Regional Economic Connectivity: A place-based strategy for growth and equity

The report includes numerous in-depth community case studies, including in the Cleveland-Elyria area.

SRI worked with the Initiative for a Competitive Inner City to understand and recommend paths for communities to connect and thrive.

For regions, achieving competitiveness while gaining equity often seems out of reach. Economic development has long produced winners and losers.

Among the chief causes of this phenomenon is that, in the absence of intentional and concerted strategy to promote inclusion, a key driver of growth — innovation — also drives up the cost of living, promotes gentrification, and further isolates those often left out of the tech-based economy.

A new report published by the Initiative for a Competitive Inner City (ICIC) and SRI proposes a new place-based strategy that prioritizes both equity and innovation in the growth and development of key regional industries. The authors call it Regional Economic Connectivity.

Regional economic connectivity occurs when an industry cluster driving growth and competitiveness in a broader metropolitan region also has a strong employment and business presence in densely populated areas of high poverty and low income in the region. For example, connectivity can look like the interconnectedness of businesses through the networks of independent supply chain providers and service firms that create a web of mutual benefit — and jobs.

“Regional economic connectivity ensures that the benefits and opportunities of regional clusters are shared among communities, not isolated within specific parts of a region,” says report co-author, Christiana McFarland, director of SRI’s Center for Innovation Strategy and Policy (CISP). “Studies show that when economic development activities in under-resourced communities and those in the broader region are closely aligned — that is, when they are connected — those distressed communities experience strong wage and jobs growth in line with the broader region,” McFarland explains.

“Regional economic connectivity ensures that benefits and opportunities of regional clusters are shared among all communities.” — Christiana McFarland

A new lens

The connectivity strategy starts by understanding the needs of industry clusters in the region, identifying opportunities for distressed communities, and targeting asset development and other strategic investments that support cluster growth in them — such as connecting local suppliers to the region cluster, preparing sites for business expansion, and removing barriers to job access, like public transportation, education and training, and the relative availability of childcare and healthcare.

Assessing connectivity helps better identify and target the types of businesses and jobs a community is trying to grow or attract, but also to prioritize other improvements, like job training and public transportation, that lay the groundwork for connectivity even before new businesses arise.

Case studies

The report includes numerous in-depth community case studies. In Cleveland-Elyria, Ohio, for instance, the manufacturing base leads to a high connectivity score. And in Miami-Fort Lauderdale-West Palm Beach, where the growing financial services has led to similar growth in the insurance industry, those two highly interconnected businesses are having positive impacts in the region’s under-resourced communities.

“In the Cleveland region, connectivity is driven by retaining key cluster employers, implementing cluster-specific development and redevelopment strategies, offering accessible industry-led training, and providing key wrap-around workforce services,” the authors write.

Meanwhile, in southeastern Florida, “Seven of the 10 largest occupations in the Insurance Services cluster require only a high school diploma or the equivalent, making many cluster jobs highly accessible to [under-resourced community] residents with lower levels of formal education.”

It doesn’t hurt, they add, that many of those jobs are well-paying and that many residents of distressed communities enjoy short commutes to the workplace and access to planned expansions in public transportation.

Concrete recommendations

Turning to the question of how community leaders can more actively promote connectivity, McFarland and the other authors laid out a number of recommendations. They include incentives and strategies to attract and retain “cluster-related” business and to place them in or near under-resourced communities, as well as additional educational and job training programs to ensure a skilled workforce is ready to fill those jobs.

Planners can also look for ways to promote greater connectivity among traditionally less-connected, but high growth potential industries, as Miami did by linking financial services with insurance or, as in Hickory, North Carolina, where a growing fiber-optic industry spawned growth in communication equipment and services.

Key to the success of these communities is the core understanding that regional economic connectivity requires strong partnerships between economic development, workforce development, and community development. “Regional economic connectivity is hard, it requires deep, sustained collaboration and a focus on the assets that an under-resourced community brings to the region, not its deficits,” McFarland says. “That’s the real power of connectivity.”

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