Defining an economic development agenda that surpasses election cycles and individual agendas is a tall order. But is it one we cannot shy away from. Funding for economic development at all levels is waning, and successful efforts now require the cobbling together of a variety of resources that often come attached to a set of institutional or individual agendas. This means that getting everyone on the same page and pointed in the same direction is increasingly critical to successful execution. Enter the convening agency – cities, non-profits, business improvement districts, etc. - these organizations will increasingly play an outsized role in leading these efforts in partnership with the private sector.
Perhaps the most critical step in the planning process comes at the beginning, first by engaging participants and leaders and second by providing them with market and asset information they need to come to consensus around a set of viable strategies. With this lens in mind, we share our own thoughts on these two important fundamentals - and highlight our favorite quotes from the Brookings report that reinforce the value getting started on the right foot.
Fundamental #1: Great planning and execution begins with a "Diagnostic" - an understanding of an area’s unique "Strategic Position" and "Market Assessment"
“Undertaking transformative economic change requires developing a sense of urgency and high visibility. That starts with an economic narrative grounded in hard data and clear-sighted assessment of the region’s competitive strengths and weaknesses”We couldn't agree more. Successful planning means taking a cold hard look at your assets and how they can serve as a viable starting point for partnerships and investments. Why is this step so critical? Because it allows for smarter decision making around the allocation of limited resources. Consider the downtown that borders a major educational institution or hospital (Pittsburgh is a great model of how "eds and meds" can play a major role in revitalization). These anchors are significant assets who are in a good position to drive investment overtime. Engaging these partners begins with understanding their needs and interests.
Brookings argues that this asset assessment is predicated on the identification of industry clusters that form a “unique foundation of regional economies”. These clusters exist because of a set of conditions in your community and region. At LOA we call these conditions the "DNA of place". By identifying your community's unique strengths, as well as competitive needs, you are in a position to understand opportunities you have to differentiate yourself in the regional marketplace. This in turn informs the kinds of improvements and policies that serve as the basis of your economic development strategies.
“economic development is most effective—and cost-effective—when it focuses on improving the shared assets that support clusters and advanced industries, rather than providing subsidies”The Diagnostic is where you take stock of the opportunities you have to build on existing assets, identify challenges that may stand in the way, and develop a deeper understanding of market dynamics and trends that will shape your policies. When we work with communities, the outcome of the Diagnostic is a “Strategic Positioning Statement” - a clear vision that communicates a vision deeply rooted in market reality, one that identifies strengths and serves to differentiate the community from its competitors. A strategic position for a commercial district or downtown, for instance, will clearly state not only the facts on the ground, things like consumer lifestyle, price point and tenant mix, but also a clear vision of what the community would like to be. This stage is critical, because a strategic positioning statement offers a “true north” for all the economic development initiatives to follow.
“Data can dispel illusions and overcome complacency. Lack of solid data and analytic capacity can stymie regions at this initial stage. Establishing a common economic narrative brings leaders and the community together to mobilize action.”Sometimes the information that emerges from a Diagnostic is sobering. I recently worked with a community that was working on a master plan. I came in a bit late in the process and noted that the recommendations on the table included suggestions for retail in each of the five subdistricts identified in the plan. The problem was, the entire area - a few square miles - could only support enough demand for around 60,000 sf of retail - even in the best case scenario. Scattering small retail around a very large geographic area would do little to create the business density necessary for businesses to succeed.
Fundamental #2: There is no substitute for capacity and leadership at the outset
“Regions that create high-level steering committees composed of corporate, political, and philanthropic leaders, joined with broadly representative community partners, are better positioned to succeed—and to survive inevitable transitions in leadership. Without visible champions, such as prominent co-chairs, to reinforce the sense of urgency and centrality, even well designed plans can founder or get lost amid other initiatives.”The absence of capacity and leadership is often what kills many an economic development initiative. Consultants may provide expert insight and direction, but without diverse leadership among public and private sector partners, and a plan of action that is reflective of their input and commitment of time and resources, the plans more often than not up sitting on the proverbial shelf.
“leaders must start with the basics: a firm grasp of both the markets and the civics required, which equally under gird this economic development framework”Once a market understanding is in place, a diverse group of leaders must be engaged and committed to defining the goals and strategies that emerge from the Diagnostic phase. Brookings recommends that the economic development planning process offer both long-term goals and shorter-term metrics for success. In the short-term, visible success is an important in building legitimacy for the effort. Funders and partners will see those early successes and come to the table with deeper confidence in the ability to execute on the larger vision and strategies that may be more complicated and resource intensive.
“put an end to the hero economy”I love this quote - it might just be my favorite in the report. I have found that while a single charismatic leader is a great thing to have, it does not replace the need for meaningful partnerships and resources above and beyond what any one individual can deliver. Ideally, the Diagnostic results in a collective agreement that includes clear cut set of goals that reflect a strong, market-informed strategic position for the community, as well as a set of initiatives linked to a set of clear expectations and deliverables by all parties.
At LOA, we work hard to help communities define their assets and understand their markets. Over the years we have found that our work and findings gain traction when they are part of planning processes that engage participants in active dialogue. This is not about a consultant team telling you what to do, but rather a consultant team that advises and engages in conversation about what strategies make the most sense based on both market information as well as what partners are willing to contribute in the form of time and resources to a set of mutually agreed upon economic development outcomes. We find that when our clients lead a participatory process, we end client engagements with much more confidence in the outcomes that will emerge from the planning effort.
But getting started on the right foot is easier said than done. In an economic environment that is increasingly complex, one defined not by political boundaries but by industry clusters and regions, there is no short cut to defining economic development strategies with long term staying power.