Wednesday, December 3, 2014

Developing Networks for Economic Growth

Companies exist within a wider context of information, finances, resources, and sociological networks that impact their long-term health. Successful companies can formalize and embrace this interconnected nature to develop enhanced levels of performance. They are semi-open systems that can take in information, transform it into something new, and contribute to their environment while ensuring they are retaining healthy profit margins. 

Hubs are made of clusters of competencies  that make up the back bone of local human capital. They form when businesses with similarities work in tandem and share common characteristics. We can see how clusters are formed around competencies in science, entrepreneurship, art, manufacturing, or just about any other industry. 

Clusters have socialites who foster and push network creation. Socialites pass out cards, attend meetings, make phone calls, and connect resources and finances to create new things. They are the entrepreneurs and pro-social developers that use their networks to solve problems. Such individuals are capable of changing markets by putting the right people in touch with each other. 

Companies have something called bounded rationality. This is where people band together to form an entity that produces new products/services. They share similarities in knowledge, culture, and competencies bounded into a single business for financial gain. All companies have a level of bounded rationality where members think and act alike. 

Hubs exist within a regional, national, and global marketplace. They are places where resources are converted into innovative products. A hub is defined by the types of clusters/competencies it has within in ranks. Clusters work together to create a type of synergy that is unique to that particular hub and all the elements that come define it. 

The ease by which people act and interact with each other determines the success of hubs. This interaction can be defined by financial, knowledge, and social based goal directed behavior. Development of hubs requires a level of improvement in the ease and speed of transference. This is one reason why new technology can be a game changer. Strong hubs continually develop new knowledge, financial efficiencies, and production outputs.

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