Most people probably don’t think of Germany right away when they think of adaptability, but an article in the October 2012 Scientific American called “Why Germany Still Makes Things” reveals that at least some aspects of adaptable solutions are at work in Germany’s tenacity in maintaining a strong manufacturing sector in the face of globalization and hyper-cheap labor markets abroad. What emerges several times in the review of Germany’s success is the incremental and recursive nature of how Germany’s economy has adapted. For instance, it’s noted that Germany is leading the world in production of advanced textiles like carbon fiber. This strength didn’t appear out of nowhere, it wasn’t created from some Chancellor’s initiative to become a leader in carbon fiber. Rather it was an evolution into a new niche, emerging naturally from Germany’s previous strength in traditional textiles. As jobs and markets in those sectors moved to low wage markets in China and India, Germany retained the machinery and science behind textile manufacture and adapted it for higher end advanced products. Likewise, the symbiotic tech centers Germany has developed as partnerships between university scientists and industry aren’t created out of thin air or designed to chase what analysts predict will be the next hot technology—they simply focus on existing strengths, like automotive technology, and work to enhance those capabilities.
This reflects a core attribute of evolutionary systems. They don’t appear out of nowhere. They aren’t created in anticipation of some yet unknown future trend. They build off past successes using what they’ve done right before as a platform for reaching out into new niches, or ways of making a living.
I can’t help but think of successes and failures in this regard in my former home state of North Carolina. On the successful side, Research Triangle Park, located physically and intellectually right at the intersection of three lines drawn out from Duke University, University of North Carolina, and North Carolina State University, capitalized on the existing successes in biomedical research, social economics, and environmental research to become one of the most successful examples of economic development. But driving just a few miles from the glow of RTP, one travels through countryside awash in hollowed-out towns where furniture manufacturing once supported diverse and thriving main streets. Those jobs and dollars left North Carolina when furniture manufacture moved to cheaper labor markets, but civic leaders and the state government did little to stave off the exodus. They didn’t try to build off of the skills and strengths of those communities. Instead, scattered almost at random around the state, are the half-filled shells of various economic enhancement zones that tried to create concentrations of whole new economic enterprises out of thin air. These efforts wanted to copy the successfulness of RTP without focusing on what it was that made RTP successful.
These kind of economic schemes are always sold under a banner of that massively over-used word “innovation”. It’s as if you just wave the magic wand of innovation you can actually create something completely new, or pull development dollars out of a hat. But real innovation isn’t nearly so awesome. It’s just about finding a new way to use old parts to capitalize on new opportunities. One could say that flight was an amazing evolutionary innovation, but remember that birds are just feathered dinosaurs.
The lesson for economic development, from Germany and from nature, is not to innovate, but to work with what works, be hyper-vigilant about the first signs of change (especially the first cracks of decay), and be ready to steer what you have into a new direction.