The new framework for economic development proposed by Brookings' Amy Liu should be taken as a vital call to action. Four elements, in particular, have proven to be crucial to building a future of shared prosperity.

In his extraordinary new book, economist Robert J. Gordon’s argues that America’s future economic growth is severely constrained because “inequality … since 1970 has steadily directed an ever larger share of the fruits of the American growth machine to the top of the income distribution.” That may come as no surprise to many of us, but a key question remains: What do we do about it?

Amy Liu’s recent paper, Remaking Economic Development, The Markets and Civics of Continuous Growth and Prosperity, helps us to begin to answer that question in a real and practical way. Based on more than a decade of work that Brookings Metropolitan Program has done with cities and metropolitan areas across the country, Liu,in essence, provides public and private leaders with a framework for building a more inclusive regional economy focused on much greater, shared prosperity.

She makes four points that ring especially true based on the learning from the work that Living Cities is doing to build a New Urban Practice in America’s cities that dramatically improves the economic well-being of low-income people, faster:

1. The Work Must be Urgent, Visible and Iterative

“Undertaking transformative economic change requires developing a sense of urgency and high visibility…Establishing a common economic narrative brings leaders and the community together to mobilize action.”

We know the challenges of economic development cannot be solved with a single, silver bullet solution. To remake economic development, we must first articulate a bold endgame that is urgent, visible and iterative. Why urgent? The United States is undergoing a “Diversity Explosion,” as another Brookings researcher, William Frey, puts it. To improve our economic future, we must urgently address the plethora of disparities currently facing America’s people of color, like in New Orleans, where the city is proactively pursuing strategies to close the 50% unemployment rate among African-American men. Why visible? By making work towards the bold endgame visible, like the Minneapolis-St. Paul “Beyond the Rails” vision, we drum-up widespread support and effectively hold leaders accountable for the outcomes. Why iterative? We need to be open and transparent about what’s working, what’s not-working, and where we still have to learn. We see our multi-city Integration Initiative partners come together bi-annually with a hunger to learn from other places, and double-down on what works. Urgency, visibility and iteration must be the core of all future practice in order to achieve dramatically improved economic outcomes.

In Baltimore, hiring and development contracts are inclusive of people of color.

2. There Must be an Intentionality as to Race and Inclusiveness

“Transparency and inclusion are essential to building the trust required for on-going collaboration and partnership at the scale of the region. And regions pursuing deep prosperity have learned that it requires deliberate steps to ensure that regional efforts deliver inclusive outcomes.”

A one-size-fits-all approach to economic development does not work. Furthermore, we’ve seen time and time again that spreading resources evenly like peanut-butter does not lead to inclusive economic growth. Instead, shared prosperity requires intentionality around closing gaps. That’s where data is important in building transparency, trust, and buy-in. In the StriveTogether network, communities are looking at data, using data to understand where and what the diaparities are, and developing strategies and resourcing that responds to what the data are telling them. Although the conversations about race and poverty are inherently challenging when diverse communities come together, disaggregating data is decidedly the right place to begin to frame the conversation. In case after case, the data allowed communities to design interventions that targeted those students most in need so that they could achieve better outcomes for all students.

3. Efforts Must be Networked and Evolving with High Capacity Institutions

“Networked regions need strong flexible cross-sector institutional infrastructure and capacity with staying power. Leaders need to work through designated quarterback organizations capable of building trust and maintaining communications to keep everyone on the same page.”

This is one of Amy’s most critical points, and it is one that is often overlooked. Across Living Cities’ diverse portfolio of working with local leaders who are coming together for collective impact, we have seen that what Amy is calling the “quarterback function,” or what others call “backbone” support, is a pre-requisite for long term change. We have found this to be true from cities in the Northeast like Newark to cities in the Southwest like Albuquerque. In fact, a Federal Reserve Bank study found that it was the presence of cross-sector leaders working together through a common goal that made the biggest difference in initiatives that were truly able to achieve transformative change. It has to be someone’s job every day to get up and ensure that partners are working together differently. Process is the new Program.

Students in Auditorium, By Flickr user Phil Rhoeder

Colleges and universities are working with local employers to expand competency-based training curricula. Photo by Phil Rhoeder, FLickr.

4. A Diverse and Skilled Workforce Must be Built for the Actual Employers

“Until quite recently, employers and economic developers largely stayed on the sidelines of skills development, insisting it was not their job to take on the hard work of building skills for productive growth and closing gaps in education and access to jobs. Meanwhile, workforce organizations and community colleges were developing new approaches as the field moved toward “sector-based” and “demand-driven” strategies, but their effectiveness depended on the engagement and leadership of employers more apt to gather around economic development tables.”

The importance of a new relationship and engagement between educators, economic developers and employers cannot be overstated. The landscape must change. A recent study found that only 33% of business leaders believe that universities are effectively preparing students for the workforce. But, there is promising work happening around the country. Cities, like Louisville, as part of the National Fund for Workforce Solutions, for example, work with their major employers to ensure that they provide more employees with stepping stones to advance. Other companies, likes Partners Healthcare are working with online universities to aggressively and affordably “upskill” their workforce with a focus on “competencies” that their employees need to advance.

Amy Liu’s framework for building a more inclusive regional economy should also be taken as a vital call to action. Many individuals and institutions are already putting these ideas into action, but we are not doing enough. We still have a lot of work to do. We have to continue to experiment and focus on bringing all these elements together to achieve dramatically greater, shared prosperity in the coming years.


Photo: Detroit Woodward Corridor, courtesy of Wikimedia Commons.