Describing a Collaborative Regional Economic Development Framework

Module 1
Module
Describing a Collaborative Regional Economic Development Framework

Objectives
*Defining Economic Development *Making the case for regional planning *Defining principles for regional planning *Identifying & overcoming obstacles

Leading the Planning Effort

Detecting Regional Advantage

Formulating Strategies

Executing Your Plan

Objectives
I. II. III. Define and understand key aspects of economic development Make the case for conducting a regional strategy in a globally competitive environment Define principles for collaborative regional economic development planning framework

IV. Identify mechanisms for overcoming obstacles to the collaborative regional economic development planning framework

I. Definition of Economic Development

Defining Economic Development
Group Discussion

• How do you define economic development? • Why do you do economic development? • What is economic development success?
– Whose behavior are we trying to influence? – What would happen anyway?

Conflicting Philosophies?
• Economic development aims to accomplish sometimes contradictory goals…
– Create jobs – Create wealth

• How we accomplish economic development involves conflicting approaches that…
– Exploit our existing economic strengths – Create new economic strengths

• Economic development that actually accomplishes change must primarily engage…
– The corporate, government, and academic leaders – Grassroots citizens and community organizations

II. Make the Case for Conducting a Regional Strategy in a Globally Competitive Environment

10 Mega-Trends in the Global Economy
!Service has become (and will remain) the dominant " competitive differentiator in much of the economy #" Knowledge-intensive activities have the highest value and demand increasing knowledge, skills, and abilities $" Work is polarizing in which wages tend to reflect knowledge, skills, and abilities % Outsourcing divides “value-chain” functions into more " productive, interdependent activities &" workforce is aging and increasingly replacement talent The must come from elsewhere

10 Mega-Trends in the Global Economy (cont.)
'" growth occurs as firms find (or re-find) economic value in Job the marketplace ( Industrial transitions are happening more quickly as product life " cycles shorten ) Reduced transportation and telecommunication costs contribute " to the increased importance of logistics in meeting the shortening timeframes allowed to move goods and information * Regions and communities are becoming more specialized and " connected to other non-contiguous places ! Places are more frequently connecting to places with + " complementary specializations

10 Mega-Trends for Economic Developers
! Leaders continue to emphasize job creation as the ultimate goal " for economic development #" Many public sector leaders still understand economic development strategies in the three “waves”—which focus on companies rather than industries $" Private leadership is changing due to…
• • • Loss of corporate headquarters and priorities of branch plants Focus on the global “value-chain” Difficulty in engaging entrepreneurial leaders

% Traditional economic development doesn’t work well with fewer " “large” opportunities &" Economic development “wins” frequently result from large public investments

10 Mega-trends for Economic Developers (cont.)
'" Businesses increasingly incorporating incentives in their business location calculus ( Public investors are becoming more concerned about the " effectiveness/transparency of public investments ) Economic developers require new skills… "
• • • Focus less on making “sales” and more on conducting “market intelligence” Facilitate linkages among a fragmented network of participants Focus on the community or region “product” comprehensively

* Economic developers are realizing that “workforce talent” can be " an important competitive differentiator ! Economic development is undergoing a + " generational shift that will likely transform the profession

Implications from these trends
• • • • • Regionalism matters! Flexibility matters Context matters Process matters (planning is not an event) Success requires capacity, buy-in, and legitimacy • Mindsets must be aligned to new realities of what works in economic development

Implications from these trends
• Continuous search for the next economic opportunity and understanding the state of current industries • Need comprehensive view of development that links economic development with workforce development and education • Consider collaborative and sustainable systems for implementing economic development

Lessons from economic and economic development trends
• Successful places have…
– Leaders that recognize the new realities of how economic development works – Regional ties that help to create a larger number of opportunities – A recognition that opportunities arise within a global economic context for which leaders can be prepared – An understanding of their current industry strengths and weaknesses – Flexibility and adaptability that will allow improved response to opportunities

Lessons from economic and economic development trends (cont.)
• Successful places have…
– Buy-in and legitimacy for that preparation – The capacity to respond (in terms of appropriate assets and skilled professionals to facilitate) well before opportunities present themselves – A comprehensive view of development that links economic development with community, workforce, and education – A mechanism for continuously searching for the next economic opportunities – A way to evaluate whether past efforts have made a substantial impact on the economic well-being of the citizenry

Rationale for Collaborative Regional Economic Development Planning Framework
• Every place needs to implement a planning process that provides a mechanism for continuously assessing opportunities in light of economic change and leadership priorities and decisions • In such a complex and ever-changing environment, every place must consider systems that foster collaboration and sustainability – IN A REGIONAL CONTEXT

III. Define Principles for Collaborative Regional Economic Development Planning Framework

Core Principles for the Collaborative Regional Economic Development Planning Framework
• Vision • Collaboration • Regionalism • Opportunistic • Iterative • Holistic • Fact-Based • Continuous Improvement • Prioritization • Communication

Core Principle: Builds on a Clear Vision
• Definition
– Clear description (“image”) of a preferred future state with “regional prosperity” clearly defined – Significantly different from the current state – Identifies “impactful” intervention

• Why this is important
– Inertia may lead to a less than optimal future state – Multiple options for a “preferred” future state – Many interventions have little impact or wrong impact

Core Principle: Builds on a clear vision
• Imagine Tucson as an example

Core Principle: Collaborates Across “Silos”
• Definition
– Process of working together with many public and private stakeholders – Working with stakeholders in different but noncontiguous places that are linked to yours – Multi-disciplinary (across “policy domains”)

• Why this is important
– Realize that the kinds of collaboration depend on economic conditions and competitive advantages – Challenges faced involve economic and noneconomic factors – No “silver bullet”

Core Principle EXAMPLE: Collaborates Across “Silos”
• Futures 4 Kids • Alliance for Quality Education

Core Principle: Engages Regional Participation
• Definition – Geographic boundaries of the planning area – Different types of “regions” – Relationship with place and region

• Why this is important
– Context of economic trends focus on the competitive position of the region within a global context – Planning “too small” may have very little impact on the “future state”

Core Principle EXAMPLE: Engages Regional Participation
• Vision East
– 41 counties in eastern North Carolina – Focus on military, tourism, agriculture, advanced manufacturing, and entrepreneurship

• Texoma Regional Consortium
– 13 counties in northern Texas and southern Oklahoma – Focus on advanced manufacturing, and entrepreneurship

• Montana’s Agro-Energy Plan
– 32 counties and six Indian Reservations – Focus on bio-products and renewable energy development as tool for rural entrepreneurship

Core Principle: Exploits Unforeseen Opportunities
• Definition
– Requirement to continuously adjust to local conditions and external factors – Need for flexibility in response

• Why this is important
– Current situation will not match any one vision of how the world works – Possibility of unforeseen opportunities

Core Principle EXAMPLE: Exploits Unforeseen Opportunities
• NC Center for Engineering Technology • Science Foundation Arizona

Core Principle: Makes Iterative Changes
• Definition
– Experimental efforts to try new strategies and tactics – Experiential in learning from one’s own lessons as well as those of others

• Why this is important
– The complexity of variables require trying multiple approaches to influencing behavior

Core Principle EXAMPLE: Makes Iterative Changes
• Innovation Frontier Arizona • Pacific Mountain Washington

Core Principle: Embraces a Holistic Response
• Definition
– Systemic approach to fostering development – Multiple policy domains (e.g., workforce, community, education, etc.) interact

• Why this is important
– Recognition that economic development is influenced by a broad array of investments – Behaviors of businesses and/or talent increasingly respond to non-economic stimuli

Core Principle EXAMPLE: Embraces a Holistic Response
• Pittsburgh
– “The College City” brand
- Helping talented students consider their college choices

– www.campusvisit.com
- Helping college bound visitors find their way

– Experience Pittsburgh
- Helping college students become connected to the city

– Building Bridges
- Helping Pittsburgh college students find jobs

Core Principle: Relies on Facts
• Definition
– Historically, economic development was driven by relationships, opinions, perceptions, and emotional considerations – Increasingly, multiple decision makers involved and logic (e.g., cost considerations or market pressures) shape investment decisions – Places have learned more about how businesses make investment decisions based on behavioral patterns – Internal and external factors influence those behaviors

• Why this is important
– Know what is – Know what others are doing – Know how to respond or compete

Core Principle EXAMPLE: Relies on facts
Net Employment Change in the Nashville Economic Market
(June 2001 to June 2006)
OKLAHOMA CITY

15K 7.5K 2.5K Net New Employment
0 Miles 20
35

Commuting Patterns in the Texoma Region
(US Census Bureau, 2000)

Ada

4,000 Commuters
Ardmore
70 75 70

2,000 Commuters 500 Commuters < 500 Commuters

*Employment in Maury County declined by 539 between June 2001 and June 2006 Source: US Bureau of Labor Statistics

82

Sherman

82

El Paso Workforce Dev Board Area Value Chain Clusters $50,000
Concrete, brick buildin products 2,115 Business servic 41,445 Arts and media 17,789 Basic health servic 42,938 Wood building products 2,5 Appliances 3,692

35

75

DALLAS

0

Miles

30

Concentration (LQ 2004)

$40,000

$30,000

Plastics produc 2,068

Textiles & apparel 3,948

$20,000

Financial services & insuran 25,814 Constructio 11,329 Hotels & transportat services 41,605

Average Wage = $24,641

$10,000

Farming* 1,614

Green=Existing Blue=Emerging Orange=Potential 2.50 3.00

$0 0.00 0.50 1.00 1.50 2.00

Concentration (LQ 2004)

Average Wage (2004)

Core Principle: Improves Continuously
• Definition
– Benchmark to and borrow from best practices – Evaluates how well the plan and actions are working toward improving the “baseline”

• Why this is important
– Competition for limited resources – Improve “productivity”

Core Principle EXAMPLE: Improves continuously
• Maine Economic Growth Council Measures of Growth • Joint Venture Silicon Valley

Core Principle: Sets Priorities
• Definition
– Economic development strategies must involve making hard choices about where resources will be invested

• Why this is important
– Limited resources – Increasing efficiency of impacts

Core Principle EXAMPLE: Sets Priorities
• Future Forward (western NC)
– 10 strategies related to…
• Improving connectivity (transportation and communications) • Improving the area’s workforce (through education and training) • Fostering innovation and entrepreneurship • Preparing for targeted market opportunities (e.g., appropriate sites for growth sectors) • Creating improved amenities for recreation and to appeal to relocating knowledge workers

Core Principle EXAMPLE: Sets Priorities (cont.)
• LancasterProspers (Lancaster, PA)
– 7 actions related to…
• • • • • Fostering regional cooperation Improving the area’s understanding of its economy Supporting research and entrepreneurship Developing its urban centers as centers of activity Creating industry centers of excellence, including support for related talent development

Core Principle: Communicates with Stakeholders
• Provide opportunities for input • Ensure transparency • Validate input and decisions • Tell people about the priorities and key actions • Celebrate the success

Core Principle EXAMPLE: Communicates with Stakeholders
• Many methods
– – – – – – – Traditional written Video Web Blogs Speakers bureaus Economic summits Media

IV. Identify Mechanisms for Overcoming Key Obstacles to the Collaborative Regional Economic Development Planning Framework

Common Obstacles to the Collaborative Regional Economic Development Planning Framework
• Inertia
– Resistance to change – Fear of failure

• Politics
– Taxing structure – Leadership structure

• Culture
– Parochialism about problems – Culture of independence and self-sufficiency

• The “wrong” focus (limiting, narrow, or inadequate)
– Developing real estate – Assisting business enterprises – Obtaining return on investment

Overcoming obstacles to the collaborative RED planning approach
• Inertia
– Define a clear, compelling call to action

• Politics
– Define an undeniable mutual benefit from action

• Culture
– Appeal to the creed of independence and parochialism – that to help yourself, you must join with your neighbor

• Wrong focus
– Provide a convincing case that prosperity is not always captured in the traditional ways of thinking about economic development

Review, Questions and Discussions

12 Steps to Regional Prosperity

4 Major Planning Phases

Call the region to action Leading the Planning Effort Engage your leaders Define your geography Detecting Regional Advantage Identify your economic advantage Assess your assets & challenges Describe your future Formulating Strategies Define your actions Focus your energy Design your implementation plan Executing Leverage your resources Your Monitor your progress Plan Promote your success

Collaboration for Regional Engagement and Action to Transform an Economy

Collaborative Regional Economic Development Planning Framework: Overview Wrap-Up
• Articulated differences in economic development perspectives • Identified mega-trends affecting economic development efforts • Developed a rationale for collaborative regional economic development • Established key principles for collaborative regional economic development

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