Preparing for a More Diverse Economy: Key Findings and Strategies for County Economic Development Planning

1. Mark C. White, Ph.D. Preparing for a more diverse economy May 23, 2014

2. Overview • About the Diversity in Appalachia project • Key findings • What does this mean for your county’s economic development planning? • Discussion

3. About the project • The Appalachian Regional Commission was motivated by: • Appalachia’s legacy of low economic diversity • Little guidance for practitioners seeking more diversified economy • Research sponsored by • Quantitative research • Case study research • Guides for action • Lead research organizations: • University of Illinois at Urbana-Champaign’s Regional Economics Applications Laboratory • Center for Regional Economic Competitiveness • Research support from: • RUPRI Center for Rural Entrepreneurship • EntreWorks Consulting

4. Key Data Findings: Urban counties tend to be more diverse Low diversity counties tend to be rural (avg. pop. ~7,700) High diversity counties tend to be urban (avg. pop. ~425,000)

5. Key Data Findings, con’t • Diversity does not always equal prosperity • A generic mix of industries is not enough • Counties with large increases in measured diversity often suffered significant job losses • Regional centers can influence effective county diversity • Most counties lose more commuters than they gain • Commuters flow toward diversity • Specializations in regional centers play outsized role

6. Diversity’s role in economic development practice • Diversity is a frequently cited goal, but there are few “diversity-specific” strategies • Need to mitigate risk (from a real or impending crisis), OR • Desire to capture opportunities and better leverage existing economic development assets

7. Successful diversification efforts are broad-based efforts • Positive diversification results from strategies that implement successful specialization strategies simultaneously • Building an economic base • What brings new money into your community? • Must diversify more than the employment base • Workforce skills • Sources of income (e.g. retiree attraction strategies) • Diversification must be more than an industry replacement strategy • Loss can occur in an instant • Replacement occurs over decades

8. The regional context shapes efforts to foster economic diversity • Low diversity counties in Low diversity regions: • Develop new competencies and specializations • Low diversity counties in High diversity regions: • Connect to your neighbor’s competencies and specializations

9. Successful places build greater diversity through sound economic development practices • Possess strong leadership • Establish a process to pursue a long-term vision • Form effective partnerships • Regionally • Across silos • Be data-driven

10. Planning for a more diverse economy What does this mean for your county’s economic development planning?

11. How do diversity-related issues affect your county: Assessing Risks • How exposed is the county to: • A few markets? • By location (local and regional) • By markets (customers and suppliers) • Limited skill sets in the workforce? • Limited sources of income? • Understanding risk requires: • Micro-level analysis (business by business), AND • Macro-level analysis (county and regional)

12. How do diversity-related issues affect your county: Identifying Opportunities • What does your county make? • Its goods & services • How does your county produce value for the global marketplace? • Its workforce skills and competencies • Its technologies • Why does your county have the economic activity it does? • Its industrial legacies • Its markets • Where are your county’s connections? • Regionally • Nationally • Internationally

13. Planning for a more diverse economy Diversity Webtool

14. The Diversity Webtool • The tool helps practitioners be more data-driven in how they think about economic diversity • The tool provides data, indicators and visualizations to help practitioners: • Understand basic growth trends, • Consider their community and region’s economic diversity, and • Identify other places with similar economic conditions. • Where to find the tool: • http://economicdiversityinappalachia.creconline.org/

15. Diversity metrics and data for all U.S. Counties

16. To learn more about Economic Diversity • Study results are available here: • http://www.arc.gov/research/researchreportdetails.asp?REPORT_ID=108 • The summary report • http://www.arc.gov/assets/research_reports/EconomicDiversityinAppalachia-StatisticsStrategiesandGuidesforAction.pdf • Supporting documents • Statistical portrait • http://www.arc.gov/assets/research_reports/EconomicDiversityinAppalachia-StatisticalPortraitofEconomicDiversityinAppalachia.pdf • Case study report • http://www.arc.gov/assets/research_reports/EconomicDiversityinAppalachia-CaseStudiesinEconomicDiversification.pdf • Guide to using the webtool • http://www.arc.gov/assets/research_reports/EconomicDiversityinAppalachia-PractitionersGuidetoEconomicDiversityWebTool.pdf

17. Planning for a more diverse economy Discussion

18. Questions for discussion • Are these issues of concern in your county? • What can county officials do to advance strategies for strengthening a community’s economic outlook? • Any particularly effective efforts? • How important were partnerships to these successful economic development efforts? • Public-Private collaboration? • Partnerships with nonprofit or philanthropic groups? • What advice would you give to other county officials seeking to pursue collaborative economic development strategies?

19. Contact Info • Mark White: mwhite@crec.net