The Fourth Economy team publishes a regular, semi-monthly eNewsletter, entitled Economic Architecture, which provides news, editorial insights, and stories of innovation, collaboration, economic & community development, and other drivers of the fourth economy.

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Ford City: An Outline of a Successful Opportunity Tour

 

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.  

Talk is (Not) Cheap! Doing More to Connect Your Workforce to High-Opportunity Careers

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:

Apprenticeship Carolina
Apprenticeship Carolina

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.

How to Incorporate New Voices into Community Change Efforts

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.Quote: 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

Engaging the “unusual suspects” in community and economic development processes is important for a variety of reasons.

  1. It will help your project generate new and diverse ideas.
  2. It will build stronger social connections in your community as people are encouraged to work with individuals that they do not normally.
  3. 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 and the Economy: The Good, the Bad, and the Ugly

Energy Towers

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.

Source: 2017 United States Energy and Employment Report (USEER)

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.

EIA Manufacturing Sector Output, fuel consumption, and energy intensity (1998-2014)

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.

Conclusion

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.

What’s the Buzz in Washington? Opportunity Zones

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.

Additional Resources:

Analyzing Opportunity Zone Nominations and What States Should Do Next

Guiding Principles for Opportunity Zones

3 Examples of the Private Sector Collaborating to Create Great Places

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!

Tackling Economic Inequity in a Resilience Strategy

St Louis 100 Resilient Cities CoLab, February 2018
St Louis 100 Resilient Cities CoLab, February 2018

Earlier this month, Fourth Economy came together with practitioners from various sectors and parts of the country to help St. Louis tackle the issue of economic inequity. We were convened by 100 Resilient Cities – Pioneered by The Rockefeller Foundation, because they have seen so many of the cities in their network identify economic inequity as a key stress. Fourth Economy is a platform partner of the 100 Resilient Cities network, creating tactical recommendations for the planning and implementation of resilience efforts. After two days of intense collaboration, our group of community leaders, Chief Resilience Officers, economic development experts, and other thought leaders developed seven discrete project ideas that St. Louis could implement to impact economic inequity.

St Louis, Missouri

Some of our ideas really focused on the basics. One clear take-away is that before we can implement new, innovative solutions, we need to ensure that we are investing in the basics.

  • Talk to Each Other – First thing’s first…Developers, city agencies, and community organizations need a forum to discuss how all partners enhance the tools, processes, and partnerships to implement equitable economic development.  
  • Equitable Economic Development Strategy – St. Louis is about to embark on creating an economic development strategy; making it explicitly about creating an equitable economy will be key.
  • Resilient CDCs – Like many of our cities, some of our neighborhoods have strong community-based organizing and development capacity, while others are lacking in investment, or quality investment, in part due to this lack of capacity. We recommended an organization that could promote sharing of resources, developing professional capacity, promoting collaboration, and developing a central pool of funding.

One of those other important basics is data. We all know that what isn’t measured, doesn’t count. So 100 Resilient Cities is working with the CUNY Center for State and Local Governance to help cities in the network develop a set of equity indicators. The equity indicators that St. Louis will be using to measure economic resilience and economic equity include:

  • Are residents able to fully participate in the economy?
    • Educational attainment: Enrollment in college or vocational training
    • Education quality: Dropout rate
    • Court reform: Youth adult convictions for nonviolent, nontraffic crimes
    • Court reform: Legal representation
    • Civic engagement: Digital equity
  • Are residents able to access goods and services?
    • Health: Pedestrian deaths
    • Health: Access to healthy food
    • Health: Access to social services
  • Are residents able to invest in their own community?
    • Financial empowerment: Median credit scores
    • Financial empowerment: Home loan denial rates
    • Financial empowerment: Business ownership rates

With these indicators in mind, our group developed ideas around both Access and Investment.

Access to Services and Jobs

  • Hubs of Growth – In cities that have experienced the degree of population loss that St. Louis has (and that’s a lot of us!), we must foster the development and growth of neighborhood hubs of economic and community activity that will drive growth in their surrounding areas. If connected by transit, these hubs can enhance safe access to healthy food and social services, but also create the density needed to support the growth of local businesses.
  • Mobilize – Another common challenge is the mismatch both between where people live and the skills they have, and where and what jobs are available. This idea brings employers and training providers to the neighborhoods to better understand the needs and opportunities of residents, and target services accordingly. Furthermore, micro transit would be used to connect residents to jobs.  

Investing in Small Business

  • Scale up STL – This program would increase access to capital and supportive services for small businesses that want to scale in targeted neighborhoods. This could include discounted land/space, collateral back stops, regulatory relief, and right-seed lending products.
  • Small Business Portal – St. Louis is making investments in its open data portal. But once they have all of their data available, how should it be used? This proposal is to engage small businesses to understand how the data can best be utilized to support their growth.
  • Women of STL – St. Louis could use a grass-roots organization run by women that strengthens the social fabric and supports the creation and growth of women-owned businesses. This organization would provide workshops, business incubation to address how to start a business, how to access credit, and technical training, e.g. use of internet resources.

As the City of St. Louis develops its resilience strategy, these ideas will be further developed. If you know of best practices in any of these areas, send them our way so we can help St. Louis create equitable economic development faster!

Why I Don’t Want to Come to Your Chamber Event – and How You Can Change That

Networking Group
ITU/Rowan Farrell

My circle of friends includes a lot of small business owners. People who own bars, print shops, jewelry businesses, motorcycle shops, yoga studios, food trucks, cideries, dinner clubs, podcasts, and organic farms. And they all have one thing in common.

They do not want to come to your chamber event.

I actually go to a lot of chamber and industry events—and I have benefitted tremendously from attending networking happy hours, gaining mentors and connections. But I’m an economic developer, and I’m used to the small talk, the dress code, and the business card exchange. My friends who are creative, entrepreneurial types are not interested in putting themselves in environments where the main activity is “networking” and the food options range from crudité and ranch to cheese and crackers, (typically without a gluten free or vegan option, excluding celery.) Faced with the choice of running marketing campaigns from their phone while they watch season 4 of Parks and Rec, or interacting with people they don’t know, they’re going to pick yoga pants and the couch over awkward conversations.

They also haven’t heard about your event. Your networking lunch may be posted on your website and Facebook page, but if this target audience is not already interacting with you on social media, then it’s not reaching small business owners outside of your members.

Why is this a problem? Why does the kombucha brewer need to know about and attend Chamber events? Because she represents your next generation of businesses, and if she is not accessing the services offered by your chamber and other aligned organizations, then your economic development ecosystem is failing.

Chambers are vital partners in economic development efforts. They are the access point for businesses in the region, and through their networks, businesses gain access to resources offered by the supportive organizations that can guide them to success, such as financing and mentorship opportunities.

Unfortunately, if a small business owner is looking at your chamber website, seeing a board and staff lacking diversity, holding events at the country club, she will not see your organization as a space where she fits. And when her business encounters a setback, without a network of support, you risk losing her business and all that comes with it—the owner, the employees, and the young people who would potentially be attracted to your community by the enticing things to eat, do, and see. Today, talent is the most important factor in retaining and attracting business, and chambers cannot stand to ignore a subset of small businesses just because they are unconventional or much younger than other members.

Another reason that your “Business After Hours” may not be attracting young people is that networking as an activity has lost its spark. With their purchasing decisions, Millennials have shown that they value authenticity, connection, and community – witness the success of outdoor brand Patagonia, whose products and branding advocate for ecological sustainability – and whose recent Pittsburgh store opening featured designs by a local print shop. With creative engagement with the community, Patagonia attracts young people with common goals and ideals to come together in their space, for events beyond shopping. Trading business cards and small talk does not provide engagement with a community or authentic connections.

Business networking events don’t really make sense to people running small, creative businesses. Talking to a bunch of random people at a business networking event is not an effective solution for growing your business when technologies like LinkedIn and Google exist, making it easy to research specific contacts, understand their expertise, and reach out for a coffee date. Finally, for young business owners, their time outside of work is limited, and they want to spend it having quality experiences.

So, what can you do?

Engage

Small BusinessEconomic development is a profession built on relationships. Stopping by the new businesses that are cropping up in your community and introducing yourself and your organization goes a long way. You might have to do a little bit of hunting – small businesses operating from their houses won’t have a storefront yet, but could be selling significant amounts of merchandise on Etsy or another online platform.

One way to get in touch with these producers is to keep up with farmers markets and maker fairs in your community. Maker fairs like Handmade Arcade feature hundreds of craft-based artists, makers, and producers; consider reaching out to the fair organizers to get an roster of local vendors whose booths you can visit.

Programming

Millennials have been programmed their whole lives. From Little League to dance lessons to student life activities in college, Millennials are really good at engaging in organized fun. Having an activity or event gives participants something to talk about and engage in together, creating an authentic connection. The description of Newaukee, a young professionals group in Milwaukee explains why programming is so essential to creating meaningful networking events for young people:

“…there had to be a way to socialize and explore the city with their peers that did not entail hauling a stack of business cards to a stuffy networking event. And they also believed in building genuine, long-lasting relationships – people need to meet on a common ground, doing something that they truly love together.”

Newaukee hosts incredible events for their members, billed on their website as Signature Experiences, such as Tournavation, a crowd-sourced idea generation platform that focuses on solving important issues that face the city of Milwaukee, and The Launch, a curated networking program featuring an exhibition of hiring companies and potential recruits on a boat.

Social Media Ready

Photo Ready FoodI am not suggesting you join Snapchat, but I am suggesting your event be worthy of posting on social media. Food choices, drink selections and choice of venue contribute to the quality of the event and the attractiveness of images to be shared. It’s not just enough to have a hashtag – consider experiences that young people can engage with and share on social media, such as a custom backdrop, or providing a station to make signs about why they love their community.

Also – make sure your events are being shared with the young people you are trying to engage. Social media is great for this but working with local online communities, such as blogs or message boards, will put your event in front of new eyes. Don’t forget community bulletin boards at coffee shops or bars – if your event flier is posted alongside music and art shows, that’s a good sign.

Don’t Go It Alone

To get maximum turnout from young folks at your events, engage them in the planning process – and in your organization. Start with asking young people to get involved in planning your events – ask for help in where to have them, and how to promote them. As they become more involved, ask them to join your committees or boards, or help them to create their own, Chamber-supported organizations.

For example, the group Connecticut Young Professionals was started in 2013 by a young person who was new to the state and has grown to more than 1,400 people. They hold events such as a non-profit pitch nights. In an interview, founder Faris Virani explains how he tailors events and messaging to his membership:

Growing up in the digital age, millennials are used to getting information very efficiently, delivered quickly and with brevity. Our speakers realize that their job is almost to plant seeds, not necessarily convey all the information during your speech.

Create a Judgement Free Environment

Today’s young entrepreneurs are more likely to wear a hoodie, echoing Facebook founder Mark Zuckerberg, than a French cuff shirt reminiscent of Gordon Gekko. If you expect young people to wear different clothing to your event than what they wear to work every day, you’re doing it wrong. If you’re changing the venue and the programming of events, you might also consider specifying a dress code on your marketing – with friendly wording such as “Come as you are,” or Dress Code: Casual.

Take these suggestions and look at where your Chamber organization or networking program has room for growth. A good first step is to visit that brand new local brewery, coffee shop, or café and introduce yourself the old-fashioned way. Those authentic connections will take you a long way in connecting with the new generation of business owners.

Is the sky falling for U.S. retail?

Is it the Retail Apocalypse or simply Retail Restructuring?

There continues to be a great deal of apprehension about the retail sector. In June of 2017, Business Insider tallied more than 5,000 store closures with a projection of nearly 9,000 store closures by the end of 2017. Fourth Economy has mapped more than 1,700 of these closings across the United States. Traditional brick and mortar retail faces a fundamental challenge from shifts in consumer preferences and advances in online shopping and delivery services. The store closings are the physical manifestation of the challenges facing the retail sector, which often can leave significant redevelopment challenges for local community and economic development officials.

Despite the headlines and the hysteria, overall retail has been adding jobs. Job losses occurring over the last year may be a warning sign, but it is too early to tell. Fourth Economy created a dashboard to track three key statistics.

 

  • Overall retail employment
  • Jobs gains and losses from opening, expanding, closing and contracting
  • Worker separation and hires

 

At this point, the data on retail employment does not indicate a “Retail Apocalypse.” Over the long run, retail has been very volatile and the impact of the recession created a greater disruption than we are seeing now. What is portrayed in the media reflects a shift within retail. Over the past year there have been significant losses in general merchandise, and five other retail categories. These stores represent many of the traditional brands in brick and mortar stores.

 

Sep 2016 Sep 2017 Change
General merchandise stores 3,188,600 3,130,700 -57,900
Clothing & clothing accessories stores 1,351,800 1,321,100 -30,700
Food & beverage stores 3,096,200 3,067,400 -28,800
Electronics & appliance stores 530,200 502,100 -28,100
Sporting goods, hobby, book, & music stores 618,700 601,200 -17,500
Health & personal care stores 1,051,800 1,048,000 -3,800

 

Other categories of retail are increasing, with nonstore retailers (Amazon) leading the way. Gains have also occurred in motor vehicle and parts dealers as well as building material and garden supplies. These gains were not enough to offset the losing categories, but it shows that the retail sector should not be painted with a broad brush.

 

Sep 2016 Sep 2017 Change
Nonstore retailers 539,700 570,100 30,400
Motor vehicle and parts dealers 1,988,600 2,012,900 24,300
Building material and garden supply stores 1,279,100 1,296,600 17,500
Gasoline stations 932,400 940,500 8,100
Furniture and home furnishings stores 477,100 484,000 6,900
Miscellaneous store retailers 833,200 834,400 1,200

 

 

Even if retail is experiencing some short-term declines that portend larger losses to come, there are other segments of the service sector that are adding significant numbers of jobs. The 156,100 jobs added in food services and drinking places is nearly double the job loss in retail.

 

Sep 2016 Sep 2017 Change
Food services and drinking places 11,499,000 11,655,100 156,100
Personal and laundry services 1,458,500 1,491,700 33,200
Amusements, gambling, and recreation 1,616,200 1,635,300 19,100
Museums, historical sites, and similar institutions 161,500 168,600 7,100
Repair and maintenance 1,288,000 1,292,400 4,400
Accommodation 1,950,200 1,954,000 3,800
Performing arts and spectator sports 457,500 459,700 2,200

 

The dire forecasts are overblown. Consumers are shifting from commodities to experiences and many analysts say that retail’s future is to provide more than merchandise. This is as much about where the service is provided as how it is provided. Neighborhood level (Main Street) retail also appears to be adapting to these trends. People looking for and returning to walkable communities has helped, but so has the ability of “Mom and Pop” stores to differentiate through service and quality rather than low prices. The emphasis on more services, entertainment and food has also helped Main Street retail. Recent data on the performance of small retailers is not available at this time,  so it is not possible to fully evaluate these trends but it appears that the dominance of big box and superstore retailers is being challenged on two fronts – online and on Main Street.

 

The End is Near…

The end is near…the year end of course.

Like most of you we’ve been reflecting a little and recognizing what an exciting year it has been. We wanted to share some of our highlights:

With the Cloudburst group, kicked off the development of a Housing and Economic Development plan for Takoma Park, MD.
100 Resilient Cities partnership with the Rockefeller Foundation.
Fourth Economy partnered with Mongalo-Winston Consulting on a public engagement process for the Pittsburgh Land Bank’s Policies and Procedures.

January

We began the year talking about our newly announced partnership with the 100 Resilient Cities Initiative, powered by the Rockefeller Foundation. Our Region’s Business, a Southwestern Pennsylvania new program featured Chelsea and Rich discussing their role as a Platform Partner and what it means for our work and the Pittsburgh region. You can check them out HERE.

Fourth Economy completed a Pay for Success feasibility study for Enviro Social Capital to assess the potential for green infrastructure to be supported by this innovative financing model. The Fourth Economy team developed a financial model for a potential transaction, identified key stakeholders who would need to be engaged, and modeled three scenarios based on our analysis. This work is currently being used by the project team in continued conversations with stakeholders.

February

Completed the business district analysis and projections for the Homewood business district for Operation Better Block (Pittsburgh, PA).

March

Fourth Economy, as a sub-consultant to the Cloudburst Group, kicked off the development of a Housing and Economic Development plan for Takoma Park, MD.

Also in March, Fourth Economy partnered with Mongalo-Winston Consulting on a public engagement process for the Pittsburgh Land Bank’s Policies and Procedures, which must be completed before the Land Bank can be fully operational. You can read the full report on public feedback here.

Rebecca Bagley addresses Life Sciences Week attendees.
Pirates Opening Day
Fourth Economy staff enjoying Pirates opening day.
Kick off to our Agents of Change happy hour!
Fourth Economy kicked-off our engagement with the Indianapolis MPO.

April

Not to let a little weather get in the way of some team fun, we participated in our annual Pirates baseball Opening Day outing to PNC Park. The impressive snow squalls that kept rolling in did not deter us, but may have caused us to think that maybe Spring training would be a better outing next year.

May

This month we supported the University of Pittsburgh in the launch of the inaugural Life Sciences Week. Our team helped create the website and materials for a variety of presentations. During the week our sector analysis, Life Science Opportunity Analysis was published and provided a base for ongoing conversations in the community.

June

We hosted our first Agents of Change meetup event for community leaders from a variety of backgrounds to get together in a free form conversation about how we can achieve greater  impacts in the region. To join us – sign up here!

Our team was selected to serve as the inaugural One Stop Operator for the Pittsburgh/Allegheny County CareerLink. This new position was created following changes to the federal Workforce Innovation Opportunity Act. This is a big responsibility and an awesome way for us to help advance this critical community network. To date, we’ve worked with the seven partners who provide services through the CareerLink to create a common vision and mission, and to establish goals and related working groups to enhance collaboration and service delivery.

Fourth Economy kicked-off our engagement with the Indianapolis MPO. Since then we’ve engaged hundreds of stakeholders throughout the 9-county region to help the MPO determine how they can best support other regional planning needs, such as economic development, water quality and supply, land use, and housing.  

July

The team completed a strategic planning engagement with Interise. This engagement opened our eyes to the world of small business training programs and how important they are for growth and resilience in our urban centers. Interise licenses their Streetwise ‘MBA” to partners who deliver it through their own locally branded programs. This training provides small business owners with the knowledge know-how, and networks they need to achieve scale. We strongly encourage our economic and community development friends to look into Interise to see how you may partner.

The Indiana Regional Cities Initiative received a SIlver Award for Cross Border Collaboration by the International Economic Development Council. The Fourth Economy team supported the Indiana Economic Development Corporation in the development of this initiative.

We joined 500 practitioners in New York City for the 100 Resilient Cities – Urban Resilience Summit. Fourth Economy is the only domestic community and economic development platform partner for this the 100 Resilient Cities Initiative.

Fourth Economy completed the market analysis and business plan for University of Pittsburgh’s GRID Institute.

Building on five years of modeling, Fourth Economy released the 2017 Fourth Economy Community Index. The Fourth Economy Community Index highlights counties that are poised to achieve sustainable growth in a 21st-century economy. We examine five areas: Investment, Talent, Sustainability, Place, and Diversity because we know they cultivate better communities and stronger economies. We believe the right metrics identify responsible and resilient growth, and you can read more about the great economic development stories that the data unearthed here.

August

Chris Ellis contributed to Robert Wood Johnson Foundation’s inaugural volume of a publication series intended to catalyze discussion, engage new partners, and inspire action to build a Culture of Health in America. The book is titled Knowledge to Action: Accelerating Progress in Health, Well-Being, and Equity. The chapter focuses on public, private, and nonprofit partnerships and examines the impact of these partnerships by highlighting Utah’s Pay for Success transaction that expanded access to high-quality preschool services for low-income children.

We joined 500 practitioners in New York City for the 100 Resilient Cities – Urban Resilience Summit.

September

The Indiana Regional Cities Initiative received a Silver Award for Cross Border Collaboration by the International Economic Development Council. The Fourth Economy team supported the Indiana Economic Development Corporation in the development of this initiative. “Fourth Economy supported our vision with a creative and engaged planning process that allowed us to launch the Regional Cities Initiative on solid footing and achieve quick success.” –Eric Doden former CEO for the Indiana Economic Development Corporation.

Also in September, we recognized a few of our Fourth Economy Community Index Top 10 Communities while we were all participating at the IEDC conference.

Rich Overmoyer, presented at the Talent Infrastructure Summit in Evansville, Indiana. Rich presented a response to the question “Does place matter and why should we invest in it”. The Summit led by the Economic Development Coalition of Southwest Indiana was a rallying point for community leaders to think differently about their community, the recruitment of talent and the risks and opportunities ahead.

And finally, Emily was one of two presenters at a two-day IEDC training course in Frostburg, Maryland entitled, “Economic Development for Local Leaders,” covering strategic thinking, revitalization, and workforce development for a group of about 35 leaders in the western Maryland region.

Rich and Chris authored an article that was published in Green Building Alliance’s annual publication, Viride.
Fourth Economy hosted a Lunch and Learn with Majestic Lane, Deputy Chief of Neighborhood Empowerment for the City of Pittsburgh.

October

Completed a market analysis report for Ascender, a hub for Pittsburgh’s starters and builders that provides programming, insight and connectivity. This coworking space is part of a growing movement that we are seeing around the country. For more information on the way that coworking is being discussed see here.

This month we traveled to Gary, IN to kick-off their comprehensive plan. We are super fans of the team in Gary and the innovative approach that they are taking to this process. Read more about it here.

Fourth Economy has been working with Rhode Island’s Polaris Manufacturing Extension Partnership for several years to design and launch the Innovation Center for Design and Manufacturing. As part of that, we helped to develop a Design Readiness Assessment to help manufacturer’s assess their capacity to use design to enhance innovation in their company. This month marked the 50th company who participated in the Design Readiness Assessment process.

Rich and Chris authored an article that was published in Green Building Alliance’s annual publication, Viride. The article is titled Social Change: Refinanced and discussed the potential of impact investing.

Rich spoke at the Inspire Speaker Series event focused on Social Impact and Investing. Fourth Economy is a multi-year sponsor of the Inspire Speaker Series, as it aligns well with our mission to bring together different groups to collaborate on community transformation. You can learn more and sign up HERE.

Fourth Economy hosted a Lunch and Learn with Majestic Lane, Deputy Chief of Neighborhood Empowerment for the City of Pittsburgh to learn about his involvement with PlaceLab and how that will influence “Ethical Redevelopment” in Pittsburgh.

The Franklin County Energy Study was released for public comment. The study provides a data-driven assessment of energy use and production across key sectors of the economy in order to establish a baseline and identify issues and opportunities.

November

The Lancaster Economic Development Company began its efforts to increase informed decision making in the region with two new reports from the Center for Regional Analysis prepared by Fourth Economy.  More than 400 regional leaders were on hand at the annual meeting to test their knowledge of the region and the role played by agriculture and manufacturing.

Fourth Economy and Palo Alto Partners worked together to support Just Harvest and Economic Development South in planning for a fresh foods market in Clairton, a community outside of Pittsburgh. Providing a need and opportunity assessment, market analysis, site and market feasibility study, and business planning, the team identified what it would take to transform the community’s vision for fresh foods into a reality. The report is being used by the community to make strategic decisions as the market comes closer to fruition.

We began working with Lawrenceville Corporation, a local community development organization, on their Community Land Trust (CLT). A CLT is a powerful tool that Lawrenceville Corporation is using to help preserve housing affordability in their neighborhood, and Fourth Economy is helping the CLT assess long-term financial planning options.

December

Jerry served as a member of the technical assistance team and the National League of Cities Equitable Economic Development Fellows on the Nashville site visit.

Jerry worked with a 14-member technical assistance for the National League of Cities Equitable Economic Development Fellowship to advise Nashville on strategies for affordable housing, economic inclusion and promoting urban manufacturing. Recommendations were delivered to Mayor Megan Barry and city staff on December 8.