Attorney Deborah Groban Olson will discuss efforts to combine local talent with intellectual property resources to create green businesses. Deborah is the executive director of Detroit's Center for Community-Based Enterprise, whose goal is to turn the city into a national model for locally-owned sustainable businesses. She also enjoys making maple syrup.
Deborah Groban Olson-Post 1: "Innovation Broker" Developing Detroit as Green Manufacturing Center
Posted By: Deborah Groban Olson
Posted: 3/19/2009
For over 100 years, Detroit successfully organized its life around the needs of several major global companies. The future of these companies, at least as local employers, is in grave doubt. Over those 100 years the world has changed. Today, in order for a local community to thrive in the global economy, it needs a clear strategy aimed at protecting the needs of local residents and locally rooted businesses, especially when those diverge from the needs of global companies.
Companies (particularly employee-owned ones) whose primary focus is on keeping local people employed are quick to change products or business strategies and slow to lay off employees. For example, from 2000 – 2008, Ohio lost 29% of its manufacturing jobs, yet the 24 manufacturing companies that were members of the Ohio Employee Owned Network, over the same period, lost only 1% of their jobs. (Ohio ESOP Survey – Kent State University).
Detroit needs to reinvent itself from its strengths: Detroit/southeast Michigan is the manufacturing technology capital of the world. We have 230 R&D centers for the auto OEMs and suppliers, which is the highest concentration of manufacturing technology knowledge anywhere. (J. Cleveland for MEDC, 2005) Even companies that manufacture overseas have technology design centers in southeast Michigan.
We have all become accustomed to the concept that today’s economy is a knowledge economy. Yet we do not eat, drink or wear knowledge; we are physical creatures surrounded by a built environment of things.
The new green economy needs a myriad of products that are highly engineered. As William McDonough & Braungart say in Cradle to Cradle, the future of green manufacturing is making things the way nature does, engineering them so that all parts can be recycled or reused, supporting instead of destroying the natural world. Doing this requires diverse knowledge, capacity, teamwork and imagination.
Ford and GM, together, hold approximately one-third of all green technology patents and related value. (Malackowski, Detroit News, 12-2-09). There is a huge amount of unused intellectual property in the auto industry. Historically, the auto industry has not licensed out technology that it invented but did not use. So long as gas was cheap in the US, there were not sufficient economic incentives for the auto companies to develop their green technology. Many valuable technologies they could not afford to put in cars languish on shelves in southeast Michigan.
Over the past 5 -10 years, hundreds of thousands of highly skilled manufacturing technology workers, including engineers, scientists, technicians and managers have been laid off or taken buyouts. There has been some brain drain from the region, but many of these people remain. They have—our region has—the knowledge and skill needed to invent, produce and market the new green products which the growing real and political climate change will demand.
The non-profit Center for Community Based Enterprise (C2BE) is focused on reorganizing our local smarts and skills for the benefit of local residents, locally rooted businesses and communities. We are organizing entrepreneurial resources that can be easily shared by the large numbers of skilled people here who know how to make complex things efficiently, but may lack some entrepreneurship skills or knowledge.
It is neither realistic nor efficient to push every talented engineer or craftsman through “entrepreneurship training”. Rather, such people should have an opportunity to participate in new or refocused businesses where they share their skills, take some entrepreneurial risk, and get the benefit of other people’s managerial, marketing, purchasing, intellectual property licensing, information technology, product design or other skills. C2BE is currently organizing a mission-driven sister company, Ingenuity US (IUS), as an Innovation Broker that will create and operate this new business model.
C2BE is an information and education resource that supports and connects entrepreneurs, community and resources to grow “community-based enterprises” (CBEs), which we define as companies that are: sustainable; locally rooted; intentionally structured to provide community benefit; and committed to paying living wages. C2BE is a membership organization that welcomes members and contributors; learn more at our website or contact Debbie Sullivan at dsullivan@c2be.org or (313) 331-7821.
Ingenuity US’ goal is to build a group of locally rooted, sustainable businesses, based on abundant underutilized resources of Detroit and southeast Michigan. It will create profit-making, sustainable, community-based or employee-owned enterprises by finding and developing business opportunities and initiating businesses with the region’s working people and inventors. Ingenuity US will foster cooperation between these businesses and existing local businesses, where possible and mutually beneficial. It will focus on proprietary products or on service businesses that inherently require and benefit local workers.
IUS will accomplish this by creating a capital structure unique to the United States, but practiced successfully in Europe (see, for example, Mondragon). This structure will retain at least half of the company’s profits in the company for reinvestment or to capitalize other community-based enterprises, which will follow the same model. This will create a pool of “patient capital” that is committed to using profit and reinvesting it to benefit local communities—unlike capital that is beholden to outside shareholders, venture capitalists or other non-productive stakeholders.
C2BE and IUS are actively looking for existing businesses interested in product diversification, skilled people interested in helping develop community-based businesses and investors who agree with our rooted capital structure. For more information, please contact Deborah Olson at dgolson@c2be.org or (313) 331-7821.