I recently participated in the State Science and Technology Institute annual conference. These conferences are always a great chance to connect with peers around the country but also to reflect on what is ahead for us all. It was exciting to see a diverse group and a significant number of first-time attendees. This is a great demonstration of new energy in the organization and the network of people looking to make a difference.
As I traveled home I started to reflect on three takeaways that I want to explore more as I reflect on the past year and look to 2019.
First, we are not doing enough! There was a healthy amount of commentary and discussion on the reality that while some of the simple economic indicators are positive, the vast majority of the underlying data – especially the indicators used to look at the future – education attainment, indebtedness, net financial worth, poverty rates, climate change, etc. are all really bad. We can not get distracted by the soundbites of economic strength, we must focus on the economic stresses that exist at some level in every one of our communities.
Second, we need to collaborate even more! The stresses that our communities face are too much for any one organization to address, but many try. Whether it is the human nature to compete or a sense that financial support for mission-driven organizations is a zero-sum game, I continue to see a lack of collaboration.
Leslie Smith from Epicenter in Memphis and I hosted a breakout session on Network Leadership where we asked participants to role play. While some enjoyed the opportunity to get out of their own persona, many struggled to put themselves totally in the perspective of their role. It is not easy to relate to others, especially when their views about the past and future of a community differ. Our default is to often go back to our comfort zone of peers and own organization. By collaborating more, we gain the perspectives of others, resulting in stronger leadership and better solutions.
Third, we should get together more! In the early days of Fourth Economy, we created this image to represent the drivers and assets of the fourth economy. In many ways, we have been pioneers in ‘preaching’ the virtues of broad-scale collaboration. What I’ve come to appreciate even more is that the People asset can be the greatest, but it can also be the most difficult barrier. If people are not able to build trust, empathy for one another, and a shared understanding of the past and vision for the future, we will not be able to do better. We will see some ride the economic peaks while many more become further from the opportunity. We will question what we could have done to prevent the next economic downturn or to help those in our community.
I’d rather not wait and will look for opportunities to push myself to get together with people in the communities that I work, live, and play to increase my own understanding of their vision and needs. I hope you consider doing the same.
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.
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!
Workforce is the underpinning of the three-legged stool of economic development. Without a strong workforce, there is no way to succeed at business attraction or retentionand no way to cultivate entrepreneurs. In economic development circles, the discussion around placemaking often centers on talent attraction. The thinking goes that top talent is attracted to places with high quality of life; businesses thrive on this talent and will expand and relocate to those places where talent flocks. So, in essence, places with a high quality of life are better for business.
A Change in Economic Forces
It used to be that a community’s economic success was dependent on some fixed competitive advantage such as access to natural resources or proclivity to a transportation network for moving goods. A good example is our firm’s hometown, Pittsburgh, located in an area rich in ore and coal to make steel and with access to three major rivers. Manufacturing created the economies of Pittsburgh and many other cities, but today, talent is the number one most important economic force. Sources from across the economic development spectrum tell us this. Nearly all the executives (95.1 percent) surveyed by Area Development in its 28th annual Corporate Survey rated availability of skilled labor as “very important” or “important” in their site selection factors. This factor is now considered more important than highway accessibility and labor costs, and certainly more important than incentives offered. We see this in Pittsburgh too, as companies such as Google and Facebook locating offices in town to be close to the graduates of the University of Pittsburgh and Carnegie Mellon University.
But talent is in short supply. Unemployment rates are falling, which means there are fewer people available for jobs. This is felt particularly hard in tech companies, which report a lack of talented workers with the skills needed for the rapidly evolving industry. Another benefit of attracting and retaining talented workers is that they are engines of innovation, whether from the inside of companies where they spearhead new ideas and spin off new divisions, or through entrepreneurship, forming their own enterprises and creating jobs. Attracting new talent is essential, and the best way to bring in high quality people is to offer a high quality of place.
Beyond the Baseline of Quality Markers
Quality of place means many things. A more traditional definition includes low crime rates, good housing stock, great schools, and local culture and recreation. But the cities and regions that are really pulling ahead in the race for talent understand that the baseline is no longer good enough. Much has been made of the “return to the city” and how millennials and baby boomers prefer a dense, walkable environment where they can live, work and play (to the point where urban planning professionals roll their eyes at the catchphrase). But the proof is in the evidence. Cities that provide living space in multi-use areas connected by transit and surrounded by quality recreation outlets are seeing their attraction of talent skyrocket.
Take Denver for example. The city has bet large on placemaking, from the $1 billion revitalization of the historic downtown Union Station to a new light rail system. These investments, coupled with outdoor amenities and copious sunshine, have contributed to Denver being named by the Brookings Foundation as second in the nation for attracting millennials. But it’s not just large cities that benefit economically from increased quality of life via placemaking. Regions around the U.S. are shifting their focus from business attraction to talent attraction. In Northeast Indiana, the focus of the Northeast Indiana Regional Partnership is to attract new people to the area through improvements in downtowns, greenways and blue ways, arts and cultural assets, and education and industry through the Road to One Million plan (which Fourth Economy had a role in creating.)
Resiliency Means Quality of Place for All
Attracting and retaining talent is an essential component of economic development, but, it’s important to understand that placemaking does not mean only making places comfortable for highly skilled, highly paid employees. A well-designed place delivers quality of life to those at every age and income spectrum. Planning for all members of a population is what makes a place resilient and vibrant.
Providing affordable housing, especially in trendy inner-city neighborhoods, is a tough challenge and one that affects the workforce, especially for essential employees whose wages don’t begin to compare with highly paid tech workers. In places like New York, workers who make under $35,000 are increasingly being pushed out of formerly affordable neighborhoods to outer suburbs. When this happens, the financial and time cost of their commutes rise, cutting into already low wages. While particularly dire for service employees such as retail workers, this also affects teachers and police personnel.
From the placemaking perspective, increasing density leads to more options for housing across the spectrum, ideally situated in in-town neighborhoods that are walkable and served by transit. As the supply of housing increases in these desirable neighborhoods, the price decreases. One tactic to encourage denser development is to allow for “Missing Middle” housing to be developed. Missing Middle housing, a term coined by Opticos Design, is composed of a range of multi-unit or clustered housing types that are compatible in scale to single-family homes. Some examples include duplexes, carriage houses, townhouses, and accessory dwelling units. Allowing this type of development densifies neighborhoods and provides access to housing at a lower price point, without a significant disruption of neighborhood character.
Barriers to Small Scale Affordable Housing
Building Missing Middle housing is typically not undertaken by large developers, and therefore is built by property owners, small real estate developers, and community development corporations and financed by local banks. The margins of profit for Missing Middle housing are smaller so in order for these projects to be financially feasible, there must be a regulatory environment that permits these types of buildings. Most existing zoning codes separate housing types so that multi-family is not intermixed with single family and residential above retail is not allowed. This stunts Missing Middle housing by forcing projects to go through zoning hearings that extend the project timeline and cost to a point where construction is not feasible.
Allowing for small residential infill projects to be built not only provides more options for affordable housing, it allows property owners to benefit from rising housing costs, and alleviates increased property taxes. Of course, to truly provide benefit, increased density needs to be coupled with transit to access jobs and services.
A Connected Workforce
Placemaking is a term that can be misconstrued to simply mean making communities more beautiful. While placemaking tactics such as downtown development, street scaping, and encouraging traditionally affordable housing types does improve a community’s aesthetics, if done properly, placemaking can unlock significant economic value. Connected, vibrant communities with a multitude of housing and transportation options return the best value to inhabitants, creating places that workers are attached to and invested in.
At Fourth Economy we have been tracking the news about retail store closures. These store closures often can leave significant redevelopment challenges for local community and economic development officials. In future posts we will highlights some of the ways that communities are dealing with these buildings. According to Business Insider more than 5,000 store closures have been announced so far, with the potential for nearly 9,000 store closures by the end of 2017. These store closings are the most physical manifestation of the challenges facing the retail sector.
As a resource to the community, Fourth Economy has started to identify and compile a list of retail store closings. Tracking down the locations has proven to be a challenge, but we have identified 1,768 of these closings so far. You can see the results in the above Working Map of Retail Closings, created in Tableau Public. We are providing this as a resource to the community and will continue to update it as closings are announced and locations identified. If you know of any closings in your area, please send them to email@example.com and we will update the map.
Stay tuned for more.
Recent podcasts about the benefits and drawbacks of nostalgia got me thinking about this human experience, its influence on communities, and what this means for community developers. I believe nostalgia can help create community, but prolonged nostalgia can be detrimental to a community’s ability to adapt and thrive. Community developers should recognize the value of a community’s collective nostalgia, but they should also work with communities to build upon this legacy and develop an inclusive story of the future. Pittsburgh, like many communities across the U.S., may benefit from this approach. Continue reading “Nostalgia: Community Development Friend or Foe? Pittsburgh as a Case Study”
It’s All About the Distance. Or is It?
Sure, power contributes to your ability to hit a home run, but it’s also the mechanics of how you swing that can take the ball farther. Many community and economic development initiatives throw a lot of money (power) at an issue without an understanding of the underlying issues and opportunities. A better approach is to use community input combined with real-time data to better understand the current local mechanics and what forms of investment (money and time) it will take to support change. Continue reading “5 Lessons From the MLB All-Star Game for Economic Opportunity Pursuits”
Guest Blog by Sarah Treuhaft, Director of Equitable Growth Initiatives, PolicyLink
It is another summer in which America’s deep racial fault lines are being painfully exposed. Following the horrific violence in Baton Rouge, Falcon Heights, and Dallas, in a July 8 poll seven in ten Americans said race relations are “generally bad.” A National League of cities analysis of one hundred “state of the city” speeches from 2016 found that mayors increasingly view racism and inequities as major threats to progress in their cities.
Continue reading “Embedding Equity Into Economic Development”
City governments have experienced increasing financial strain over the past several decades – pension payments are coming due, infrastructure needs replacing, and the cost of providing social services is increasing. This leaves little room for local governments to get on the social finance innovation train that has been sweeping the private sector for the past few decades, where bright minds have been exploring social enterprise, low-profit limited liability companies, impact investment, and more. However, many have recognized the importance of bridging the gap between private sector innovation and government, leading to organizations across the sectors investing time and money devising ideas that may fill this void. Continue reading “How the Private Sector is Paying for Public Innovation”
Recently, The National Institute of Standards and Technology (NIST) announced the competition to award its first National Manufacturing Innovation Institute (NMII). Proposers may focus on any advanced manufacturing technology area not already addressed by another institute or open competition. Seven institutes have been funded to date with two currently moving through the review and negotiation process. After attending the Proposer Day session on March 8, 2016, it is clear that many proposal teams have already been formed. Continue reading “NIST Announces NMII Competition”
To many Americans, Canada is our friendly neighbor to the north, known for an affable attitude, a passion for pucks and a penchant for strong beer. What is perhaps less known is how critical trade with Canada is to the economy of the United States. Consider:
- Nearly 9 million U.S. jobs depend on trade and investment with Canada
- Canada is the top export destination for 35 states
- Canada is the number one supplier of crude oil, refined petroleum products, natural gas,
and electricity to the U.S. as well as a
leading supplier of uranium
- 400,000 people cross the Canada–U.S. border daily