by Dean Whittaker

Smart companies lead in their fields through innovation. They use technology and knowledge to stay competitive in a global economy. The benefit to attracting and keeping these companies is that they add more value per employee, and therefore pay a higher-than-average wage than other industries, creating more wealth in the community.

But economic development organizations have to be smart to catch and keep them.

First, you need to be aware that there is risk associated with focusing on these firms. They tend to be more volatile in their employment levels and easily impacted by newer technology. Success depends upon their continuous innovation – they must be quick and nimble to avoid falling behind in their fields. Their competitive advantage is often difficult to protect and their product or service often has a very short life cycle. Economic developers must recognize that these companies embrace innovation as a way of life.

You may think you need to live in Silicon Valley or Route 128 in Boston to attract and keep innovative companies. But the first place to look is your own backyard. Innovation occurs everywhere, and most companies grow where they are planted – often where the founder lives – if the climate and culture are right. Part of the issue is access to capital. Does your area provide a source of seed capital and venture funding, and does it support risk-taking.even after frequent failures? If innovative start-ups don’t have the support they need to grow, they die on the vine.

Smart companies also need a supply of smart people. Attracting and keeping talent is paramount to the future of any community, and keeping local talent is easier than recruiting outsiders. While you may argue that keeping young people in small communities is not likely to happen, time may be on your side. When those same graduates get married and begin to have families, the security, safety, and proximity to family are strong motivators to come back to their hometowns. Staying in touch over the years through community newsletters and recruiting beginning at ten-year class reunions can begin the process.

Quality of life and environment are also tickets to attracting innovators. Right-brained innovators enjoy cultural variety and proximity to nature. Innovative thoughts often appear when we are engaged in doing something else, especially when we are close to nature or in a “creative” space. What make a place creative? A quiet walk along the beach or river can allow our brains to slip into the “gap” where these ideas lurk. Seeing other innovators – artists, musicians, writers – at work can spark our own creative ideas.

What else do smart companies need to succeed and prosper? A strong infrastructure of communication, travel and available capital are important assets. But your real task is to create your own center of excellence based upon an inventory of what your area produces, what it offers, and the smarts required to help it succeed.