Thursday, September 30, 2010

Five Key Trends for Local Economic Development

Leo Vazquez, from the Rutgers University Edward J. Bloustein School of Planning and Public Policy, offered some insight into trends we are likely to see in the world of economic development over the next decade that are worth repeating.

Five Key Trends for Local Economic Development in the 2010s

The arts as engines for the creative and experience economies. According to a report to be published soon by Arts Build Communities, there was a 10% jump in the number of people working in the creative sector between 1998 and 2007. Most are probably not artists, but rather the people whose work supports the arts: administrators, blue-collar workers, manufacturers of creative products. The arts are at the heart of two other growing economic trends -- the creative economy and the experience economy. The creative economy includes scientific innovation and cultural products for export (Think Ipads, Droids and the new medicines you see on TV.) The experience economy includes all those retailers, businesses and places people are willing to pay more money to because of the experience they provide. (That's why the Mall of America has an amusement park in the center, and not just more chain stores.)

To take advantage of this opportunity, consider: Attracting and retaining creative sector professionals through place- and community-building efforts; place marketing efforts; providing more flex space; whether your community feels inviting to creative professionals.

The growth of "free agent" nation. Self-employed workers accounted for about 30% of the job growth in the United States between 1998 and 2008. While the number of employees in businesses grew 10% in that time, the number of self-employed workers grew 26%. (See the County Business Patterns database for more information). In 2008, about 15% of 142.2 million jobs in the United States were held by self-employed workers.

To take advantage of this opportunity, consider: Business assistance and development strategies targeted to micro-entrepreneurs; live-work spaces clustered in downtown settings; cooperatives, and other structures that help businesses share resources.

Ethnic minority communities as emerging markets. Ethnic minority communities had about 23% of the nation's $10.7 trillion in buying power in 2009, according to the Selig Center for Economic Growth. While the total amount of disposable income in the United States had been growing through most of this decade, the buying power of African-Americans, Asian-Americans, Latinos, Native Americans and multiracial Americans grew faster than that of non-Hispanic Whites. Those trends are likely to increase as the nation gets more diverse.

To take advantage of this opportunity, consider: Place marketing and business development geared to ethnic communities; developing more culturally competent placebuilding and economic development professionals.

Green industries replacing gray industries. It may be a decade or more before alternative energy producers and manufacturers of green products become a major source of jobs in many communities. Placebuilders who plan for these uses now will have a tremendous advantage. Whether green or gray, industrial uses need large, affordable spaces and the ability to easily move large amounts of goods. (That's why so many 19th and early 20th century factories in city neighborhoods have become loft housing).

To take advantage of this opportunity, consider: Preserving existing industrial and warehousing areas; landbanking; encouraging the transitional use of light industrial spaces as artisan work/live spaces, server farms, or retail/commercial storage facilities.

Transnational communities as market expanders. From classic port-of-entry cities to small farming towns, continued immigration is having a bigger impact on America. One of those impacts is economic: It is easier for money and goods to flow between countries. Communities that participate in transnational economies can significantly expand their market area while minimizing competition with its neighbors. In an age where the Internet and lower costs in other countries are challenging brick-and-mortar American businesses, this is a way for communities of any size to bring more wealth into its borders.

To take advantage of this opportunity, consider: Building relationships with immigrant groups in and around your community; encouraging the use of light industrial facilities for import, export or assembly of materials; promoting community building efforts that make immigrants feel more welcome in a place.

These trends have influenced our work in crafting a new economic development strategy in Owensboro based largely on talent and quality of place.

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