Economic development efforts continue to evolve and some experts think a focus on attracting workers is the “fourth wave” in those efforts.
Steve Deller, a professor of agricultural and applied economics at the University of Wisconsin-Madison, said during a recent webinar that new data suggests it might be time for new approach in economic development.
In the past, efforts were based on the assumption that creating jobs draws people, but in some cases attracting people might be a better place to start.
Deller said the first wave of development efforts in the United States focused on attracting large industrial businesses by offering incentives such as lower taxes, reduced regulation, lower costs for labor, land and construction.
The next efforts focused on smaller businesses and start ups, as data showed many of them were creating most of the new jobs, according to Deller. There are tools such as better access to capital and technical resources for new businesses.
Deller said the third wave was growth of public/private partnerships focused on geographic or industry clusters. It resulted in regional cooperation, industry networks and building stronger institutions such as technical colleges and universities with business or industry focused curriculum.
The common wisdom that people follow jobs is the basis for each of those efforts. But Deller said there are studies that show that innovation driven by people coming to a region or community can drive job creation, reversing that common wisdom. Deller also said in many places there is a structural labor shortage meaning there are not enough people to sustain job creation.
“Comminities have started to shift their focus away from thinking about jobs, jobs, jobs, to thinking about people, people, people” Deller said.
“People vote with their feet,” Deller said. “Quality of life matters.”
The webinar hosted by University of Minnesota Extension Department of Community Development and the University of Wisconsin-Madison, Division of Extension said many communities are asking, “What makes this a great place to live? Why would people want to live here?”
Deller said that is why there are now communities focused on creating a “sense of place” with community spaces like parks, good schools, walkable neighborhoods, childcare and eldercare initiatives and mixed use development.
Brigid Tuck an analyst with the University of Minnesota Extension said she reframes Deller’s data and conclusions when she meets with communities about their economic development efforts. She said it helps community leaders to decide how to focus their resources. Tuck explains communities can focus on:
- Industrial recruitment
- Grow your own
- Cooperation and partnership
- Resident recruitment
The efforts do not have to be exclusive of each other and Tuck said one community’s solution will not be right for another.
