Planning for Post-Covid Economic Development with Resilience
Written by Kim Zeuli, EEP and Alisa Pyszka, Bridge Economic Development
In response to the current pandemic, cities across the country are responding as quickly as possible with a myriad of resources to support households and keep businesses afloat. This unprecedented response to an unprecedented crisis is commendable. And, yet, we know it will not be enough. The fallout from the economic aftershock will be severe. How quickly local economies recover, and families are stabilized, depends not just on response and recovery plans, but ultimately on the resilience of the local economy. Some cities will return to normal faster than others. The speed of recovery will largely be a function of their economy’s resilience and not what happens in the next couple of months. While many definitions for resilience exist, at the core are three basic principles: the ability to adapt to changing conditions, withstand disruptions, and recover quickly. Resilience and economic growth are both vital for healthy economies in uncertain times. A resilience plan will not grow the economy. It only ensures that cities get back on track—to whatever economic growth trajectory they were on before the crisis—quickly. If a local economy is resilient, the recovery period will be much shorter than an economy with little or no resilience. If a local economy is not resilient, it may never return to its former economic growth path. History is littered with stories of company towns and cities defined by a single industry that are decimated after major economic shocks. Mill towns in New England, followed by mill towns in the South. The so-called Rust Belt Region. Detroit. Once their primary industries (and largest employers) moved or faltered, the economic foundation of these once thriving areas crumbled.
Getting the Fundamentals Right for Economic Growth When we advise cities on economic development strategies, we rely on the sound economic growth principles that are familiar to most of our readers: strong traded-sector industries, a skilled workforce, and accessible infrastructure. Cities that want to jump to a higher economic growth plan need to invest in global connections, emerging technologies, and startup ecosystems to bolster innovation. At the same time, they must invest in small local business growth to foster a great place that attracts talent and provides equitable onramp opportunities for the entire community. During this current pandemic, we are witnessing how businesses with a workforce that can work remotely are faring better than those that have had to shut down completely. Our established knowledge-based industries (e.g., software development and engineering) are an important element in rebuilding the economy. However, we caution cities from focusing exclusively on these industries, which typically employ those with degrees and specialized skills not representative of the majority of workers—those that are now unemployed—as a strategy to rebuild the economy. At the same time, a community should not focus exclusively on local businesses either, which cannot thrive without the traded-sector industries that bring new money into the region, provide important contracts for local businesses, and often are major employers that offer higher wages than main street businesses. Without larger, traded-sector businesses, the local economy shrinks. Without local, small businesses, there is lack of opportunity for residents with lower educational levels and skill sets. Both are vital for a robust economy. Strong economic growth is based on a system that provides everyone access to wealth creation either through living-wage jobs in established businesses or building opportunity through a new business. Getting the Fundamentals Right for Economic Resilience It is important to get the fundamentals right for resilience planning as well. In the race to recovery after the pandemic, we are hearing the term resilience pop up in most conversations, but it is being used by those with little understanding of what resilience really means. The Feeding Cities Group develops pioneering resilience plans based on the fundamentals of risk management and sustainability. Key resilience components for cities include:
- A business base that includes diverse industrial sectors, representing similar shares of economic output and employment.
- A diverse range of businesses in terms of size and ownership, from main street businesses to corporates.
- Small businesses in all stages of life cycle, from startups to mature enterprises.
- An effective entrepreneurial ecosystem that will foster new entrepreneurs, get the owners of closed businesses into startup mode, and help small businesses pivot and grow through uncertain times. The support will intentionally include underrepresented entrepreneurs (woman, people of color and veterans).
- Small businesses need more than infusions of capital to be resilient. They need technical assistance, business management education, and access to new customers and suppliers.
- Healthy anchor organizations such as a university, college or hospital that actively support local hiring and purchasing from local businesses.
- Effective workforce organizations that can rapidly connect the unemployed to new jobs (in new industries) and provide efficient job training as needed.
- A labor force with new skills to navigate unprecedented job insecurity.