Did you know this? Franchising begun by Ben Franklin in Charleston

Franchising was begun in 1731 by Benjamin Franklin (why does that not surprise me), who licensed his Philadelphia printing business to his journeyman Thomas Whitmarsh as his printing partner in South Carolina. Franklin buys the printing press and types in return for 1/3 of the profits over a six-year term — in effect becoming a printing franchiser.

Is the world flat or spiky?

Richard Florida takes on Tom Friedman's analogy that The World Is Flat, arguing instead that The World Is Spiky.

Friedman's analogy of a flat world is that barriers to commerce are dropping globally - thus The World Is Flat. Florida makes Friedman's point several times in the article, for example, "leading city-regions—London, New York, Paris, Tokyo, Hong Kong, Singapore, Chicago, Los Angeles, and San Francisco among them—that are strongly connected to one another." Florida's point is that free flowing commerce does not mean commerce will flow everywhere evenly, but rather that commerce will freely flow to the areas that are distinctive in some dimension.

Clayton Christensen argues that the people that make the money are those focused on the constraint at any given point in the life cycle of a product or industry. Early on, when technologies are immature, those that can integrate components together and make the product work make the money. (Thus, because BMW is a performance leader and pushing the envelope in cars, the focus of ICAR is systems integration inside the automobile.) Late in the life cycle of a product, when components are standard and mature, winners are those that can cost efficiently assemble end products and distribute them to end consumers. (Think ScanSource).

Geoffrey Moore has a great observation: "[In marketing] there is one fundamental key to success: When most people think of positioning … they are thinking about how to make their products easier to sell. But the correct goal is to make them easier to buy. The goal of positioning is to create a space inside the customer's head called "best buy for this type of situation" and to attain sole, undisputed occupancy of that space."

Regardless of whether the analogy is that the world is flat, that commerce flows freely, or that the world is spiky, that free flowing commerce settles in areas that have distinctive competence, the question for us as a community is to identify where we are a ""best buy for this type of situation" and what we have to do "to attain sole, undisputed occupancy of that space."

School Dropouts

I received the following email describing a study of high school dropouts from Phil Noble, Executive Director of the SC Democratic Leadership Council.

The SCDLC's suggestion about what our reaction to this study should be is at the bottom of his email.

I'd love you know your what you think our reaction should be.

School Dropouts

A Startling New Study – Effective Solutions

This is one of the most interesting studies I have seen in a long time. The Bill and Melinda Gates Foundation asked students why they dropped out – and they gave some unexpected answers.

South Carolina’s drop out rate is 50th in the country. We lose over 40% of our students.

The study has received a great deal of attention nationally, but we have heard virtually nothing in South Carolina. We need to change that.

This is not some egg head academic or ivory tower policy group study; this is an unvarnished look at why kids say they drop out (Spartanburg was included in the study) and more importantly, what we can do about it - today.

In many ways the findings are as optimistic and they are unexpected. The key finding is:

While some students drop out because of significant academic challenges, most dropouts are students who could have, and believe they could have, succeed in school.

88% had passing grades with 62% having a ‘Cs or better’ when they dropped out
70% were confident they could have graduated
69% said they were not motivated or inspired to work hard
66% would have worked harder if expectation had been higher
47% said a major reason they dropped out was classes were not interesting
38% said they had too much freedom and not enough rules

The good news in all this is that a large part of the problem is soluble without huge new expensive programs. The report cites numerous specific solutions that can be developed at the school level, by states and the national government.

A Change for South Carolina RIGHT NOW:
Raise school leaving age from 17 years old to 18

The first, and easiest solutions cited in the study is to raise the legal age at which kids can leave school. This is one thing that could be done right now by the South Carolina legislature to cut the drop out rate.

It does not require one new regulation, or one dollar in new revenue. All that is required is to change one little number – change 17 to 18. That, and a little leadership, is all that is required.

It’s Your Turn.

I strongly urge you to read and download the brief study, read the press accounts and then email your Representatives and Senators and tell them to make the change - and do it now.

If you thought the cheap labor of the Chinese was scary, just wait

China Venture Capital Forum 2006

April 7-8, 2006 Shenzhen, China

Start a New Chapter Through Reform and Innovation

The China Venture Capital Forum is an annual gathering in China that is the largest of its type in scale, the highest in level, and the deepest in discussion. It brings together experts and practitioners from the government sector, domestic and international venture capital institutions, private equity professionals, world-renowned financial institutions, and intermediaries to share their valuable experiences and insights. As an important platform for growth enterprises and venture capitalists, the Forum will facilitate the integration of industry and capital, and create a favorable environment for enterprises to improve their financing efficiency. During the conference, top venture capitalists from home and abroad will give special lectures on how to attract venture capital and how to improve the professional skills of venture capital managers. Over 1,000 participants are expected to attend.

Even orangutans excel in Communities of Innovation

I heard someone say recently that they didn't believe in this whole "cluster nonsense."

Good thing he didn't tell the orangutans in the forests of Sumatra and Borneo. An interesting Duke University study "found the biggest behavioral repertoires within sites that showed the most social contact, thus giving the animals the greatest opportunity to learn from one another."

That's amazing. Orangutan Communities of Innovation. Even for the monkeys, Sparks Will Fly!

Maybe we should have invited them to InnoVenture.

InnoVenture: 8 Days and Counting: Time To Register Today

InnoVenture 2006

See the Agenda
Over 100 innovation presentations and exhibits by corporations, universities, research labs, and emerging companies.

See Who's Coming
400 people from 175 organizations have already registered to attend.

Register Online Today.

It's not who you know. It's who knows you.

That is a very powerful concept that I first heard from Melvin Gravley, author of When Black & White Make Green. I find that I use that an idea lot in explaining what InnoVenture is about. The agenda is chock full of presentations by influential leaders of significant organizations.

The way to get the most out of InnoVenture is to think carefully about what you want to accomplish, and then make sure you touch base with the people that can help make that happen. Your objective at InnoVenture is not just to know them, but to make sure that they know you, so they take your call in the following week and set up a meeting to further explore how you can work together in your mutual self interest.

When you leave with influential people knowing you, InnoVenture is a powerful event that can help propel you and your organization forward.

Sparks will Fly! September 29th and 29th in Greenville.

Register to attend InnoVenture today.

A Sign of Progress

I teach a module of a Fundamentals of Economic Development school twice a year for the South Carolina Economic Developers Association (SCEDA). The school is organized by Bill Workman, and another lecturer is Hal Johnson, CEO of the Upstate Alliance and this year's chairman of SCEDA.

The module I teach is on creating an innovative and productive economy. Last summer, Hal and I talked at the SCEDA school, and he was frustrated that traditional economic developers had not been included in creating the New Carolina: SC's Council on Competitiveness plan for a more innovative economy. Hal was really, really frustrated. And I knew others in the traditional economic development community felt shut out of the New Carolina process too.

We don't have two economic development strategies in this state: a new one and an old one... or a rural on and an urban one... or an affluent one and a poor one... or a black one and an white one. We have one strategy, and we need everyone involved in economic development on the same page as to what that strategy is.

So around Labor Day, I began holding meetings in my office every other week with George Fletcher, Executive Director of New Carolina, Hal Johnson, Bill Workman, and Irv Welling, a founder of the Upstate Alliance. The goal was to build relationships and discuss how to leverage the assets of both New Carolina and the traditional economic development community to get both on the same wavelength.

This week Hal Johnson was appointed to be a Director in New Carolina. That is an incredible sign of progress in the state, and a real testament to the leadership of George Fletcher and Hal Johnson.

Will The Greenville School District Promote Internet Based Education?

The Greenville News reported today that:

The Greenville County School District's construction program will run out of money next month, likely forcing the sale of another $60 million in bonds to finish the job and pushing the total close to the $1 billion mark, officials said Tuesday.

Another article a reported on plans for Internet based education. (Unfortunately it's not available online.)

A bill introduced last year by Rep. Rex Rice... would set up a statewide virtual charter school district, supported by tax dollars but not run by the Department of Education... Now we see a curriculum that is very suitable, especially for science, for use in elementary through middle school. Such programs can allow students to interact with a teacher at a remote location, or they can be largely text driven. Among the advantages is the capability of parents to check and see what their kids are learning on a daily basis. A parent doesn't have to wait nine weeks for a report card to know how their youngster is doing.

Note that this is a discontinuous innovation that leverages the inherent advantages of the new technology to create an entirely new model for delivering education. It does not require the expensive brick and mortal of traditional schools. And it brings distinctive value to new market, that it is provides real time feedback to students and their parents regarding the students' progress. In fact, if successful this model would make much of the status quo method of delivering education obsolete.

The article goes on to note:

... The Greenville County School District is in the planning stages of developing a virtual high school. It would be aimed mainly at giving students a chance to take courses they couldn't get at their own school or allowing them to continue their studies if they aren't able to be in school.

Note that in order to protect their $1 billion investment, the Greenville County School District is planning only a incremental innovation. Their vision is that education is still delivered in a brick and mortar school, and the Internet in only used to supplement the status quo. The last thing the Greenville County School District is likely to do is to create a new model that will render the $1 billion investment in schools obsolete. How would they ever explain that to the taxpayers that funded their spending?

Perhaps more clearly that anything I have seen lately, this illustrates why there needs to be schools independent of the current school districts to bring truly innovative education to students. This is not a question of whether the Greenville County School District is run by smart people and has motived teachers and parents, or whether their heart is in the right place is attempting to serve the students of Greenville County. The Greenville County School District is trapped by The Innovator's Dilemma, as is any market leading organization faced with a discontinuous innovation. The solution to the Innovator's Dilemma is to allow new entities to bring discontinuous innovations to market that will make the status quo obsolete, something like "a statewide virtual charter school district, supported by tax dollars but not run by the Department of Education."

InnoVenture: 15 Days and Counting: Time To Register Today

InnoVenture 2006

Over 100 innovation presentations and exhibits by corporations, universities, research labs, and emerging companies, all there to see if there is a way they can do business with you.

Register today.

A fascinating article on organizing a distribution channel: churches around the world

As every successful entrepreneur knows, creating an effective supply chain and distribution channel is as important to selling a product as the product itself.

Recently I came upon a very fascinating article: The Cellular Church, by Malcolm Gladwell (author of Blinkand The Tipping Point.)

Here's a couple of excerpts, but you'll appreciate reading the whole thing.

In the past twenty years, as the enthusiasm for publicly supported welfare has waned, churches have quietly and steadily stepped in to fill the gaps. And who are the churchgoers donating all that time and money? People in small groups. Membership in a small group is a better predictor of whether people volunteer or give money than how often they attend church, whether they pray, whether they've had a deep religious experience, or whether they were raised in a Christian home. Social action is not a consequence of belief, in other words. I don't give because I believe in religious charity. I give because I belong to a social structure that enforces an ethic of giving. "Small groups are networks," the Princeton sociologist Robert Wuthnow, who has studied the phenomenon closely, says. "They create bonds among people. Expose people to needs, provide opportunities for volunteering, and put people in harm's way of being asked to volunteer. That's not to say that being there for worship is not important. But, even in earlier research, I was finding that if people say all the right things about being a believer but aren't involved in some kind of physical social setting that generates interaction, they are just not as likely to volunteer.

At the very end, he makes the following observation about solving the world's problems.

There is only one thing big enough to handle the world's problems, and that is the millions and millions of churches spread out around the world," he says. "I can take you to thousands of villages where they don't have a school. They don't have a grocery store, don't have a fire department. But they have a church. They have a pastor. They have volunteers. The problem today is distribution. In the tsunami, millions of dollars of foodstuffs piled up on the shores and people couldn't get it into the places that needed it, because they didn't have a network. Well, the biggest distribution network in the world is local churches. There are millions of them, far more than all the franchises in the world. Put together, they could be a force for good.

As we think about creating a more innovative and entrepreneurial economy, we need to think about what the cellular distribution channel for that might be.

Any thoughts?

One of the pioneers in the PC industry was located in SC. Did you know that?

The Swamp Fox feature article, Where is a multi-billion dollar company likely to come from? prompted an interestng discussion with a reader. He commented:

Right here in SC, we had an early PC company which was, until 1980, larger than Apple. The founders went on to produce the first successfull IBM AT clone, and sold it direct to businesses.

Here's the discussion with the details.

A Nobel Prize Winner From A SC High School. Did you know that?

The discussion with a reader about the Swamp Fox feature article, Where is a multi-billion dollar company likely to come from?, produced an interesting nugget.

Kary Mullis attended Dreher High School in Columbia, graduated from Georgia Tech and went on to earn a doctorate at the University of California at Berkeley. He won a Nobel Prize in Chemistry in 1993 for contributions to the developments of methods within DNA based chemistry.

Source: America's Most Livable, Columbia, SC

Autobiography from NobelPrize.org

Why do we need to innovate? Any more questions?

Since World War II, manufacturing employment in the United States has declined significantly and service jobs have grown.



Declines in manufacturing employment have been due primarily to productivity increases, analogous to productivity improvement and employment declines in agriculture in the past century.


Source: The International Dimension. Changing Flows of Production, Trade, and Skills, Bill Ward - Director, Center for International Trade, Clemson University, October 21, 2005

Manufacturing employment declines due to productivity have been a global phenomena, with the largest manufacturing job losses occurring in Asia.


Source: The International Dimension. Changing Flows of Production, Trade, and Skills, Bill Ward - Director, Center for International Trade, Clemson University, October 21, 2005

The percentage of employment in South Carolina in manufacturing is greater than the country as a whole, so South Carolina has been and is likely to continue to be impacted disproportionately. We'll stay behind the eight ball... unless we develop a more innovative and diversified economy. Any questions?

Over 110 organizations presenting or exihibiting at InnoVenture 2006

The agenda for InnoVenture 2006 is packed with over 110 organizations participating in presentations on Creating Communities of Innovation, or in a CIO Roundtable, or in an Innovation Hall with 50,000 square feet of exhibits, or in presentations by emerging companies and investors.

Sparks will fly! at InnoVenture, but you can't catch any if you're not there.

Register today to attend.

Swamp Fox on SC Business Review each Monday

The South Carolina Business Review, with host Mike Switzer, is a 5-minute capsule of business features, news, and interviews from South Carolina's public companies and business leaders. The program airs on most South Carolina public radio stations Monday through Friday at 7:51 a.m., right after Morning Edition and before the Radio Reader.

I recently received the following note from Mike:

John,

I really think your web site and your newsletter provides about the best source of SC business news in our state. Would you like to be featured once a week on my show?

Thanks,

Mike Switzer, Host/Producer, South Carolina Business Review

That's very nice, so that's what we're going to do. Each Monday, Mike will broadcast an interview with me about the items that week on Swamp Fox: News of the Southeastern Innovation Corridor.

So tune into the South Carolina Business Review each weekday at 7:51 am on South Carolina public radio, especially on Mondays.