. As a result, advances anywhere tend to stimulate benefits everywhere. Members prosper in a synergistic, not a zero-sum way.
Such networks exemplify regenerative economics’ central premise – that economic vitality is primarily a function of healthy human networks. They also clarify that healthy human networks consist of:
Called “flexible manufacturing networks,” such networks achieve tremendous economies of scale not, as conventionally assumed, within the framework of huge organizations, but rather through large collections of small, symbiotic enterprises. Most have only 5 to 50 workers, with a few more having one or two hundred. Because they are small, cooperative, and still connected to one another, such enterprises also tend to produce very sophisticated and high quality work. Innovation is high because personal creativity is a central theme and because partnership and craftsmanship are still valued. Quality is high because people care about integrity as well as profit. Creativity is high because workers and ideas circulate. Such circulation builds expertise, breadth of experience, and an invisible chain of valued human connections.
Such webs tend to grow and develop because breakaway enterprises spring up easily and often, as workers trained by existing enterprises move out to start firms of their own while retaining the past connections. Such spin-offs often collaborate with the older establishments because they share history and have related work. In this way, people in the network establish their own “coherent role in the web of processes,” while members, information, and expertise cycle easily throughout. As a result, advances anywhere tend to stimulate benefits everywhere. Members prosper in a synergistic, not a zero-sum way.
Such networks exemplify regenerative economics’ central premise – that economic vitality is primarily a function of healthy human networks. They also clarify that healthy human networks consist of:
- An intricate web of human expertise, material infrastructure, governing structures, financial flows, communication systems, learning systems, behavior patterns, and cultural systems…that have grown up together such that:
- All elements play mutually-supportive roles in maintaining the vitality of individuals and groups at all levels of the social, economic and environmental whole.
Capital Institute wants to test this regenerative economics framework is applicable in the real world. We are looking for confirmation that the most effective economic development is the kind that develops local know-how and ingenuity anchored in collections of small, mutually supportive enterprises.