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

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

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

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)

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

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 6

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 7

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 8

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 9

WHAT DOES THIS MEAN FOR YOUR COUNTY’S ECONOMIC DEVELOPMENT PLANNING? Planning for a more diverse economy

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) 11

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 12

DIVERSITY WEBTOOL Planning for a more diverse economy

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: 1.Understand basic growth trends, 2.Consider their community and region’s economic diversity, and 3.Identify other places with similar economic conditions. Where to find the tool: –

Diversity metrics and data for all U.S. Counties

To learn more about Economic Diversity Study results are available here: – The summary report – StatisticsStrategiesandGuidesforAction.pdf StatisticsStrategiesandGuidesforAction.pdf Supporting documents – Statistical portrait StatisticalPortraitofEconomicDiversityinAppalachia.pdf StatisticalPortraitofEconomicDiversityinAppalachia.pdf – Case study report CaseStudiesinEconomicDiversification.pdf CaseStudiesinEconomicDiversification.pdf – Guide to using the webtool PractitionersGuidetoEconomicDiversityWebTool.pdf PractitionersGuidetoEconomicDiversityWebTool.pdf

DISCUSSION Planning for a more diverse economy

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?

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