- July 10, 2023
- Posted by: Erik
- Category: Newsletter
Welcome to the latest edition of EntreWorks Insights, a quarterly newsletter that reports on business trends, policy developments, and other issues affecting the business of economic and workforce development. You’re receiving this note because you’ve asked to subscribe or because you have some previous interest in the work of EntreWorks Consulting. If you wish to subscribe or be removed from this list, please send an email to info (at) entreworks.net. If you’re interested in the newsletter, please read on. Please feel free to share with friends, family, colleagues, and other loved ones. Comments and constructive criticism (and praise) are also welcome. You are also encouraged to visit the EntreWorks blog at http://entreworks.net/blog. Thanks for your interest.
Erik R. Pages
President
EntreWorks Consulting
EntreWorks Insights
Volume 20, Number 2
July 2023
HIGHLIGHTS: The New Economic Development Pivot: It’s About Talent
                           What’s New at EntreWorks Consulting?
The New Economic Development Pivot: It’s About Talent
Many of the past few editions of EntreWorks Insights have focused on talent development and attraction. That’s for good reasons, as the ability to develop, attract and retain talent is likely to become the new “three-legged stool†of economic development—replacing the old trinity of business attraction, new business development, and business retention and expansion. Because of the pandemic’s impacts and massive demographic shifts, businesses around the US (and the world) are struggling to find talented employees, managers, and leaders. This is likely to be our dominant economic development challenge over the next decade.
These statements are hardly revolutionary or unexpected. Most economic developers seem to be embracing the new reality, but these new perspectives have not yet been reflected in new ways of doing business. That seems to be changing now, and below we’ll dig deeper into how some states and localities are pivoting to situate talent as the key driver for future economic development investments and programs.
Most states and localities support robust workforce development and training programs, but these newer initiatives take on a more holistic approach to talent development and support. They sometimes embrace training programs, but they typically focus on other issues such as housing, childcare, and quality of life, appropriately assuming that talented people want to live in nice places with a wide range of amenities and things to do. Placemaking and quality of life are priorities for investment.
This emerging shift in economic development priorities is being driven by ongoing talent shortages, but it’s also backed by solid research suggesting that locations with high-quality of life (as measured by things such as housing quality/affordability, spending on public schools, and access to recreation amenities) perform better on most metrics of economic performance. These factors matter more than traditional measures of business-friendliness when it comes to positive economic outcomes. The basic message is simple: if you want to attract and retain talent, build a nice place to live!
How are these new directions being reflected in economic development practices? It’s still early, but some states and localities are shifting their priorities. Take Indiana for example. Back in 2021, Governor Eric Holcomb and other state leaders committed to investing $500 million into the READI program (Regional Economic Acceleration and Development Initiative). While the READI title sounds like a typical economic development program, its investment priorities are different. Most READI dollars are being invested in quality of life and quality of place-related projects. Examples include housing, childcare centers, recreational amenities, and the like. Projects in the Indiana Uplands region (an 11-county area surrounding Bloomington) offer a good sense of READI priorities. The current regional project list includes early education centers, a regional land bank program, several affordable housing programs, trails and parks in all 11 counties, and several new arts/performance venues.
Policymakers in Michigan also seem to be debating similar ideas. A recent analysis of Michigan’s talent landscape, Michigan’s Great Inflection, found that Michigan must do a better job of talent development, recommending a series of initiatives including new programs supporting talent training and placemaking. Seeking to address these challenges, Michigan Future Inc. has advocated for a new Neighborhood Talent Concentration Initiative which would invest in creating high-amenity vibrant neighborhoods and districts across the state. Projects would support areas such as arts and culture, mixed income housing, commercial corridor development, and parks/recreation assets.
Not surprisingly, Vermont is a long-time player on this front as well. The state’s Better Places program invests small amounts ($5K to $40K) in community placemaking projects. Better Places is especially interesting for its embrace of “crowdgranting,†a practice where projects compete to attract groups of local investors, much as found in typical crowdfunding projects. But, in this case, the local crowdfunding effort is supported and accelerated by state-backed matching grants. Vermont’s excellent Think Vermont website is also a great resource to learn about these programs or to learn more about relocating there.
Similar pilot efforts are underway across the globe. For example, the Paris-based Organization for Economic Cooperation and Development (OECD) is supporting a project entitled “Rethinking Regional Attractiveness in the New Global Environment.†This effort examines case studies in 15 OECD country locations and finds that key factors for attracting foreign investment, talent, and visitors are evolving. Today, the most critical factors for economic growth are:
- Strong digital performance and transportation access (for inward investment)
- Available housing, internet speed, and the ability to attract international students (for talent development)
- Vibrancy, creativity, and natural amenities (for visitor attraction).
These new efforts to link economic development, talent development, and placemaking need not be built from scratch. Large and knowledgeable networks of experts, activists, and community-minded people are already engaged in various placemaking efforts supported by groups like Main Street America, the Citizens Institute for Rural Design, and even the US Department of Agriculture, which has supported a Rural Placemaking Innovation Challenge since 2020. I also highly recommend the Brookings Institution’s Bass Center for Transformative Placemaking as a great resource. Check out their Placemaking Postcards blog.
Talent shortages are going to be with us for many years, so we might as well get used to this new reality. Providing good job and training opportunities may be necessary parts of your community’s future talent strategy, but on their own, they may not be sufficient to help you develop, retain, and attract talent. Perhaps building a great place to live is the new field of dreams?
What’s New at EntreWorks Consulting?
We’re winding down with several recent projects in Southern Virginia, including an evaluation of the Southern Virginia RISE Collaborative and a feasibility study for an innovation hub facility located in Brunswick County, VA. We’re also continuing to support the multiyear Building Resilient Economies in Coal Communities (BRECC) initiative, led by the National Association of Counties, and the State Economic Development Executives Network, in collaboration with the Center for Regional Economic Competitiveness (CREC). Erik Pages will also be serving as an instructor for the University of North Carolina’s Basic Economic Development Course (July 31-August 3) in Chapel Hill, NC.
You can find reports and other great resources at our website; we encourage you to check it out. The website also includes access to all past issues of the EntreWorks Insights newsletter and the EntreWorks blog at http://entreworks.net/blog. Recent topics include the amenity trap, the future of small cities, and our ongoing childcare crisis. In addition, you can still access blog updates at our Facebook and LinkedIn pages. We look forward to connecting in person in 2023.