SwampFox

How to Get Rich in Plato's City

Submitted by: John Warner on Oct 02, 2007 at 2:03 am Tagged with: Featured Articles, Miscellany Source:

The other day, I was meeting with my contact at one of the major Swamp Fox Anchor partners. We discussed that what we are trying to do is to create an ecosystem of educational institutions, entrepreneurial companies, and innovative vendors around this Anchor, in order to make the entire community more highly productive. The partner said their company did not have a tradition of looking outside for ideas, feeling like they could do most things themselves.

I acknowledged that they could, but they will be more productive if they focus on what is critical to solving their customers most difficult problems, and then outsource other less critical activities to others. By focusing and becoming specialized, these vendors can become much more productive than the Anchor doing these less critical activities, because the Anchor will never give them the same level of focus.

I've had similiar conversations in the past with economic developers who focus on creating industry clusters. In particular, the folks from New Carolina are executing a play book written by Michael Porter, the Harvard Professor who is a worldwide authority on regional economic development and bases his recommendations on developing deep industry clusters. I remember one specific conversation where we got all caught up in our socks about whether or not wealth is created any time you trade with anyone else, or whether wealth can only be created when you trade outside your region.

In particular, we discussed whether the Greenville Hospital System can create wealth if it focuses on increasing the level of specialization of health care professionals in the local community around it. Does the GHS medical community specializing create wealth in Greenville if all the patients are from Greenville, or is that a zero sum game for Greenville as a whole, taking money out of one pocket and putting it in another? How about if some patients are from Anderson? How about Georgia? What if they are from a really foreign place like San Francisco? Some people seem to think that GHS's ability to create wealth depends on what political jurisdiction the patient lives in.

You know what, we're making all of this entirely too complicated and confusing ourselves. It is an ancient idea that communities exist because we are all better off when we work together than we are if we try to do everything ourselves. In fact Plato talked about it in The Republic. So I put together a simple demonstration of the power of Plato's City.

There you go. I'd really like to know what you think.

For my friends at the Diversity Leadership Academy, this also happens to be a great illustration that diversity is a beautiful thing when properly managed. DLA is a terrific program I highly recommend.

And oh by the way, you don't have to trade with someone half way around the world to create wealth. That's a good thing, because the Athenians didn't have to trade with the Spartans, who they couldn't get along with, in order to be better off.

You can get rich solving problems your next door neighbors have. You don't get any richer if the person whose problem you solve happens to live on the other side of some imaginary political boundary. Of course if you and your neighbors all work together and each of you gets very good at a particular part of a problem that a lot of people have, together you become more highly productive and globally competitive. You can then sell your solution to a lot of people around the world, and you can all get very rich.

That's all Michael Porter is really saying. And Plato said it 2,400 years before Porter did.