Volume 16, Number 2 – July 2019

The Power of Place in Economic Development

I recently read the sociologist Eric Klinenberg’s new book, Palaces for the People:  How Social Infrastructure Can Help Fight Inequality, Polarization, and the Decline of Civic Life.  This work builds off Klinenberg’s earlier research into the 1995 Chicago heat wave, which killed hundreds of elderly and at-risk people.  In that work, he found that victims tended to be poor, isolated, and concentrated in a few neighborhoods.   Yet, some neighborhoods with similar demographics saw few deaths.  He found that these latter places had stronger social capital.  Instead of being isolated, senior citizens in these places spent more time in community centers, churches, libraries and other social settings.  Social capital mattered in this case, and we know it can also matter for economic development.  In the new book, he digs deeper into a related question:  can social infrastructure contribute to social capital, and to improved economic development outcomes?

This line of reasoning interested me as we’ve recently been engaged in several consulting projects focused on community facilities such as a potential new college campus, a local innovation hub, and a new business incubation/acceleration facility.   These locations will certainly serve as places where community and business services are offered, but can they have wider community impacts?  Klinenberg certainly thinks so—his book is full of great stories about the positive impact of programs at local libraries, school buildings, and the like.

My experience tells me that, if done right, economic development-related buildings and facilities can have similar positive effects.  But, it won’t happen on its own.  Community benefits need to be a conscious part of the planning process for new and upgraded facilities and offices.  Let’s look at a few options:  what kinds of places and facilities can be tweaked to generate better social capital and hopefully better community and economic development processes and outcomes?

  • Economic Development Offices

I’ve visited hundreds (if not thousands) of economic development offices around the world, and they are rarely exciting or stimulating places to visit.  Staff and leadership may be interesting, but the spaces are generally pretty blah.  Tight budgets and public scrutiny often prevent economic development organizations from making splashy investments in office space, but I believe that EDOs are missing a big opportunity on this front.  If and when possible, EDOs should seek to find a more permanent home in a central location where they can become rooted in the community and where their facilities can be shared for community meetings and events. 

The decision to own your own space requires some soul-searching and difficult financial choices. Yet, if it’s feasible, it offers many benefits.  EDOs can now serve as a community anchor.  They can open their offices to community groups and better engage with local residents, and, along the way, they become a vital community hub.  Making this investment also sends an important message that your community is a good place to do business.

  • Shared Office Space

Coworking facilities and shared office space are another option.  A coworking boom is underway and some have termed it “the new normal.”  Today, there are more than 22,000 coworking spaces worldwide.  In urban centers, companies like WeWork have become major players in the commercial real estate market, and the wider community benefits of coworking may be less profound.  But, in smaller communities and neighborhoods (both urban and rural), coworking spaces should be viewed as community building anchors. 

The benefits of coworking are clear.  Local residents and entrepreneurs reduce isolation, build community, do business together, and become better business owners along the way.  Communities benefit from these networks by retaining and engaging talent, supporting the startup and growth of new companies, and capitalizing on the social capital generated by coworking.

We’re now seeing a big boom in rural coworking where sometimes isolated entrepreneurs are building thriving ecosystems and networks. Some rural regions, like New Mexico, are even using these sites to develop remote work centers.  Other projects worth checking out include the Stourbridge Project (Honesdale, PA), 20 Fathoms (Traverse City, MI), or Indiana’s LaunchFishers.

Coworking connects freelancers and entrepreneurs, but it can also connect non-profits and social ventures as well. Many communities have found great success by creating non-profit centers that house multiple charitable organizations or individuals working on social ventures.  Many of these efforts serve a diverse mix of organizations.  Examples include San Francisco’s Tides Center or Toronto’s Centre for Social Innovation.  Other programs serve specific needs, such as the Denver-based sustainability effort known as the Alliance Center.

  • Community Centers, Libraries, and Other Public Locales

Public libraries are getting a lot of love these days and rightfully so—they are one of the last free public spaces in many of our communities.  Libraries (and other community centers) are being repurposed for lots of other uses, including STEM education, MakerSpaces,  small business support centers, data and technology centers and community service centers.

These spaces are especially important in rural areas, where central locations for community activity may be limited.  Here, community facilities often serve multiple purposes.  For example, in Walterboro, SC (population 6,000), the Colleton Commercial Kitchen has evolved into a community anchor, with kitchen incubator facilities, meeting space, and an adjoining café.  It has also stimulated other nearby developments.  In Paonia, CO, the Edesia Community Kitchen serves a similar function.

  • Innovation Hubs/Incubators

Business incubators have been around for a long time—the first US incubator dates back to the late 1950s.   However, incubators have not traditionally been part of a wider community infrastructure.  They were instead viewed as another form of office space.  That view is an anachronism today, and the best incubators position themselves as community hubs.

The best of these facilities combine a variety of functions and activities.  They offer business services and incubation programs, but they may also include coworking space, meeting spaces, regular events, food and drink, and other services too.  When done well, they become the physical embodiment of a local entrepreneurial ecosystem.  Dozens of good examples exist around the US and the world.  To get started, you might take a look at 1717 (Richmond, VA), the Innovation Depot (Birmingham, AL), 1871 (Chicago), the Commons (Denver) or the Center for Entrepreneurial Innovation (Phoenix).

Ideally, an innovation hub facility can anchor a wider innovation district.  Even here, the conception of what an innovation district does is starting to change.  At first, these districts were agglomerations of technology firms, i.e. a focused and tightly knit industry cluster.  Today, we’re starting to see a more expansive view, where forward thinking innovation districts are seeking to better link innovation and inclusion.   This happens by designing and promoting events and spaces for community along with focused programs in areas like STEM education and workforce training.  The Districts are becoming a place for everyone—not just the Ph.D. scientists and IT geeks.

What do these examples have in common?  They all use a physical space to do more than provide an office or deliver a program.  They use physical spaces to build communities.

Klinenberg’s book is subtitled “How Social Infrastructure can Help Fight Inequality, Polarization, and the Decline of Civic Life.”  It’s a tall order to think that a single building or a single program can tackle all of these ills.  Yet, at the same time, doing nothing does nothing to address these pressing community challenges.   We can do more to build community—not just in programs we provide to our customers, but in our facilities and physical spaces as well.

What’s New at EntreWorks Consulting?

We’re in the midst of a fun and interesting year so far. On the personal front, I’ve enjoyed a trip to Iceland and a cross-country road trip with my son. We’re also working on newish projects in Fort Worth, Texas, and Charlottesville, Virginia. And, among other work, we’ve just completed a strategic planning project for the Local Development District Association of Pennsylvania.

We hope to see you on the road!  We also continue to provide more regular news and updates at the EntreWorks blog at http://entreworks.net/blog.  Recent posts have discussed the gig economy, the role of public libraries, and other timely issues of the day. You can also access blog updates at our Facebook and LinkedIn pages.