The quality of our cities effects the cultural underpinnings of the American Dream and therefore the nature and location of the growth we choose. They are interdependent and connected at the root by our sense of community.
The Next American Metropolis: Ecology, Community, and the American Dream by Peter Calthorpe
I recently presented at a Primacy of Place Conference held in Indianapolis, Indiana. My main message to the audience was that the world of economic development is now upside down. What we knew even as short as 10-years ago can (and will) conspire to cause our communities to fail going forward.
My basic thesis is the economic development profession needs to focus less on job creation, retention and expansion; and more on better enabling residents to achieve their American Dream. It is the only way we will be able to serve both the businesses and residents in our communities. This is a major paradigm shift for certain, and like all shifts in thinking I have found the idea creates discomfort among economic developers whose feet are cemented in the past.
The game has changed and we need to either adapt or fall hopelessly behind.
I see three mega-trends driving the need to rethink the goal of economic development.
- Globalization has shrunk the world and dramatically increased the number of competitors vying for an essentially fixed amount of annual capital investment.
- Employers worldwide are finding it difficult to fill vacant positions because of a shortage of skilled labor in their markets.
- Technology is allowing people (and companies) to locate virtually anywhere and be successful.
Communities will win or lose based on ability to meet the need for skilled labor
In a nutshell, the game has shifted from chasing smokestacks to chasing skilled labor. And that labor has many viable options for where it chooses to work and live. But a consistent objective for virtually everybody living in the U.S. is to pursue their American Dream. And if one location can better enable success than another, the first will be preferred over the second as a place to live and work.
How bad is it?
I wrote a blog post sharing what I found from conducting online research into the impact of the baby boomer generation on the availability of skilled labor. You might find the information useful if you are putting together a presentation on the subject or a talk sheet to guide a conversation. Here are a couple of the more revealing facts.
- For every one person entering the labor force two are leaving.
- For the first time in our Nation’s history, we will not be able to replenish our skilled labor force.
- CEOs indicate access to required skilled labor is their #1 priority in site selection.
- The baby boomer impact is global so we can’t fix the problem simply by encouraging increased immigration.
In addition, here is a great infographic that provides some additional perspective. You will read that the inforgraphic concludes companies expect to lose over $100 million in the next 5-years because of the demographic challenge.
In the spirit of full disclosure, I also found articles that suggest the baby boomer crisis is not actually a real crisis. But, I am a big believer in preparedness. If you assume it is not a crisis and it turns out to be one, then your community will be hopelessly behind the curve and potentially will not be in a position to recover. Err on assuming it is a crisis and take action now, in the worst case scenario (where it isn/t actually a crisis) your community becomes even more competitive. Candidly, the fact that CEOs are now citing skilled labor access as their #1 criteria for site selection is enough for me to err on assuming the crisis is real and to not recommend putting your head in the sand.
What can you do?
I believe the strategy communities should adopt is to better enable residents to achieve their American Dream. By doing so, all choices in asset creation, infrastructure investment and public policy/programs are assessed based on whether they impede or enable residents to better achieve their American dream.
This is much more than a philosophical discussion. Adopting this paradigm fundamentally changes the conversation. You will potentially make very different choices as a result. At a minimum, it forces you to take a longer time horizon in assessing the impact of your choices.
In addition, it raises the importance of a more inclusive approach to strategy development. It recognizes that community development is as important to economic development as product development is to a consumer brand. The approach demands a more comprehensive look at the challenge residents face in achieving their American Dream and forces you to prioritize efforts to knock down any barriers. It also suspends the notion that bigger is better. Sometimes the best solution is one that leads to a right sized and sustainable economy for a community.
But, it also requires real leadership to be effective. Perhaps the scariest aspect is that the vision for your community is crafted by the residents and is not necessarily aligned with your own. At the conference, I spoke with an attendee after my talk about his challenge. He is the economic development professional in a rural community. He wanted my thoughts in how he could reshape his community into a high tech location. I asked him if that is what the residents wanted, to which he replied – “I don’t know”. I reminded him that there is nothing wrong with a community remaining agriculturally focused and within that focus there was a lot that could be done to better ensure sustainable economic viability. But, i told him that his job was to better enable residents to achieve their American Dream rather than convince his residents that his American Dream was the better choice. In the conversation I saw the light bulb of understanding flash. He walked away with a new idea for the industrial park he was trying to attract business to. He was going to explore what businesses would help his residents become even more competitive and try to recruit them to the park. I felt good about the conversation and I think he is on the right track.
What is the American Dream?
I have written on this subject extensively and encourage you to read some of the following posts. Xavier university has quantified the American Dream and their work is a great blueprint for the economic development profession to use in understanding the barriers that might exist in their communities.