What can we learn from a world-class economist? Invest in kids and entrepreneurs| CivicCon

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World-renowned economist John List can speak to you about inflation, interest rates, global financial trends and the pillars of entrepreneurial success.

He can also speak about how early childhood education changes the trajectory of children in disadvantaged communities and how organizations can take good ideas, make them great and scale them up to create measurable change in schools, neighborhoods, workplaces and society at large.

At a free CivicCon event Aug. 14 in Pensacola, List will speak about all of the above.

List is the Kenneth C. Griffin distinguished service professor in economics at the University of Chicago and holds the appointment of distinguished professor of economics at the Australian National University.

He's been elected to the American Academy of Arts and Sciences; ranked among the most world's influential economists by RePEc, a collaborative of hundreds of volunteers in 102 countries working to disseminate research in economics and related sciences; and served as a senior economist for former President George W. Bush's administration in 2002 and 2003.

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List's research focuses on how economic theories apply in the real world, and over decades, his studies have touched on everything from the factors that influence charitable giving, to the gender pay gap in the gig economy, to the driving forces in the sports trading card market.

At CivicCon, List will talk about some of the big lessons from his research and how cities and communities can use them to grow and prosper.

"The first half will have some theories about regional growth, about agglomeration  — what's the value of attracting a million dollar plant in terms of that attracting more (companies) — and I'll have some facts like that," List said of the upcoming event. "But then I'll move more to (social concerns), you know, 'We have education (gaps), we need affordable housing. John, can you help us think about developing programs in those spaces that can scale?' and I think that's where my book is really applicable, to those types of questions."

List's new best-selling book, "The Voltage Effect," is about "the science of scaling: why some ideas fail while others change the world, and how to give every idea its best chance at success." The book notes success and failure are not about luck, and there is a rhyme and reason to why some ideas fail and others make it big."

Economist John List talks Feb. 14, 2017, at Blue Wahoos stadium in Pensacola about an early learning pilot study.
Economist John List talks Feb. 14, 2017, at Blue Wahoos stadium in Pensacola about an early learning pilot study.

List is uniquely suited to tackle the topic because unlike many economists, his specialty is applying economic theory to everyday life. One of his notable projects was helping to launch a preschool in a disadvantaged Chicago suburb as part of a four-year study on how parental involvement in early education impacts a child's future success. The study is ongoing because those children are still growing, but it appears to be showing positive results.

He also worked with Chrysler to study if using financial incentives to get employees to engage in healthy activities would ultimate save the company money on medical expenses and sick leave. After showing initial promise, that program failed to move the needle.

Experiments like these all helped List identify five "vital signs" that indicate whether an idea can scale and the four economic behaviors that it's critical to get right for an idea to succeed at scale.

List said at CivicCon, "I'm going to have some policy prescriptions, and I think we should be holding our local politicians' feet to the fire and making sure that they're scaling ideas that actually have a chance to work. And I think as a society, we don't do that enough."

One piece of advice he offers communities is that they should be investing heavily in their business owners and in their children. List emphasized the need to create a communal "culture of creativity," noting that people tend to create and invest in the places where they grow up.

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In terms of setting community priorities, he recommended, "For the short run, I want to do entrepreneurism and I want to create a culture of entrepreneurs. For the long run, I want to double down on early education and make sure that our kids are all getting the best shot, because there's way too much wasted opportunity and wasted potential in our youth. These are kids who could be the next innovator of cellphones or (virtual reality) or (artificial intelligence) and communities around the world just aren't giving their kids a chance."

List said another important takeaway from his work is the stark difference in how private companies invest their time and resources versus how governments do. His field research has led to collaborative work with several different schools, nonprofits and governments, as well as with private companies including Lyft, Uber, United Airlines, Virgin Airlines, Humana, Sears, Kmart, Facebook, Google, General Motors, Tinder, Citadel, Walmart and many others.

He said companies think about cost and efficiency in everything they do — because they go bankrupt if they don't.

"The Voltage Effect" by economist John List highlights strategies organizations and individuals can use to make good ideas great and make great ideas scale.
"The Voltage Effect" by economist John List highlights strategies organizations and individuals can use to make good ideas great and make great ideas scale.

"I think too many communities just run (a program) without having any evidence about the efficacy of the program, or who it's going to help," he said. "Very rarely do they appropriately explore in a pilot whether it's going to work. ... Governments need to act like private firms and they need to take the seriousness of data and the seriousness of data-driven decisions to heart. I think governments don't because they're monopolists that don't face competition."

List said he recommends that every new government policy and program have a sunset date built into it, meaning it expires automatically if officials don't take some step to continue it. He also recommended there should be policies mandating the continuous evaluation of new initiatives.

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He noted that when a government launches a program, "they don't test whether it's still working for a very, very long time or until they're called to the carpet. And by the time they realize it's not working, it's sort of too late because you have all these vested interests, because it's working for some people — some people are making money and some people are doing their thing, but it's not working for society. So, they should bring it back, but it's really hard to do that. In a firm, it's easy because we're going to go bankrupt if we don't stop doing this. But in a government, it's not like that. ... It's easier to stick with the status quo."

List said we can do better, and the Voltage Effect is a formula for how.

"In the past, scaling has been viewed as an art. I think scaling is science, and if you use scientific principles for scaling your ideas, our local communities will be better off," he said.

List's presentation will have more detail on the key concepts of "The Voltage Effect" and also some context on how small cities should be focusing their efforts in the current economy. The event will be 6-7:30 p.m. Sunday, Aug. 14, at The REX Theatre, 18 N. Palafox St. in Pensacola.

The event is free and open to all. Registration is available by searching "CivicCon" at eventbrite.com. Those who register will have the opportunity to submit a question for List.

The presentation will also be available via livestream at the Pensacola News Journal Facebook page and at pnj.com.

CivicCon is a partnership of the News Journal and the Studer Community Institute to empower communities to become better places to live, grow, work and invest through smart planning and civic conversations.

For more information, visit pnj.com/civiccon.

This article originally appeared on Pensacola News Journal: CivicCon: Economist John List will discuss growth, scaling good ideas