Four Pivot-Points for Rebuilding Local Economies

From “Tools You Can Use” E-newsletter. Copyright Fieldstone Alliance (formerly Wilder Publishing Center). All rights reserved. Sign-up for “Tools” at www.FieldstoneAlliance.org and get free management tips every two weeks.

Contents

Four Pivot-Point Strategies

1. Revitalizing your commercial district
2. Developing microbusinesses
3. Developing the community workforce
4. Growing good neighborhood jobs

From Becky Andrews, Marketing Manager, Fieldstone Alliance:

MANY OF YOU are deeply involved in community building efforts. This issue of Tools You Can Use focuses on key strategies in community economic development.

In his groundbreaking work The Community Economic Development Handbook, author Mihailo (Mike) Temali identifies four strategies, or “pivot points,” and shows how community-based organizations can turn them into economic engines for family and community impact. These economic pivot points are the community’s

1. Commercial district
2. Microbusinesses
3. Workforce
4. Job opportunities

Let’s look at each.

Four Pivot-Point Strategies

1. Revitalizing your commercial district

A neighborhood’s “main street” represents the “face” of the community—what most people know of a community. This street forms perceptions, and perceptions—be they negative or positive—often lead to reality. In the eyes of customers and businesses, highly visible commercial districts that deteriorate are undesirable. For low-income communities, therefore, commercial district revitalization is critical. Neighborhood business and resident groups have had great success with revitalizing commercial districts.

2. Developing microbusinesses

“Microbusinesses” are often defined as having five or fewer employees. Most low-income communities lack opportunities and assistance for local entrepreneurs to start and grow these tiny businesses. These entrepreneurs, if nurtured, can generate substantial economic activity in a community. Equally important, they can fill vacant storefronts, serve as positive role models and gathering places, bring in new goods and services, create local jobs, and bring positive momentum to all community economic development efforts. Community economic development groups can do a great deal to find and support these valuable neighborhood assets.

3. Developing the community workforce

The largest single economic problem in low-income neighborhoods is unemployed or underemployed residents. Many of these people lack the skills, connections, or support necessary to get and keep good jobs. For most residents, the best path to economic development is training and placement in jobs with decent pay and prospects for advancement. Community economic development groups can support programs that help increase the number of residents who land such jobs.

4. Growing good neighborhood jobs

Certain types of growing businesses create a steady stream of jobs that low-income residents can obtain at their level of work experience and education, that pay above minimum wage, and that provide some job benefits and career advancement opportunities. Community economic development groups can work to identify which businesses these are, both inside their neighborhood and in their metropolitan economy. In addition to attracting more of these businesses to their neighborhood, development groups can help them overcome obstacles that restrict their growth, so they can produce more good jobs for neighborhood residents.

How to Decide Which Pivot Point to Tackle First

Community groups, especially smaller ones, should not attempt to work on all four pivot points at once. In fact, the most important beginning step is the choice of which pivot point to tackle. This requires an assessment of the current economic conditions related to each pivot point: the community’s commercial district, the employment status of its residents, the ability of microbusinesses to start up and grow, and the number of businesses growing good neighborhood jobs in your community. The group should also research the regional and national economy to understand the larger economic context in which your neighborhood operates.

Assess current conditions

This assessment is a general one—a preliminary investigation of current conditions to help in the selection of the first pivot point.

At this stage, the idea is to capture some numerical facts, such as unemployment rates and commercial vacancy rates. The group should also gauge community preferences—people’s perceptions of the neighborhood and its future. The assessment should also determine what changes people would like to see over the next five years.  

The group can gather information at the library, public agencies, through simple observation, and through conversation with local residents and business leaders. The group should talk with lots of people and capture the information as thoroughly as it can. It should engage many different people from the neighborhood to give input and to gather information. Many community groups recruit residents, arm them with checklists, and involve them in the investigation. Community groups can also hold meetings or attend neighborhood functions to ask people for their opinions and observations.

This assessment should not be a major, six-month project but a fun exercise in community building with a bit of Internet and library research thrown in. After selecting which pivot point to focus on, the community group should do a second, more specific assessment of conditions relevant to that pivot point.

Choose the strategy that meets two important conditions

After assessing the local economy (and taking a good look at the organization’s strengths), the group has the information it needs to choose its first pivot-point strategy. It should choose the strategy that does the best job of satisfying both of the following conditions:

First, working on this pivot point will significantly improve the economy of the community because

• The strategy addresses a major problem immediately.
• The community has some strong potential resources to work with. (For example, a commercial district rich with impressive buildings ready for rehab, a thriving culture of microbusinesses ripe for development, or a wealth of small manufacturing businesses that could expand and grow new local jobs.)

Second, the organization can succeed with this pivot point by using its current resources and by taking advantage of opportunities on the horizon. The organization must come to this conclusion after an assessment that includes evaluating the

• Skills and available time of staff and board members, relative to each pivot-point strategy
• Interest of funders to support certain strategies
• Potential partnerships that can make one strategy or another successful
• Presence of existing programs that could do more with a boost from your group

Summary

Community groups wishing to get involved in economic development are successful when they carefully assess economic conditions and work on one carefully chosen pivot point. After initial successes and evidence of repeated, sustainable success, groups can move on to another pivot points while maintaining efforts on their initial choice.

Many community economic development organizations across the United States have grown in size and capacity and are now successful with three or even all four pivot-point strategies. It is inspirational to see the sheer numbers of people, buildings, businesses, and public spaces that they have impacted over the years, and how their communities are stronger and more unified as a result.

When the four pivot points are all being addressed effectively, the result is greater than the sum of the parts. New investments coming from within and from outside the community are far greater than the dollars directly spent or leveraged by the community economic development group itself. The combined strategies have a catalytic effect, as the neighborhood exports goods and services and attracts customers from outside its own boundaries. New money comes into the local economy, rather than draining out. The neighborhood successfully rejoins the regional economy.

Most importantly, much of this new investment takes place according to a plan laid out by the community and its community economic development group, thus benefiting existing residents and businesses. The community—not some outside agency or large, disinterested corporation—claims its own success. Thus, the community is better able to sustain that success and build on it.

Additional Resources
See our annotated list of community economic resource links

Read more