Recently, I had the opportunity to spend a day with local economic development leaders from across the country to explore the role of economic development organizations (EDOs) in achieving more inclusive growth. The strong interest in the meeting suggests that a lot of EDOs are wrestling with this question.
I, too, have been wrestling with this question for some time now, and I’ve come to a few conclusions about what works and what doesn’t that might be useful to others heading down this path.
First, EDOs have a vital role to play in achieving inclusive growth. Traditionally, inclusive growth efforts have mainly focused on inclusion and taken growth for granted. As a result, their main concern has been (and continues to be) making sure that nobody gets left out or left behind.
However, job growth can no longer be taken for granted, particularly when it comes to good jobs, which are in short supply in many communities. Until that problem gets fixed, economic opportunities will remain limited for low-income residents despite the best efforts of those working on their behalf. And gains for some residents will necessarily come at the expense of others as existing job opportunities simply get redistributed.
So, as civic-minded EDOs get more involved in inclusion efforts (which is commendable), it’s important that they not lose sight of their distinctive role in growing good jobs for all who need them, which is vital to expanding economic opportunities more broadly.
Second, inclusive growth is not an add-on to business as usual. A number of EDOs I’ve worked with initially organized their work on inclusive growth as a special project layered on top of existing systems. However, most soon realized that they weren’t going to get very far that way.
For one thing, they realized that their inclusive growth projects were too limited in scope and scale to make much difference. They also realized that their existing systems were actually getting in the way of inclusive growth and were wasting valuable resources that could be put to more productive uses.
So, many EDOs have been rethinking and retooling their existing systems to deliver more inclusive growth. In other words, changing the way they do business.
The new systems that are starting to emerge have two main features in common. The first is that they focus on leveraging existing assets to grow new jobs from within the region. And the second is that they consciously forge much closer links between economic, workforce, and community development, as well as transportation and land use planning.
The Fund for Our Economic Future has developed a simple graphic that captures this emerging framework for inclusive economic development (which they call “Growth & Opportunity”). The focus is on creating good jobs, while helping people prepare for and gain access to those jobs.
Third, inclusive growth requires a good ground game. When it comes to making change, people tend to get distracted by shiny new objects, but often what they really need is sitting right under their noses. I’ve concluded that’s the case with growing good jobs.
A growing body of evidence suggests that the vast majority of new jobs come from firms within the region, and the vast majority of those jobs come from a relatively small number of high-growth firms. So, the key to growing good jobs is to find the firms with the most untapped potential to grow good jobs, then work with them to unlock their growth potential. In other words, a good ground game.
A good ground game requires gathering the right information from the right people in the right firms, then analyzing that information to identify where the least amount of effort could make the biggest difference in supporting the growth of those firms. And it requires building capacity at the local and regional level to provide the right assistance to the right firms at the right time. If those fundamentals aren’t in place, economic development efforts are going to be hit or miss.
In addition, the information gained from a good ground game is critical to designing effective systems to help people prepare for and gain access to good jobs, which puts a good ground game in the sweet spot where job creation, job preparation, and job access intersect.
So, if EDOs are looking for ways to achieve more inclusive growth, I suggest that a good place to start would be to work on their ground game.
Pete Carlson is president of Regional Growth Strategies