The Community Index began six years ago as an effort by our team to document the key indicators of current and future vibrant communities. Fourth Economy takes a holistic approach to economic and community development. Our model considers a range of criteria to measure economic strength. The Community Index is made up of 20 indicators across five themes: 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.
From 10 to 1,837
Each year, we publish a list of the top 10 scoring counties. In 2018, we developed an interactive tool to allow others to see how our Index model ranks counties across the country. This year’s Community Index features data on 1,837 of the 3,007 counties in the United States, covering all counties with a population of 20,000 or more. Each benchmarks against all counties in the state, geographic region, and similar population size.
A great conversation starter
We debuted the Community Index tool at the International Economic Development Council conference in Atlanta. Our first users were inquisitive and had some great questions. Some of the most interesting questions we fielded include:
- What outcomes were unexpected?
We were glad to see that the model does not identify a specific recipe for economic success. Communities that score highly across our categories do not come in one mold, but many—from rural cultural hubs to small, developing cities to booming metro regions.
- What should I do with this tool? How is it useful?
We hope that people will use the dashboard to explore the economic strengths and weaknesses of specific communities, use the Index map to see who is doing well across the country overall and in specific metrics, and use the top ten to read about some particularly strong examples of regional economies.
- Why do all the counties with cities score so well?
Generally, more densely populated places have economic and cultural assets that more rural or suburban places do not, and the model picks up on this. So on one hand, it’s important to compare among similarly-sized places. That’s why we’ve organized the counties by size categories. So, when comparing large cities, it’s important to realize that a score of, say, 85 (as with Allegheny County, PA) is not as high relative to its geographic peers as a score of 85 for small communities. BUT, there are also many small communities that do well in our model. Look, for instance, at our top ten list for mid-sized counties. Or, look at the even smaller communities of Juneau, AK, or Wasatch, UT, for some high-scoring examples.
- Why didn’t we look at counties with fewer than 20,000 people?
Many of the indicators that inform the index model are population-based statistics that have been collected from sources like the US Census Bureau. For small populations, these data are less reliable (i.e., come with greater margins of error) and can be more significantly influenced by single contributors (e.g., a company opening or closing), so for that reason, we’ve chosen not to include small, rural counties in this version of the model.
- Why did you analyze at a county level?
We analyzed at a county level because of the data set availability. It’s easy for us to combine indicators and to do a multi-county analysis for a region. For specific projects, we could apply the index model to other types of geographies, or conduct or more nuanced analysis (for geographies that are either larger or smaller than counties), but that is not part of this tool.
We see the Community Index as a starting point for communities, providing them with a baseline to help understand where they are doing well and see where there is room for improvement. Many of our most interesting projects stem from conversations with communities about where they are and where they want to be. Do you have a question you’d like us to answer? Reach out!
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.
In mid-August, Fourth Economy and the Borough of Ford City played host to developers and investors for an Opportunity Tour.
Fourth Economy has been working with Ford City on their Comprehensive Plan, and this tour was designed to gauge interest and gain ideas for how development might take place on two sites in the community – the former site of Ford City High School and the riverfront that runs between the town and the Allegheny River.
The riverfront is currently home to several different uses – the 36 mile Armstrong Trail starts about a mile away from Ford City and runs the length of the town along the river. Also along the river are several manufacturing firms, some of which have located in the former home of Pittsburgh Plate Glass. At the north end of the riverfront site sits a few uninhabited buildings formerly housing the the Elgier toilet plant.
The Tour began at Klingensmith’s Drug Store, with local leaders greeting their out of town guests, and a quick overview of the comprehensive planning process and the proposed capital improvements plan. After a quick walk around the downtown, tour participants split into a caravan and drove to the southern end of the riverfront, then continued back up, making stops along the way, with property owners along the route to fill in information about each site.
On a clear August day, with a light wind blowing and the sun sparkling off the Allegheny river, tour participants brainstormed about the potential of marinas, riverfront restaurants and residences, and how to repurpose the existing industrial infrastructure.
The next stop was the former high school site, which offers a unique opportunity for development in the center of town.
Down the street from the former high school site, the group gathered at Spigot Brewery for a refreshing happy hour with food provided by Harper’s Grill, a recently opened restaurant that offers burgers made from grass-fed beef.
The tour capped off with a presentation at 10th Street Station, which was attended by residents, town leadership, and tour participants. First, the group heard from Leslie Oberholtzer of Codametrics, about the upcoming process that will result in a new zoning code for the Borough. Then, Jim Kumon of the Incremental Development Alliance explained how starting development on a small scale through rehabilitation of older buildings and spurring small businesses could change the town’s economy.
While the tour ended, Leslie and Jim returned to Ford City the next day to lead workshops in riverfront planning and activating spaces. During the first exercise, the group split into two and cut out different land uses to paste them on a map of the riverfront, an exercise that was useful for envisioning what the space might look in the future.
In the afternoon, Jim Kumon provided several examples of places that had activated uninhabited parts of their towns through markets or recreation, and how that lead to more investment and development. Participants then split into three groups, and brainstormed ideas for how to take the “next smallest step” for the riverfront, the high school site, and the downtown. The riverfront and downtown group went on field trips to survey their spaces, and returned with good ideas and information to share.
Everyone is talking about workforce.
Thoughts around the impacts of an aging population, the need to attract diverse and skilled workers, the power of millennial talent, the technology skills gap, upskilling, the role of career and technical education (to name a few) are on the minds of every city and region seeking to get ahead of one of the leading threats to economic growth. Yet, talk is just that … talk. Though important, it is inaction that’s really costing regions their competitive advantage.
Fortunately, we know of and have invested time in places ready to do something about their current and future workforce challenges. Resonating in these places is a common resolution: connect job seekers to high-opportunity careers. Here’s a snapshot of what’s being done:
In places where quality training is limited, they are deepening connections between industry employers and technical colleges to create and expand apprenticeships for entry-level workers and mid-career talent. A “learn and earn” approach to training that entails a combination of classroom instruction, on-the-job-training and industry-specific skill development is proving to be a great model of success in places like South Carolina with its employer-focused Apprenticeship Carolina initiative.
In places where there’s a large pool of disadvantaged, underskilled talent, they are leveling the playing field for job seekers by mitigating barriers to entry. Opportunity@Work’s offerings in underserved communities across the country extend beyond skills training to include efforts to transform employer hiring practices and reimagine education financing. Their efforts result in more equitable and fair hiring and options such as financing and wrap-around social services to make it easier for lower-income individuals to seek training and perform on the job.
In places where low-wage jobs are common, efforts are underway to increase access to better, higher wage jobs and improve job quality. Through the Apsen Institute’s Good Companies/Good Jobs initiative, communities are partnering with employers to incentivize and reform conditions for low-wage workers. Boston’s hotel industry is a benefactor of their efforts as front-desk clerks, housekeepers and the like are now making living wages and have increased opportunities for job advancement.
These are just some of the many actions cities and regions are taking to build a strong and more resilient workforce for today’s needs and tomorrow’s success. They aren’t just talking about it, they are doing something about it with strategies that are providing strong return on investment and ensuring an overall stronger economy.
Got solutions? We’d love to hear them. Want to do more? Get in touch – we’d love to help.
All communities that we work in are seeking some sort of change. This change could come in the form of attracting talent and jobs or seeking to improve the quality of life in the area by leveraging an existing asset, such as a river or theater. Change is naturally difficult. It is challenging to envision the change that is necessary, work to develop it, and ultimately implement this new vision. However, realizing change is much more challenging when the process lacks input from every corner of the community.
As our team at Fourth Economy works in communities around the country, it is clear that engaging new voices in these efforts is critical. Most planning processes are driven by a usual group of stakeholders, including representatives from government, businesses, universities, and funders. While these voices are important, exclusively relying on the same opinions and perspectives limits the potential impact of community change efforts.
Therefore, it is essential to look for opportunities to grow the number of stakeholders and the variety of backgrounds in order to genuinely engage new perspectives. This engagement of new voices goes beyond an invitation to a meeting, but should strive to provide ample opportunities throughout the process to listen to this group, allow their thoughts to inform and guide the process, and offer chances for them to lead.
Many communities have attempted to incorporate new thoughts and ideas in their planning processes, but struggle to connect with populations that have not historically been engaged, such as minority communities and those living in rural areas.
To engage these new voices, it is important to meet them where they are. It may be difficult to engage them in the usual monthly meeting, during the day, in a boardroom downtown. Meeting people where they are requires communities to think creatively about how to facilitate the engagement of these individuals. This may involve identifying existing meetings where the desired population is already convening, such as meetings at schools and local community centers, hosting conversations in spaces in their communities, and working with individuals and organizations from the area to conduct outreach to engage people in their networks.
Engaging the “unusual suspects” in community and economic development processes is important for a variety of reasons.
- It will help your project generate new and diverse ideas.
- It will build stronger social connections in your community as people are encouraged to work with individuals that they do not normally.
- It will increase the likelihood of your community change efforts being successful because those individuals critical to implementation have been involved in the development of the strategies.
Engaging new voices is a best practice in community engagement, but more importantly, should be a standard that drives planning efforts in communities around the country. At Fourth Economy, our goal is to engage these new voices to strengthen the impact of our work and we would encourage all communities to do the same. Reach out to learn more about our creative efforts to engage new voices.
Have you had success or unique challenges in engaging diverse voices in your community engagement? Reach out – we’d love to hear about it or problem solve with you.
Energy is a vital sector and a job generator, but it is also important to understand that there are some real challenges for how the development of energy resources and systems benefit the economy.
The Good: Energy is a Job Generator
The 2017 United States Energy and Employment Report (USEER) estimated there are 6.2 million workers in Energy and Energy Efficiency in 2016. This broad definition for Energy accounts for four of every 100 jobs in the U.S. with the largest share in Energy Efficiency Construction. The Energy sectors defined by the USEER report added 300,000 net new jobs in 2016, more than any other sectors than Accommodation and Food Services.
Energy is a common thread woven throughout every aspect of our lives. It is a link between all sectors of the economy, our health, and the environment. Virtually every aspect of our modern industrial lives depend on reliable electrical power and energy infrastructures. Energy is vital for everything we produce but that link is weakening as manufacturing grows more efficient. Gross output in U.S. manufacturing has remained stable or grown since 1998, while overall fuel consumption and energy intensity have decreased.
The Bad: Energy Growth <> Job Growth
Even though energy is essential to our economic life, the development of energy resources does not translate into overall economic growth. At the state level, the development of natural resources and mining has not benefited the host states – there is no relationship between output growth in these sectors and the overall growth of the state economy. The lone exception is North Dakota, where the energy boom fueled growth in a state with about 750,000 people. For other states experiencing an energy boom, such as Pennsylvania, Ohio, and West Virginia, the energy boom has not translated to overall economic growth.
The Ugly: The Workforce Gaps
73 percent of employers reported difficulty hiring qualified workers over the last 12 months. Some of this reflects the difficulty in finding qualified workers willing with the skills and desire to take on a challenging job. However it also reflects the difficulty that some sectors have in recruiting from a broader pool of candidates.
Ethnic and racial minorities are not well represented in the energy workforce. In the U.S., Hispanic or Latino workers make up 16 percent of the workforce but only 14 percent in energy. Black or African American workers account for eight percent of the energy workforce compared to 12 percent. The glaring gap however is that across all sectors of energy women account for a low 22 percent of the workforce in energy efficient vehicles, up to 34 percent for electric power generation, which is still below the 47 percent for the overall U.S. workforce.
We need energy for our economy and it is an important source of job growth. However, the development of energy assets does not guarantee growth in other sectors. Furthermore, more must be done so that the jobs that are created are available to the widest possible pool of eligible candidates.
Springtime means conferences, and members of our team have been on the road. I have been back and forth to two conferences in Washington, D.C. in the last few months, attending the International Economic Development Council’s FED Forum in March, and the LOCUS Leadership Summit, in April. IEDC’s event was focused on economic development programs at the federal level, bringing in top economic developers throughout the county to interface with federal partners at the Economic Development Administration, Department of Labor, and other key partners. The LOCUS event brought together a coalition of real estate developers and investors who advocate for sustainable, equitable, walkable development in America’s metropolitan areas, as a program of Smart Growth America.
At both events, the topic of the hour was Opportunity Zones.
What Is the Opportunity Zones Program?
The Opportunity Zones program is a new federal economic development tax incentive designed to funnel private investment to low and moderate-income Census tracts across the U.S. The incentive provides Investors the opportunity to temporarily defer or avoid taxes on capital gains – profits from the sell of an investment – if those gains are reinvested in an Opportunity Fund benefitting low-income communities. These communities are designated as “Qualified Opportunity Zones (QOZ).” Each state will be allowed to designate up to 25% of the eligible tracts for Opportunity Zone status, with the final selections being made by the state’s governor. As of April, Census tracts in 18 states had been designated as Opportunity Zones. These are available for viewing on a map available through CDFI Fund.
The creation of this policy was lead by the Economic Innovation Group, who anticipates claims that this program unleashing will unleash $6 trillion in unrealized capital gains that can be leveraged in the neighborhoods that need it most.
How Does it Work?
According to Kenan Fikri, Director of Research at the Economic Innovation Group, who participated in a session at the FED Forum, Opportunity Zones can best be understood as a tax benefit akin to EB-5, or the Earned Income Tax Credit. In fact, rather than being housed in HUD or Department of Commerce, the IRS will be managing this program. This is due to the fact that investors will be drawn to Opportunity Zones primarily through the incentive of deferred capital gains tax. Here’s an example of how it works:
If an investor cashed out $1 million in stocks, they would owe 23.8% or $238,000,000 of that in taxes to the government. But if that $1 million were invested into an Opportunity Zone, taxes would be deferred for five years. If these funds stay invested for more than five years, then the tax bill would be decreased by 10% and if funds stayed in invested for more than seven years, the tax bill would be reduced by another 5%. Furthermore, whatever capital gains would be collected from investments made by Opportunity Funds in the Zone, there would be no capital gains tax levied.
Opportunity Funds are the vehicles through which investments can be made in these zones. According to the statute, Opportunity Funds will be set up as a partnership or corporation. They can fund investment in a domestic corporation, a partnership interest, or real property, so long as any of these have 90% of more of their holdings in an Opportunity Zone.
What Can You Do to Prepare?
At both conferences the feeling regarding Opportunity Zones was one of excitement but also uncertainty. One presenter at the LOCUS Summit likened this rollout period to the “wild west” because there is so little understood about what the outcomes will be. This is due to the speed at which the program was adopted and executed, as well the choice to have the program interred at the Department of Revenue. Here’s what you can do to prepare:
Stay Informed. There are significant questions about how the Opportunity Funds will be set up, with details about aspects of the program still ill-defined. The CDFI Fund has a ton of resources – updated in real time – to keep you abreast of all that you need to know. Check FAQ’s, explore a map of designated QOZ’s and other resources, here.
Think Smart About Outcomes. There is no doubt that Opportunity Zones will massively impact the investment levels in low to moderate census tracts. If your state got an extension, and is not one of the 18 who already has designated their tracts, it could be worth reviewing some of the criticism that has surrounded the first round of designees, and learning from this process.
Crowdsource. Going forward there also seems to be a role for community based financial institutions to step into the role of administering Opportunity Funds, or even incorporating crowd-sourcing to make these funds more community oriented. Community development stakeholders should keep an eye out for the public comment process to weigh in on how these funds can be best used for their purpose of benefiting low income populations.
I recently had the opportunity to go back to the Fort Wayne region of Indiana to reconnect with the Northeast Indiana Regional Partnership, who led the implementation of the Road to One Million plan. When we helped them create that plan, there was little precedent for the private sector to support investments in arts and culture, main streets, and outdoor recreation. But three years later, it was amazing to see the impact of $255 million invested in exactly those types of projects, with nearly 70% coming from private investment.
Since that experience we are always on the lookout for other examples of the private sector and economic development community collaborating and investing to create great places to live, especially at the regional level. This year’s American Planning Association conference highlighted a couple of great examples.
The Charleston Resilience Network is a collaboration of public, private, and non-profit organizations seeking to enhance the resilience of our region and communities. Recognizing the need to connect the myriad of puzzle pieces related to climate adaptation and mitigation, the Network was developed to foster a unified regional strategy and provide a forum to share science-based information, educate stakeholders, and enhance long-term planning decisions that result in resilience. Activities range from a bi-monthly happy hour to collaborating to pursue federal funding opportunities. The Charleston Metro Chamber of Commerce is an organizing member of the Network and many private sector companies are participants. Given the stark reality that hurricanes Harvey and Irma wiped out an estimated $200 billion in economic value according to Moody’s, it is critical that the private sector is a part of the conversation around resilience.
The Mid America Regional Council’s Creating Sustainable Places consortium is taking a strategic approach to utilizing federal transportation funding to further regional sustainable development goals. Planning and implementation funding is competitively let throughout the region to transportation projects that promote housing diversity, density, healthy lifestyles, historic and cultural preservation, and energy efficiency. The Greater Kansas City Chamber of Commerce is a partner in the consortium, and economic development agencies and private sector partners (such as architecture firms and the hospital) are part of the policy committee, which reviews applications. In order to compete for young, educated talent, it is critical that the private sector support planning that creates these types of livable communities.
Do you know of a great example of private sector participation in similar collaborations? Let’s talk!