Page 243 - Sustainable Cities and Communities Design Handbook

The Next Economics: CiviceSocial Capitalism Chapter j 11 217

From an economic perspective, the strategic driving force of civic capi-
talism is to increase cooperation not competition.
The premise is that since full and legitimate price competition in electricity
is not possible, and indeed its pursuit is catastrophic, the alternative is to
structure multiple options for cooperative solutions to the energy problem of
how to deliver the best electrical services to the population with the lowest
possible cost. In a particularly interesting article, Henrik Lund contrasted the
conflict model of energy policy to a “democratic” model that involved broad
public participation in decisions to reduce fossil fuel dependence and innovate
with renewable and conservation alternatives in Denmark. This country is the
world leader in innovative solutions to the energy crisis without focusing
solely on getting firms to compete on short-term prices.
The vitality of cooperation and collaboration among firms is highly valued
in studies of economic success, for example, Saxenian’s study (1994) of the
conditions leading to the ascendance of Silicon Valley over Boston Route
128 in microelectronic technology. She showed that the networking and
interaction among competitors in Silicon Valley gave these high-tech com-
panies a competitive edge. One high-tech entrepreneur from Silicon Valley, for
example, made a fortune in the doy.com/information technology industry, but
then turned his attention to sustainable environmental companies. He has
formed networks and raised capital for such firms.
In addition, firms in many industries have collaborated to find solutions to
major technical problems that affect the whole industry. In electricity, the
Energy Producers Research Institute (EPRI) model is an example of how the
utilities have contributed the funds necessary to do fundamental research on
power plant design, maintenance, operations, modeling, and many other
factors. Deregulation and competition have led to serious cuts (over 33% since
the mid-1990s) in funding and programs at EPRI because the new market
players have no incentive to look to long-term collaborations and financial
participation in programs to research, develop, and deploy new advanced
technologies.
Finally, the potential of cooperation is seen in building regional networks
of firms that can take advantage of specialized infrastructure and supplier
industries, becoming a type of regional node. This type of industrial concen-
tration that gives individual firms competitive advantage has been called an
industrial cluster by Bradshaw, King, and Wahlstrom. The cluster concept has
been used in other less specific ways by Porter and others, but what is
important is that research is showing that industries concentrate in certain
areas and that this gives them an advantage. This economic advantage is one
that increases the economic value of each of the firms in the region.
The California State Assembly took the lead in understanding and seeing
the need for regional public policy. Under Speaker Robert Hertzberg and then
continuing under Herb Wesson, the state issued a report recognizing the
realities of the its diversity in both cultural and physical make-up. Guided by a