Anywhere you go – when you tell people that you live and work in Maine – almost always the reaction is “Ooooo – I LOVE Maine.” Chances are if you have been to Maine – let alone live here – you have a deep affinity for the place and people. Whether it is the picturesque pine lined coast, the perfect peeping foliage, powder laden mountains, the ridiculous amount of delicious cuisine or the quant draw of classic New England communities – there is a lot to love about this place.
What you may not know is that there is a frothy tidal pool of local government innovation seeping into tributaries of infrastructure, technology, policy and economic development that led to a State at truly a watershed moment. To that extent I am grateful to find myself navigating the frontiers of these territories as Fourth Economy takes on a growing role helping facilitate smart, connected, and resilient policies and practices throughout the State.
Having helped define and distill the City of Portland’s Innovation Agenda in 2018 – we now find ourselves helping The City of Lewiston develop a first of a kind Smart Infrastructure Strategy. As Lewiston seeks to leverage a significant housing and neighborhood transformation plan – the City seeks to establish a comprehensive smart city overlay of policy, infrastructure and operations. It is an exciting opportunity to work with civic innovators already investing in street light upgrades and advanced water meter networks.
Through the work with The State’s two largest cities – we are excited to be working with the Maine Technology Institute, GrowSmart Maine, and The Island Institute in the launching of a Smart Communities Maine a network of Maine municipalities, regional agencies, nonprofits, private companies, developers, and universities converging around the need to address smart infrastructure development opportunities at a regional scale. The aim of the initiative is to both develop local capacity to design place-based strategies that reflect community priorities to inform smart infrastructure investments, public policy, and economic development partnerships.
Due to these projects and partnerships we are proud to help support two unique events taking shape in June that contribute to the growing momentum across multiple sectors to foster smart, connected, innovative and resilient communities across Maine.
June 5-6 The Build Maine Conference hosted in Lewiston will be a unique opportunity to introduce cutting edge business practices and focused conversations with leaders in transportation planning, real estate development, and public service, demonstrating a breadth of knowledge we can apply locally.
June 20-21 The StartUp Maine Annual Conference will seek to align the robust Maine startup ecosystem with local government and policy innovators. I am proud to be producing a series of conversations around how smart and connected infrastructure is percolating in multiple sectors across the state.
January is an exciting month in many state capitals around the country. There are twenty new Governors being sworn in and starting to announce their teams. There are others who were re-elected and recognize that a second term provides a unique moment to be bold with their agendas. Soon, many will need to submit their first budget request and begin the shift from campaign rhetoric to actual programmatic and policy-driven agenda setting.
We have seen the good, the bad, and everything in between in how these leaders – well, LEAD. Some will seek to lead in a hands-on way, meeting with key constituents and helping to manage the daily agenda of the government. Others will choose to rely on the talented people they hire to carry out the vision.
Most are in agreement that the economy of their state – jobs for residents, happy employers, outsiders interested in moving in – are all important to their political futures. They recognize that a healthy economy makes the other tough issues they must deal with easier.
So how do they ensure economic success?
Think Beyond Transactions
It’s hard to argue against wanting the press release and the photo op with the big scissors or golden shovels. The announcement of an expansion, a new housing development for millennials, or a major infrastructure project, all attract interest and ‘show’ that things are getting done. I’ve seen too many economic development leaders focus on these wins and ignore what’s bubbling beneath the surface in their communities.
The announcement of these transactions must be accompanied by an understanding of the short and long term consequences. Often these broadcasted wins fall short of the excitement promised. Economic forces change the narrative and project scope as the growth ramps up; or worse, the face-value excitement is for a deal that will strain the community fabric. For example:
Community Win: Job creation!
Community Loss: All of the jobs pay below the community’s living wage.
Too many communities are losing with this rhetoric, and trust in leadership is lost as excitement deflates.
Announcing improvement in areas like place, investment, diversity, sustainability, and talent are the wins that leaders should aim for to create a lasting impact and to maintain trust and excitement about local development.
The Fourth Economy Community Index is a great resource for economic development officials to start looking into key indicators, like those listed above for each county in their state. The Community Index is a free resource that profiles almost every county by using 19 indicators that we think illustrate what is needed for success.
Quality of Place Drives Economic Development
For years now, I’ve been preaching that the best tool for economic development is a vibrant community that supports diverse lifestyles. There are a lot of people who get paid to tell you how bad your tax system is, why you should throw truckloads of incentives at companies and that your red tape is ‘crushing business’. Our research has shown that in a vibrant community those issues become footnotes and not the lead story. People want to be in communities that have culture, recreation, good education, and a welcoming environment. If you have those things people will stay or move to be there and the jobs will follow.
A few years back we researched the most transformed places in the country and found the quality of place to be the common thread. The message and results of that research are stronger than ever.
Power Comes From Collaboration
The history of governors and economic development leaders is filled with those who have tried the Command and Control approach, and those that pursue Collaboration.
The command and control leaders think that the path to success can be dictated. They fail to recognize that economic development is a team effort that can sometimes involve hundreds of organizations and leaders.
The Collaborative crowd recognize this and use their positions to rally, to leverage, to inspire those in their network to pursue a shared vision. The collaborative leaders will have a longer-lasting positive impact. They are the ones that collect awards and are well-regarded by their peers and communities they serve.
These are my three pieces of economic development advice to our newly-elected officials:
- Don’t get caught up in flashy announcements
- Pursue quality of place for all citizens
- Work collaboratively with organizations and local leaders.
Governors that uphold these standards will set themselves, and their state, apart from the rest. I hope that all leaders, not just governors, can use this advice to help chart a better course and support vibrant communities in their state.
Who are you designing your talent attraction and retention program for? You might say, “For everyone!” And you might mean that – in today’s tight labor market, being able to keep and attract a great workforce means widening the definition of “talent”.
We know that the economic development profession is overwhelmingly caucasian, and, especially in areas of leadership, skews male.
When talent attraction and retention programs are designed by older, white males, then the community enters into a loop of marketing the program right back to the same audience. This is known as “cognitive bias” and it shows up in every field. A startling example of this comes from the U.S. auto-industry’s all-male teams of engineers. They designed the earliest air bags for test subjects that resembled themselves, the result of which killed many women and children whose smaller bodies were not accounted for.
To be fair, the stakes for talent attraction and retention campaigns are not quite as high, but we know that companies are increasingly making operating and relocation decisions based on the availability of a strong workforce. The more educated and talented these workers are, the more competitive a community’s case will be. Rather than focusing your strategy on “everybody” perhaps it is time to target one of the largest sectors of the talent market – Millennial women.
Sisters are doing it for themselves
Why millennial women? Millennial women are highly educated, high earners, and entrepreneurial.
Consider the following statistics:
- About 36% of women ages 25-34 have a bachelor’s degree or higher, compared with about 28% of men who are the same age.
- Though there is still a gender wage gap, women’s wages are rising; between 1975 and 2016, the share of young women earning less than $30,000/yr plummeted from 79.6 percent to 58.1 percent.
- Women are starting about 1,821 new U.S. businesses per day, a significant uptick from an average of 952 between 2012 and 2017.
- There are more than 9 million women owned businesses in the US today.
There are many reasons why women are playing a larger role in the economy, not including the relaxed expectations for women to immediately enter traditional marriages.
One reason for their increasing role is, ironically, due to traditional gender roles. Because of sexism in blue collar jobs, women have more of a need for education than men to earn comparable salaries. Of the jobs that do not require a college degree, the highest paying ones typically go to men. Plumbers, electricians and truck drivers have higher wages than female-dominated jobs that don’t require a degree such as secretarial work, child care or restaurant-industry jobs. This has resulted in women seeking out higher education more often than men and has created a pool of young, female knowledge workers.
The impact of women on your community
Attracting more women impacts your community favorably, both economically and socially.
Furthermore, women control a lot of money and spending. Globally, women are responsible for 85% of consumer spending: the average woman is making purchases for herself, her husband or partner, her children and her elderly parents. That translates into a powerful economic force in your community.
One industry in particular that has benefitted from more women in the workplace is the wellness economy. From 2015-2017, the wellness economy grew from $3.7 trillion to $4.2 trillion, or by 6.4% annually, a growth rate nearly twice as fast as global economic growth. This includes sectors such as Wellness Tourism ($639 billion) Personal Care Beauty & Anti-Aging ($1,083 billion) and the Spa Economy ($119 billion). More women in your community means more jobs for those in the health and beauty industry.
Additionally, a report from the Bureau of Labor statistics shows that women volunteer at a higher rate than men, across all age groups, educational levels, and other major demographic characteristics. Think of all the aging non-profit boards in your community – attracting young women is a way to ensure the continuity organizations and supplement their leadership!
Millennial women, between the ages of 25 and 35, are reaching a point in their careers where they need to make a decision about where to locate more permanently. Due to lower rates of marriage and childbirth, this population is mobile. But they need a good reason to call your community home. Designing your marketing strategy so it speaks to women’s needs and wants will ultimately determine if they choose to relocate and exercise their social and economic abilities in your community.
How to reach these women where it will impact them?
When marketing to millennial women, like any group, it is important to target their key motivations and speak to their values in a way that resonates. Showing, rather than telling, that your community’s values align with theirs can influence decision making.
To attract women, you should speak to the following:
While millenials in general are not buying homes at the same rate as previous generations (hello student loan debt!), single women are buying homes and condos at nearly twice the rate of single males.
Personally, this statistic aligns with my lived experience. I moved from Washington D.C. to Pittsburgh partially because I could afford to purchase my own home. And when comparing the status of many of my closest friends in each place, a majority of my Pittsburgh friends own homes, whereas only a couple of my D.C. friends did.
Does your community have plentiful and affordable housing available for purchase? Make sure it is highlighted in your marketing efforts.
And let’s not forget the pay gap. On average, women make 80% of what men make. (Www.aauw.org). That’s due to a lot of factors but it’s a fact that women are very aware of. Showcasing businesses that are committed to equal pay, or making the case that your money goes further in smaller communities speaks to women’s concerns about lower wages.
Illustrating your community’s commitment to family connections is also a relevant message for millennial women. The responsibility to care for aging parents often falls to women because of gender norms around emotional labor. As parents grow older, millennial women will be increasingly called upon to address their care. Conversely, if a woman has children, being close to her parents often provides a built-in support system and potential child care benefits.
Attracting young families back to your community has the added benefit of keeping their parents in place. In some communities we have seen the “Double Brain Drain” wherein retired grandparents move to be closer to their grandchildren. Bringing young families to town ensures the older populations don’t move away.
Social media marketing allows for very targeted ad campaigns. Facebook is a relatively inexpensive way to target specific populations, including new parents. And, even without paying for advertising, a viral campaign about how your town is family friendly might catch some eyes.
Young women have flocked to larger cities for a number of reasons – more things to do, better restaurants to try, more impressive scenery for their mental health (and instagram photos). But more often than not, what they are seeking is opportunity.
The more you can show women rising to success in your community, the more women will be interested in seeking opportunity there. If you look around and don’t see women owning businesses or in corporate leadership, ask yourself why not. Is there a need to start an incubator for women and minority owned companies? Do your corporate partners have a diversity program or mentor ship option? Once these programs get off the ground, highlight them in your marketing materials.
Be Authentic! Don’t try to play this marketing angle without actually having the programs to back it up. Promoting a false commitment to equality can backlash.
Their Health (Social, Emotional and Physical)
It’s not enough to have a yoga studio. Every city and town has a yoga studio. What you really need is free yoga. Preferably combined with alcohol.
Young women need to make friends and build a community to choose to make a place a home. But (as I covered in a past blog post) young people are not interested in boring business after hours networking events. Yoga is a high value activity – classes cost between $10-20, but if you can, encourage a local organization (think: library, nonprofits) to do free/donation based events. Adding a happy hour afterwards gives the chance to form relationships. Holding the class in an interesting space, like a museum, provides something to talk about. For extra credit, you can incorporate adorable baby animals.
Make sure to highlight health-oriented and social activities in your marketing plans to pique women’s interest and draw them to your community.
Men will follow
The title of this post is flatteringly adapted from our friend and collaborator David Feehan’s excellent book “Design Downtown for Women – Men Will Follow” which delves into how downtowns can be made into a better experience for women, which in turn, creates a better experience for all.
Men will follow. In the most literal sense, they will follow their partners/girlfriends/wives in their decision to move to your community. But on a greater scale, communities that attract women will grow stronger through more resilient community organizations, more diverse companies, and more tightly knit social networks, and thereby attract people of all ages and gender. The outcome of targeting your talent attraction and retention strategy on young women is a better value proposition for all those who might call your community home.
Clairton, Pennsylvania is home to less than 7,000 residents. It is probably best known for being the home of the Clairton Coke Works and was once known as the Coke Capital of the World. It is also known for being the home of the Clairton Bears, the local high school football, which had a 66 game winning streak that spanned 2009 to 2013.
Clairton is one of the Monongahela river towns where the decline of the steel industry hit hard. Tucked onto two hilltops that overlook the river, train tracks, and the coke works, Clairton has seen more than its fair share of losses. More than a decade ago, the last grocery store in town closed.
Now, there is positive momentum. Local residents, working through two committees: The Healthy Food, Social, and Human Services Committee and the Neighborhood Partnership Program Committee guided the development phase and ensured engagement by the residents of Clairton. The effort to get to opening day resulted from the efforts of two nonprofits, Economic Development South and Just Harvest. Funding for the store was provided by the Pennsylvania Department of Community & Economic Development’s Neighborhood Assistance Program (funded by BNY Mellon and Highmark), and Bridgeway Capital.
Fourth Economy and Palo Alto Partners were engaged by Just Harvest to assess the financial viability of the fresh foods market planned by Economic Development South. We conducted a needs assessment to identify the areas of highest need in Clairton, combined with an opportunity assessment to identify the areas that would be most accessible to residents. We also conducted an evaluation of local expenditures and competing stores and to assess potential store locations in Clairton. Surveys of residents provided critical insights into what factors would make the store successful. The study estimated the potential sales that could be captured for different offerings. Finally, the study integrated all of these analyses into a business plan and operational model.
The results of our analysis demonstrated that such a store would have a narrow path to sustainable break-even operations. Every scenario required some level of subsidy to overcome early operating losses. As a consulting team, we were downcast that we were not creative enough to find a sustainable, break-even solution. We were dreading when it came time to present the results to our project partners at Economic Development South and Just Harvest.
When we got to final numbers on the cash flow and the break-even projections, we expected to hear something like, “Well, thanks for trying.” We got a very different response instead. Greg Jones of Economic Development South was ecstatic — the numbers were much better than he expected. “We can make this work. This is less than it costs to educate people about food deserts and the lack of fresh produce. If we can actually provide fresh foods at this cost, this is a no-brainer!”
With the opening of Produce Marketplace, at 519 St. Clair Avenue, residents of Clairton will have access to affordable fresh foods all year round. It has been great to see this project come to life. It will be two or three years before we know that the store is sustainable, but the level of community engagement and interest to date provides a good leading indicator of the store’s viability.
We see the Fourth Economy Community Index as a starting point for communities, providing a baseline to help understand where they are doing well and see where there is room for improvement.
We envision using the information:
- When developing an RFP to create specific strategies to improve your community
- To lead community discussions about areas of relative strength and weakness
- To inform presentations to stakeholders about the state of your community
- To compare your community to top ten communities of the same size
The Index model incorporates twenty different indicators in the areas of Investment, Talent, Sustainability, Place, and Diversity. While we know there is no single recipe for economic success, we also know that these five areas are critical ingredients in vibrant communities everywhere.
What do we mean by each of these?
- Investment: active businesses, access to capital, and investment in physical infrastructure
- Talent: a growing workforce with education and job skills, equipped to excel in high-wage opportunities
- Sustainability: transportation, land use, and environmental conditions that promote healthier lifestyles and a healthier planet
- Place: affordable housing and transportation options that provide access to recreational and cultural amenities
- Diversity: personal and professional interaction across lines of race/ethnicity, age, and wealth
Top 10 Mid-Sized Counties in the US (50K – 150K)
- Minnehaha County, SD (Sioux Falls)
Minnehaha County, South Dakota, has strengths in Place, Investment, and Talent, and has experienced a whopping 8% growth in population over the past five years. Along with the increase in the population of Minnehaha and the Sioux Falls area, the county also has a robust business community and has seen increasing development to meet demand, as illustrated by the blossoming communities around Sioux Falls.
When was the last time you visited a public library? How about a Starbucks? As of 2017, it is noted that there are more public libraries than Starbucks in the U.S. I’ve experienced a recent uptick in my library visit frequency. Instead of simply using their printer when mine is on the fritz,I’ve used their resources to successfully kick-start an abandoned community garden, discover local neighborhood assets, and score a free yoga class.
In late July, there was an opinion piece shared by Forbes (that was quickly deleted due to insane backlash), that insisted Amazon could and should replace libraries. Leave it to the librarians to whip up some serious backlash. So it’s obvious that there’s a need for libraries, but why? In both rural and urban areas, libraries are moving away from simply being placeholders for books, and closer to becoming a space that meets unmet society needs through technology innovation, education, and municipal services.
Let’s rewind 20 years…
Maxine Bleiweis’ 1997 publishing of Helping Business- The Library’s Role in Community Economic Development, served as a How-To manual for the library’s role in small business development. Back in ‘97, libraries offered free training courses, aided in workforce development, and began advocating for a strange new gizmo: the internet. In the past twenty years we’ve seen the rise of this online resource, with most library materials reflecting this shift. Many now provide public access technology infrastructure resources and capacity, digital literacy support, and domain-specific services and programs (civic engagement, education, health and wellness, etc). However, states with a high percentage of rural areas still struggle with supporting small and local businesses when their residents lack a reliable and affordable internet connection. It’s 2018, and in every single state there exists a portion of the population that doesn’t have access to broadband.
Libraries to the rescue!
In Missouri, Secretary of State, Jay Ashcroft, is pushing to fund the “Remote Electronic Access for Libraries Program”, which supports the costs of internet access, technical support, and other training services at the state’s public libraries. Ashcroft views the program as a cost-effective way to spread broadband throughout the state”, an issue that many states’ deal with. The roots of the Public Library run deep in supporting public needs beyond provision of paper materials . For example, Andrew Carnegie’s first designated library in Braddock, PA (pictured below), was imagined to be a full service center for working class Americans. It was equipped with billiard tables and a bathhouse to provide mill workers with a place to shower before using the facilities.
Photo circa 1893: Library of Congress Prints and Photographs Division (REPRODUCTION NUMBER: LC-DIG-ppmsca-15382)
In a world where people are paying to get ahead through specialized education such as training programs and certificates, libraries are slowly breaking down the inequality barrier.
In June 2014 the Free Library of Philadelphia launched a Culinary Literacy Center, aimed at revolutionizing the way residents think about food and nutrition while advancing literacy and teaching math through measurements. Over in Connecticut, the Westport Library’s makerspace is equipped with 3D printers which allow users to learn modeling software programs, and robots to teach coding and computer-programming skills. Outside the U.S. exists what is commonly referred to as the gold standard in library innovation, Dokken, in Aarhus, Denmark received the award for best public library in 2016. Patrons can park in the automated, robotic underground parking lot, make use of the lecture halls, and get some fun time in at one of its three on-site playgrounds. Furniture is movable, allowing users to create whatever space they require, a reflection on how libraries function best when listening and responding to community needs. After renovations, visitor counts skyrocketed from 1,800 to 3,800 visits per day.
At a time where inequality is at its highest in the United States, we need more than ever, to embrace potential innovation for societal goods that libraries hold in both urban and rural areas. Whether it be through entrepreneurial and small business support, broadband availability, or being an inclusive space for community engagement, Libraries bring social wealth to communities and subsequently, their economies.
The upcoming revitalization of Braddock Carnegie Library of which Fourth Economy is helping, will allow us to complete a community and economic impact analysis for the library. I’m personally excited about drawing lines from community needs to what the library can offer.
This week, children all over the country go knocking on doors in the annual ritual of Halloween, trick or treat. In many places, this day is one of the few when you get to meet your neighbors as we go door to door, shuffling along and bumping into friends not seen in some time.
Amazon HQ2 is that kid who ignores the rules, that senior in high school who just wants the candy. Amazon HQ2 did not wear a costume and knocked early when, on September 7th, 2017, it announced its intentions to locate a $5B second headquarters and a 50,000 person workforce somewhere in North America. In a reversal, Amazon pulled a neat trick by getting potential suitors to send elaborate proposals on what treats they had to offer, thus sparing the company the drudgery of actually visiting the communities.
Amazon has always been an industry disruptor, and this latest campaign is either pure genius or a Trojan horse: a trick or treat experience that by my estimate cost North American communities well over $119 million in staff time, and professional fees for video production, print media, research and economic analysis and more to create their responses. In its mailbox, Amazon received 238 proposals in response to its detailed request for proposals.
There are so many lessons to learn and points to consider in what ensued over a six week period that I plan to make this an Amazon HQ2 series over the next year. As I dwell on the HQ2 lessons learned, I’d love to hear your thoughts and feedback. To get that started, please take the companion survey here:
In this posting I cover: Trick or Treat? 5 Experiences of HQ2
Treat: Quality of Place
The criteria that Amazon published in their RFP is straight from our (link to Fourth Economy Quality of Place pdf) Consulting Playbook. While we hope that all of the bidders can cover the basics of labor force, location, and incentives, it is the areas that cover cultural community fit and community/quality of life attributes that make the RFP a treat. These are the areas that, we believe, can make any community a success. Amazon notes variables such as a diverse population, strong higher education systems and local government that will work with them. Under quality of life they mention daily living and recreational opportunities.The real treat will be if all 238 cities actually spent time considering these factors and while putting their best forward also identified opportunities to invest in making their quality of place better.
Trick: A proposal is not a plan
My professional guess is that very few of the cities that submitted a proposal actually had an economic development strategy in place that guides how they will attract and retain new jobs, let alone how they will handle 50,000 over a short period of time. On the other hand, the communities that do not have such a strategy but did submit a bid now have a lot of great information collected in one spot that they can use to advance a plan that goes beyond this one opportunity or if Amazon delivers less than promised.
Treat: Dare to Dream
In many communities, the thought of 50,000 new jobs in a relatively short period of time is exhilarating. This is especially true in Rust Belt cities that lost a lot more jobs that that over the past two or three decades and have struggled with starting the growth engines again. The exhilaration is of course tempered a little when one starts to look at what Amazon’s growth has done for Seattle’s housing prices and other cost of living factors. The resulting conversations are good though as these are the scenarios that communities should be considering with any plan for growth. I am hopeful that the 238 dreamer cities all use the time between now and Amazon’s next step in the process to have honest conversations and plan for what’s next in their communities.
Trick: All That Information
Amazon now has a lot of information on 238 communities and as a company built on data mining they are going to have a field day slicing and dicing. They ask in the RFP for a great deal of information that is readily available via the web. Locations with 1 million people, proximity to an international airport, crime statistics, stable business climate. All of this information could have been found through a simple request to Alexa. Or just start with the New York Times, CNBC, Brookings and more who all crunched the numbers and provided their ‘Top’ lists of communities that meet the criteria. The style points of how the proposers are pitching their communities must have been the reason to ask for Amazon to have them to do their homework for them. So the trick is that as many as 237 communities did a lot of work and may still get a failing grade.
Treat or Trick: Place Your Bets
The idea that there are betting sites now offering odds on which city will be chosen is probably both a treat and trick. A treat in that we can all continue to play along in the speculation and if we guess right make a few bucks in the process. A trick because the notion that people are literally betting on communities opens up a strange channel of conversation about their future.
Over the past decade, co-working has grown from a niche offering to having a significant impact in terms of the commercial real estate market — and providing a new alternatives tailored for remote and independent workers and small teams.
This summer, Fourth Economy was engaged to create a market assessment for the co-working market here in Pittsburgh. As a part of that effort, we reviewed a volume of existing secondary research that answered questions similar to the ones that we were looking to answer in Pittsburgh: what is the market capacity for co-working? Who is the co-working market? And, as we’ll address in this blog post, how is “co-working” defined?
What is co-working?
The Oxford Dictionaries define co-working as “the use of an office or other working environment by people who are self-employed or working for different employers, typically so as to share equipment, ideas and knowledge.” The general definition was reiterated in the reports we read the most closely *. But this definition doesn’t help narrow down on what the boundaries of co-working are, ranging from a desk one can rent for a few hours to a serviced office space one can rent for a team of 15 workers. Reading them more closely, these reports tended to define co-working, and view the co-working market, through either a real estate-centric or a workforce-centric lens, depending on the benefits or targets of co-working they focused on.
Deloitte’s report defines co-working as a “membership-based workspace with a monthly fee giving access to a desk, office space, Wi-Fi, and other amenities.” The real estate-centric definitions focused more more on the short-term lease and flexible membership benefits of co-working, rather than its community-based or knowledge-sharing aspects. In this framing, co-working is usually lumped in with professional serviced office spaces like those of Regus or WeWork; the different work styles of serviced offices and co-working (specifically, the social difference between working in an open space close to other co-workers, as opposed to in a small rented office with shared amenities) are not emphasized.
This is also reflected in the types of co-working spaces many of the reports we read measure: because their focus is on the commercial real estate implications of co-working — both for the entrepreneurs or remote workers who are co-working tenants and for the co-working operators (like WeWork or Regus) — these reports tended not to measure locally-run co-working spaces.
The workforce-based definitions were centered around the culture of these spaces. This approach highlights the types of worker (e.g. self-employed, entrepreneurial, etc.) as well as the collaborative and innovative elements of the space. For instance, in their “The Work Shop” report, CBRE describes co-working as “the best elements of a coffee shop (social, energetic, creative) and the best elements of a workspace (productive, functional)” combined to give workers the opportunity for an affordable, shared space. This definition explains a general value proposition for co-working — but elides how that value proposition differs across teams of different sizes and across the different types of spaces (from rentable private offices to shared desks) that may create a more or less collaborative co-working environment.
Given these different lenses through which to view the co-working market, how did we categorize the Pittsburgh market for our own study? We categorized it two ways: through identifying three main types of co-working spaces we observed in our market, and through identifying the different needs and motivations of co-working clients, from single clients through 8-person teams.
Three kinds of co-working
In the absence of one specific way to define what co-working includes and doesn’t include, we focused our analysis on workspaces that allow for short-term, flexible lease terms with shared amenities (like kitchenettes and meeting rooms).
We segmented the Pittsburgh market into three rough categories, “Professional Co-Working,” “Community Co-working,” and short-term offices. Professional co-working spaces generally feel more corporate, may have more expensive furniture and finishes, may offer additional amenities like a front-desk receptionist, and are offered at higher monthly rents to reflect those factors.
Community co-working spaces are community-driven spaces with a neighborhood orientation that offer flex and fixed desk workspace at a lower price point than professional co-working spaces. They are similar to professional co-working spaces in that they offer a membership model (often with month-to-month leases) but differ from professional co-working spaces in, corresponding to their lower price point, they may not have professional operations or staffing (like a front desk), the finishes and furniture may be less expensive, and the technology and building operating systems (for example, for teleconferencing or climate control) may be more basic. The trade-off is the emphasis on relationships and community that community co-working spaces offer — as one proprietor told us, co-workers first come to their co-working space because of the space’s proximity to where they live — but stay for the community and connections. Community co-working spaces also differ from the other types of spaces in that they often have a specific community focus, like social entrepreneurship.
Finally, short-term offices range from serviced offices, executive suites, business centers, or other lease-negotiated and based-agreement that may encompass some flexible or open space. Short-term offices differ from either professional co-working or community co-working in that they are specifically offices for small teams, as opposed to flex or fixed desks, and because of their lease-based, rather than membership-based, business model.
Cultural benefits — and costs — of co-working
For the smallest companies, beyond the financial benefits, co-working represents a low-barrier opportunity to participate in a professional culture. For slightly larger companies, the larger culture of the co-working space offers the possibility to either benefit or disrupt the internal culture of the company, depending on how well-matched the two are. Teams of above eight or ten people already have a profound enough sense of cohesion and internal culture that the benefit of being in a co-working space no longer satisfies that need—and a mismatch between the expectations of smaller and larger companies (as contributors to the overall culture of the co-working space) can be a challenge.
The importance of definitions
Reviewing the existing set of definitions for co-working, and creating a framework for understanding the study for our own analysis, was critical to being able to paint a picture of this exciting emerging market for our clients that was as specific and actionable as possible — and helped give them, and us, some new language and tools for understanding how they fit into the market.
Want to talk to us more about co-working and other entrepreneurial supports in your community? We’d love to hear about the impact of co-working where you are. Email us at email@example.com.
*Including Newmark Grubb Knight Frank’s October 2016 report, “Scale of Disruption: The Sharing Economy’s Effect on U.S. Commercial Real Estate,” JLL’s “Shared Workspaces” report, NGKF’s report “WeLease: The Growth of Shared Workspace and Its Impact on the New York City Market,” Deloitte’s report “The London Business Footprint: The Growth of Serviced Offices,”Cushman & Wakefield’s 2015 report “Continuing the Evolution of Flexible Working,” and CBRE’s 2016 report “U.S. Shared Workplaces” and “Work Shop” reports
What do you imagine when you hear the words “comprehensive plan”? Hoards of consultants descending upon your community for years, churning out meaningless data, hosting pointless community meetings, and producing a mammoth document that goes to live on the shelf? Well, not in Gary, IN. Gary is taking a different approach to comprehensive planning, and Fourth Economy is excited to be along for the ride.
While Fourth Economy is part of a team of consultants, including Raimi + Associates, Volte Strategy, and Dynamo Metrics, we are just the behind-the-scenes support team. The folks at Gary’s Department of Planning, Redevelopment, and Zoning issued an RFQ looking for “a team of thinkers” with demonstrated “ability to provide services and creative solutions in a highly complex urban setting where social equity, economic parity, and community resiliency are foundational elements of the comprehensive planning process.” All small firms, we are providing our expertise, but not according to any set process. Rather, this will be a truly iterative process, guided by the vision and priorities established by the community.
Though the team at the City, led by the inimitable Joe Van Dyk, will be leading the process themselves, they don’t expect to be the face of it. They are pulling together a team of residents and community leaders who will develop and implement all of the engagement. This means that our role as consultants is simply to create the tools and convey the data in a way that the community can truly own.
Recently, Joe kicked off the process by inviting all of the consultants to Gary for two days of listening. We met with faith-based social justice advocates, neighborhood champions, and movers and shakers of every sort. It was truly exciting to hear the passion that everyone has for their city and to see the investments they are making in Gary’s future. We are honored to be able to play a small role in shaping that future and are certain to learn a lot along the way, which we look forward to sharing!
Fourth Economy’s President and CEO, Rich Overmoyer, and Social Innovation Strategist, Chris Ellis, recently co-authored an article for Green Building Alliance’s annual publication, Viride. The article, titled Social Change: Refinanced, discusses the origin and recent growth of impact investing. Communities around the country have begun to prioritize triple bottom line benefits and partner across sectors to achieve a greater social impact for their citizens. This new focus has resulted in an impact investment market that currently stands at $74 billion* with projections of $2 trillion in growth over the next decade. The article discusses the origin of this field, highlights how impact investing was used to expand access to high-quality early childhood education, and considers how this financing tool can be utilized to support communities throughout Western Pennsylvania. Click here to read the article.
Have thoughts about impact investing? Let’s talk. Send a note to firstname.lastname@example.org.