There is one current subject of hype that I suspect is also a megatrend. That is "disruption".
First analysed a few decades ago by the guru of innovation, Harvard scholar Clayton Christensen, the word "disruption" has only recently insinuated itself into common business conversations.
Disruption is not new. It is as old as capitalism itself. It was the core concept of that other, much earlier prophet of innovation, the Austrian born Joseph Schumpeter, who was himself "disrupting" mainstream economics nearly a century ago.
What are new, however, are both the relative ease of starting and scaling a business, even a global business, and the importance of new businesses to the local and national economies.
It is an astonishing fact that 40 per cent of American GDP is dependent on companies that did not exist 15 short years ago. Our economic fortunes globally are increasingly in the hands of young companies.
Disruption is both threat and promise. How does a regional economy adjust to a world of hyper disruption?
There are many things we in Hawke's Bay could be doing, and one of them is to continue the task of - jargon alert here - building an "entrepreneurial ecosystem". Perhaps not an immediate vote winner for our elected representatives, but core business for us all nonetheless.
What on earth is an entrepreneurial ecosystem?
For my money, it is developing a visible and networked culture of support for start-up businesses, for people with ideas wanting to start a business, for those who are growing businesses, and for young people who don't yet know they are entrepreneurs.
And it is place-based. We can build this thing right here.
The sweet spot for economic development is the high growth business.
Another analyst has called this type of business the "high impact entrepreneur", the business start-up of towering ambition that is setting out to disrupt a big market segment in a global market and that has the skills and resources to do this.
Such a business is often technologically enabled to achieve rapid fire growth in non-local markets, but need not be in what we would think of as the "tech" sector. The high growth business is where the dream jobs, the locally based and high paying jobs, are to be found. These jobs in turn create lots of other local jobs right across the skills spectrum.
Hawke's Bay is well known to be a "SME" (small to medium business) economy. We have great businesses in global-impact sectors. We have a number of high growth firms which serve national and international markets.
But we need many more if we are to maintain our lifestyles in these highly disruptive times. And to create many more of these "higros" we need to lay the groundwork.
How to create and grow an entrepreneurial culture or ecosystem? There are several tasks, and each task has its own "to do" list.
First, we need to generate more start-ups.
We need a framework for identifying emerging entrepreneurs and supporting them towards starting businesses, especially young people who will be the future stars of the region's economy. This is, in effect, about growing the "pipeline" of entrepreneurs.
Pipeline development will involve actively promoting the entrepreneurial mindset in the community and among our young people. It is worth remembering that by 2025 75 per cent of the world's workforce will be millennials.
Maybe adding few words to explain it, that we need a framework to identify and get more entrepreneurs, promote entrepreneurship spirit/mindset (especially among young people).
Second, we need to lift the notoriously low survival rate of start-ups (not confined to our region), by ensuring they have access to the services and advice (and where appropriate, the capital) that they need.
And yes, many start-ups will still fail. These too will need support. And a start-up business failure does not mean you as an entrepreneur or a person are a "failure", if you know what I mean.
Failure is okay for entrepreneurs - a business start-up failure is merely a setback. And yes, many business ideas are going to go nowhere. Tough love may need to be administered.
Third, we need to produce more "scalable" start-ups, that is, high impact businesses taking on big problems and big competitors and winning in big markets.
We need to find those firms that are already growing. Then we need to support them in their quest for growth. And we need to turn start-ups that could scale up into the real thing.
Bear in mind that only about 6 per cent of start-ups generally become "scale-ups" (what the UK's innovation foundation Nesta refers to as "the vital 6 per cent"). They are gold and they must be looked after.
Why? Because these are the firms that will create the jobs of the future.
Fourth, we need to grow the entrepreneur/start-up community. Make it visible. Ensure it is networked. Link and leverage the bits of activity that are already going well.
And make sure that anyone with a good business idea can find a pathway to the resources he or she needs to take the next step. Low entry barriers make for great local economies.
There are many emerging conversations in the Bay on this subject. There will be a range of views as to what we do, and in what order.
Let the conversations continue and grow, and let's all roll up our sleeves to create a new and exciting Hawke's Bay economic environment for the next generation of business stars.
Lots of great things are under way. But, as always in dynamic market systems, there is little cause for complacency.
Growing entrepreneurial skills and systems is a great way of de-risking and future-proofing the region. If we don't, other regions certainly will.
Paul Collits is an economic development adviser at Central Hawke's Bay District and Napier City councils. He is also an Adjunct Professor at the University of the Sunshine Coast Business School. Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz.
