So how do we start building Wise Economies? Economies = Communities =Ecosystems

Based on my house, I think I live in the "litter" zone.

First, we need to change how we think about communities, businesses, organizations and governments.  We need to understand that economic vitality depends on the health of a community, and that a community is not a set of separate, unrelated systems – a business district, a school system, a park system, a street system — but an ecosystem.  How our businesses do, what happens to our downtowns, what our parks look like, where we spend our money, how we talk about our communities, doesn’t just affect that one thing – it affects everything.  We create a lot of those unintended consequences for our communities simply by not thinking beyond our own pet interests or our own department walls.

Take, for example, the profession of economic development.  Economic Development isn’t _really_ about just increasing the number of businesses.  We all know that.  The reason why communities do economic development, why they invest time and resources in it, is to make sure that the local economy has what it needs and is doing what it needs to be doing to support the health of the overall system.  The purpose of economic development, at its core, is to help the community become stronger by making sure that the economic part of the ecosystem is doing its part well.      

Here’s the hard truth, though: it’s a whole lot easier to define your economic development job, and measure your achievements, if you cast it in terms of “winning new businesses” instead of “facilitating the health of the local economy.”  It’s a lot easier to count new jobs, or new employers, or hits on the web site, or hands shaken at the International Shopping Centers Conference, than it is to evaluate whether you are actually creating a healthier local economy.  That is, unless you have a clear plan and are measuring the right kinds of improvements.  A clear plan and accurate measurements can be done, but they take more honest thought and stronger leadership than just chasing anything that moves.  So more often than not, we count the web site hits and handshakes, shoot what flies and claim what falls, and assume (or take on faith) that those activities are somehow supporting the community’s ecosystem.  Economic developers are starting to figure out that “quality of life” has something important to do with the ability to grow a local economy, but there’s still a good deal of scrabbling in the dark to figure out how to tie those elements together.  And until that understanding of the interdependence of the economy on the rest of the community ecosystem takes root, it’s going to be far too easy to default to old measures that often hide whether our efforts are helping the larger community or hurting it. 

I have been picking on economic developers, but the truth is that there is more than enough blame to spread around.  We are almost all guilty of not seeing outside our silos, and assuming nice simple ipso-facto relationships between our favorite topics and Everything Else.  When urban planners fall into the trap of assuming that a single physical strategy, such as Complete Streets or New Urbanism or Urban Renewal or any of the other catch phrases through the years, will have a “catalytic” effect on the local economy, we are oversimplifying because we are not fully thinking about the entire ecosystem (people who do not have good economic prospects or are insecure about their jobs may use the bike lanes out of necessity, but may not shop in the stores by the bike lane like you anticipated).  When business owners and residents assume that the less taxes I pay, the better, we often fail to fully account for the value of the services that the public sector provides us, whether garbage pickup or maintaining streets or keeping us from being robbed or managing the externalities that other businesses and people create – and their potential deep negative effect on our ability to function.    

 We oversimplify the ecosystem, we stay in our silos and stick to our simple solutions, because it’s intellectually easier.  It’s easier to say “My stuff is important, yours isn’t” than to try to look rationally at the whole range of issues and understand how My Stuff fits into the whole system.  And if we assume that our communities are nice simple frontier towns, with lots of empty land to absorb those externalities and a small homogeneous group of people to accommodate, then perhaps that’s fine, at least until we run out of that land or those people get more complicated.  But that’s where we are today. 

If we are honest about the complexities of our communities, then we have to be honest about the fact that there are few, if any, simple solutions.  Things don’t fit easily within the silos anymore, and when we don’t see these related impacts, we will certainly feel their effects.  There are no one-shot solutions – if we want to facilitate the health of the ecosystem, we have to work on a wide range of elements in concert. 

Ideally, this is what planning of any stripe should do, whether organizational strategic plans or community comprehensive plans or any other variant on the theme.  It’s part of why it becomes increasingly important to plan for multiple possible futures – with this many moving parts, a certain level of uncertainty is inescapable.  But too often we only plan for My Stuff, not for the role our bailiwick plays in building the ecosystem.   And as I’ve said about other challenging issues that require more from us than our common sense and grasp of basic Play Nice With Others rules, there are specific processes and methods that have been developed to help us deal with these issues.  But too often, we don’t know about or make the effort to seek out the tools that are available. 

We are increasingly learning that natural ecosystems are amazing things.  All those interconnections and interdependencies between the plants, the bugs, the animals and all that give a strong ecosystem the same traits that we desire in our communities: long-term growth, healthy organisms, the ability to bounce back from disasters (visit the site of a forest fire three years ago to see what I mean).  And the biologists and botanists and other –ologists tell us that ecosystems that lose key members, like an animal who is part of the food chain, are bound for trouble or collapse. The whole reinforces the parts. 

If we are serious about building Wise Economies – economies that are robust, resilient, flexible and don’t leave us up a creek in the future – we need to think of our communities as economics-driven ecosystems, systems where the silo walls have broken down and where the leaves of one aspect of the community shades the roots and feed the animals that make up the rest of the system.

9 thoughts on “So how do we start building Wise Economies? Economies = Communities =Ecosystems”

  1. What an interesting read.

    I don’t want to sound overly cynical, but I think the most basic function of Economic Development is to improve the community’s tax base and resources for the future. I am convinced that most Economic Development departments don’t really care that people have a job; they are more worried about the taxes that come from a new hire’s income or the bump in property tax evaluation or a new shop’s ability to sell stuff.

    Now that I threw that out there, I think it’s important to realize that local governments are transitioning into a new reality. The last few years, local governments, facing fewer resources, have been put in a position to only do those things that provide a positive impact to the local government’s bottom line. As an example, think of all the local government swimming pools that have closed down. Elected officials or community critics continue to tell local governments to be “run more like a business”. Part of that mantra comes the requirement that local government services start putting out statistics showing where the money is being spent and what is being accomplished.

    The problem with the concept of statistical reporting, espeically in economic development, is that we are only focused on what we can control, which is usually outputs, not outcomes, which hold the real meaning. Like you said, we can talk and report ad nauseum about how many trips/visits/handshakes were made during the past year. But, in the end, did we make our economy any better? That is hard to measure because for every statistic saying “yes”, we can find one that says “no” and I think intellectually, we struggle to find the connections between the statistics we like and those we don’t, and when we do find that connection, we finally come to the realization that there is probably not a damn thing we can do about it, or at least, we need to work to develop new relationships with new groups to start to move the needle of progress.

    And, in the end, isn’t that the real problem? Local economies are either being grown or shrunk by people, not the local government. Local governments do a dis-service when they think or act or believe that they can solve every problem, they simply can’t, even though they are often asked to do so. By the same token, residents put their local governments in a bad spot when they believe and ask local governments to solve every problem that exists.

    So, what do we do? I am not sure, but I think it’s safe to say local government is still highly relational; ok, political. Our residents end up losing or gaining faith in us if they know who we are and what we do. We simply have to be willing to tell our stories and to tell our residents that we can only do so much and we have to use the tools we have to move the ball forward.

  2. Della: You have hit the nail on the head. For a while in my silo, I did not buy into the “community sustainability” model. Now, I can’t see without it. The sustainability model and it’s community interaction process looks at the community as an ecosystem of the Economy, Natural and Built Environment and the Social Fabric. In so involving the community, it has become apparent to me that economic development begins at the Neighborhood level. There is wisdom in the neighborhoods that needs to be tapped for the community to move forward.

  3. Excellent article. As you note, economies are complex systems that encompass cities, suburbs and rural areas. Economies are often characterized by the quantity and character of production, but cannot be divorced from their environment, culture, politics and quality of life.

    You also mentioned that one key to dealing with the complexity of economies is to understand and internalize externalities. Some techniques that have been successfully used in this regard can be found at http://www.justeconomicsllc.com

  4. Contribution toward bettering a community system by individual members will happen if there is a real tangible incentive for them to due so. To take a proprietary interest in ones community one must realize how much they have to loose if they don’t. Switzerland is a good example and model.Their treasure and their community are tied together so investment in the community is both individual and corporate.Therefore the members take a proprietary interest in their community and it’s successes as well as failures. They build a more durable system because everyone benefits.

    1. That’s a really good point, George. Sociologists (or psychologists, I forget which) call that “enlightened self-interest,” which is also a critical component of various environmental strategies and things like social criteria-based investing.

      I think one of the key challenges of the next generation is to transform the relationship between person and community from that of consumer to that of member. Some forces seem to be pushing us in that direction — the interest in urban living and urban redevelopment, for one thing — but the fragmenting of socioeconomic groups, and that old American mantra of pulling up roots and moving if you don’t like it here, are pretty powerful forces working against the idea of being a participant, not a buyer. So I can’t quite see where it’s going to go

  5. Della: I think you make a very valid argument. It’s easy to blame economic developers; however, it is over simplistic to think that any economic development program can effectively propel a local, regional, or state economy to sustainable heights. In fact, there is virtually no evidence that supports the efficacy of economic development, if one differentiates between economic growth, and economic development. We need to re-frame the economic development discussion from one grounded in capital recruitment, and economic development organizations. An ecosystem model that embraces the complexity of a community’s health is a good starting point. We are all stakeholders that have a tendency to work in silos. Whether we are economic developers, educators, social service providers, housing advocates, environmentalists, etc.; we need to learn to enter in a true dialogue, and build open, collaborative systems to build healthy communities. The necessary ingredient to this challenge is emotional maturity, and leadership.

    1. I like how you said that — “emotional maturity and leadership.” One of my big questions is how to engender that in the local government/private sector world….goes back to the Enlightenment and Progressive optimism over human potential, if we want to get deep about it. Anyone have any bright ideas on how we get there?

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