Rethinking Competition in a Local Living Networked Economy

As more communities move toward a vision of local living networked economies, the whole conversation about the nature and value of competition comes into question.

The invitation for local living networked economies emerges from commitment to the profoundly provocative and transformational question: What can we do together that we can't do alone?

Competition is one form of network connection on a continuum of possible connections. On the other side of the continuum is collaboration and in between are co-opetition, niching, and complementarity connections.

In competition, we�re committed to the eat-or-be-eaten demise of other market providers. In co-opetition, we team up with a competitor on a project or offering that serves us mutually, agreeing to compete on everything else. In niching, we serve or create a market segment that is under-served or under-satisfied. In complementarity, we provide other providers with value that helps them, succeed and grow. In collaboration, we�re committed to sharing market share with other providers and team up with them regularly for mutual growth of our respective businesses, the local market footprint, and growing non-local markets and business.

In a community where there is a thriving bicycle market, any combination of these five connections can occur among the bicycle shops in business there. The character of this dynamic market ecology of providers has endless possibilities.

Shop A is committed to a competitive connection with some or all of the other shops, doing everything it can to weaken or eliminate them from the market. Shop B is committed to growing new niches in the bicycle market, through the innovation of alternative energy powered products.

Shop C used to be a full-service shop but has recently strategically committed to being the prime supplier of tires for any of the other shops who agree to their sourcing. Shop D openly competes with shops A and E, and at the same time is committed to selective co-opetition with them in the shared reduction of health care costs with shared plans and joint marketing efforts to grow the local footprint of the adult market, since only 20% of this market ride bicycles on a regular basis.

Shops E and B have recently collaborated on a very successful regional bicycle marathon event partnering with local arts and culture organizations for the event. Shops B and C team up to share professional services, and use the cost savings to collaborate on price reductions and savings for their respective customers.

Each of these 5 fundamental market provider connections has potential value to create a provider network for the community that gives the community products and services that are increasingly: convenient, affordable, locally-relevant, market-diversity responsive, quality service, innovative, adaptable, proactive, and promotive of a local living economy.

The community has the opposite of these when the provider network ecology is dominated by competitive connections.

The competitive connection is the simple commitment to weaken or eliminate other providers in a community's market. If the provider network is weak, meaning it lacks a healthy mix of the other 4 kinds of market connections, dominance will occur and providers - and their local suppliers, employees, investors, and customers - will all lose as the cost of one dominant monopolistic supplier's gain. This can happen as well when two suppliers team up their resources and position to triangulate the rest of the market into failure.

The market loses everything in a monopoly of providers: choice, affordability, convenience, quality service, incentive for innovation, and the rest.

Creating thriving ecologies of market provider networks means engaging our assets with a commitment to foster, nurture, and reward a healthy mix of provider connections in any local community market. This is the job of network weavers, regardless of whether they act independently, as grass-roots organizers, as members of institutions, or as market provider members.

This approach is not only pragmatic, it is also possible, and begins with two simple steps: introducing the language of the competition-collaboration continuum and inviting people into new conversations that make them more possible.

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