Five Ways that the Build Back Better Regional Challenge Represents the Next Generation of Economic Growth and Competitiveness.
In the previous two posts on the Blog, Jon Schnur, CEO of America Achieves, wrote about the optimism generated by the 60 finalists for the Economic Development Administration (EDA) Build Back Better Regional Challenge, and how momentum is growing – thanks to an increase in federal investment and a movement of local, regional, and state leaders in coalitions across the country. The Build Back Better Regional Challenge, or BBBRC, also represents an evolution of how the federal government can support growth and opportunity in communities across the country.
As Jon shared: “This program is not your grandparents’ economic development strategy.” Traditional economic development is often based on corporate incentives or marketing to lure (typically very large) companies away from other regions of the country. As such, it by itself often results in a race to the bottom across regions that is zero-sum (or worse) for overall American economic growth and competitiveness.
I agree that the BBBRC represents a new approach to economic development, one that will have better outcomes for us (and our grandparents), and just as importantly, lay the foundations to create long-lasting benefits for our grandchildren. I see five key differentiators from much economic development in the past.
1. Focusing on equity: This question was the first on the minds of many of the coalitions (and the entire federal government). Such a people-centered view of economic development differs from how it was practiced in the past, in which growth alone for growth’s sake was success. EDA understands that growth that does not benefit historically excluded communities (HECs) is not a good investment of public funding.
So America Achieves and the other members of the BBBRC Technical Assistance Coalition (TA Coalition) encouraged finalists to think about equity in terms of three areas:
We encouraged organizations to add depth to their equity commitments by expanding the number of HEC affiliated organizations that they were actively working with. Finalists also took stock of existing distress and inequities, and to understand why their HECs had been excluded, in order to do things differently and achieve different outcomes.
Finally, coalitions had to set goals and formulate plans to measure progress against these goals. While many programs require data and measurement, the BBBRC’s focus on disaggregating data is an important step forward. It will help ensure that the investments not only support growth, but also support growth for those communities that have not traditionally benefited from it.
2. Investing in economic clusters that are asset-based: BBBRC is built on a premise that national economic growth and competitiveness are best served via regionally-driven growth. That is why it required finalists to understand and build on their existing assets around an industry cluster. Bruce Katz at the Nowak Metro Finance Lab at Drexel, one of our TA Coalition partners, provided some invaluable reflections about the different types of clusters we saw emerge in the process.
In order to make the case for their cluster, regions started with an assessment of the assets and comparative advantages of their region. These could be existing cultural assets, natural resources, research institutions, demographic strengths, or transportation infrastructure, for example. Regions worked to build on their assets with complementary investments in – and projects around – physical, human, and organizational infrastructure required for long-term, globally-competitive success.
3. Transforming economic growth through supporting systems, not just projects: Many economic development programs have focused on stand-alone projects and investments, which can all too often be disconnected from a broader vision, even if they are individually valuable. A water pipe here, an industrial park there. BBBRC requires an ambitious, coherent vision that clearly connects to the goals and the structure of the finalist’s coalition and then to the projects.
The TA coalition worked with finalists to help them formulate and visualize strategically cohesive visions that were grounded in reality and tied together through their projects and impact metrics. We called this their “North Star,” as Jon pointed out in his previous blog post. The projects proposed by coalitions were related and mutually reinforcing, such that the EDA’s investments will jump start a much larger engine of growth.
4. Catalyzing sustainable and long-term efforts: $1 billion is the largest amount of money EDA has ever committed to a competition – as a whole, it is precedent-setting and transformative. That said, when spread across the country for economic development, it is not enough to be transformative in every region of the country.
Moreover, BBBRC funds must be spent within five years. BBBRC sought to take advantage of its flexible nature (unusual for federal funding) to be a down payment on long-term transformation. EDA set up the program to serve as a catalyst that attracts other funding beyond five years, to continue to support the economic engine. When paired with a coalition’s North Star vision, every region also had a clear story to share with potential funders. By taking this longer-term view of growth, BBBRC encourages deeper and broader relationships and funding than would be the case with individual projects.
5. Supporting coalition governance built around regional economic geographies: BBBRC required applicants to join together in broad coalitions to include public and private sector stakeholders, from universities to government agencies to nonprofits. But actually building a functional, long-term coalition is far more complex than gathering commitments and making organizational charts. It requires a clear hub and defined governance to coordinate various interests and clarify roles, including decision making. As importantly, it also requires alignment around the culture of collaboration, including how trust can be forged; collective interests can be identified; disagreements can be resolved; and collective accountability can be achieved. EDA understood that all of this requires resources and so allowed finalists to include funding for organizational infrastructure to allow for investment in strong coalition governance and long-term success.
These coalitions were not built around traditional county, city, or even state lines (as with so many federal programs). Instead, they were determined by economic geographies, such as supply chains, transportation connections, and locations of anchor institutions. We also saw finalist coalitions that explicitly looked toward more equitable outcomes by drawing geographies around historically HECs, such as rural areas or communities of color. Whatever geography they chose, applicants had to explicitly explain how it related to their cluster and coalition.
The EDA’s BBBRC approach outlined above is more sophisticated and can take more time and collaboration to build coalitions and projects than traditional economic incentives. But it is more likely to sustainably grow the local and overall national economy, rather than shuffle jobs and economic production around the country. And it is far more likely to be sustainable, inclusive, and successful for us, our grandparents, and our grandchildren.
This shift in approach offers many lessons learned, not only for the field of economic development, but also for competitive grant programs and coalition-based change in all sorts of fields. These five categories are merely an introduction to some of the deep insights we gathered over the previous few months. The America Achieves team has been documenting our takeaways and are excited to delve more into each of these categories, and more topics, in greater detail over the coming weeks, so stay tuned!
Senior Advisor on Economic Development for America Achieves.
