Making the Way for Inclusive Economic Growth

an arrow drawn through a chalk maze

Economic inequality remains one of the most pressing challenges of our time. It manifests in various forms, including disparities in income levels, educational attainment, healthcare access, and social mobility. The unequal distribution of income, wealth-building assets, and advancement opportunities pose difficulties for both individuals and the communities in which they reside. The growing divide hampers economic progress and perpetuates cycles of poverty and exclusion. This fact has led an increasing number of communities to proactively address the root causes of wealth disparities and the implications of economic exclusion with an inclusive approach to economic development. By widening the traditional perspective of the practice to incorporate diversity, equity, and inclusion (DEI), economic developers are aiming to build more equitable outcomes for individuals and their communities.

TIP’s ongoing work with the International Economic Development Council (IEDC)—the nonprofit, nonpartisan membership organization serving economic developers—highlights the pivotal role the profession can play in broadening access. The largest organization of its kind, IEDC has taken a proactive stance in its efforts to help eradicate structural racism and promote opportunities for wealth creation in communities of color. One of the ways IEDC is addressing these issues is through the implementation of its Equitable Economic Development Playbook Initiative. The initiative takes a holistic, three-pronged approach to DEI: (1) assessing how traditional economic development contributes to inequitable outcomes; (2) educating the field of its findings and possible solutions via a playbook publication, webinars, articles, and other educational programming; and (3) engaging communities to develop and implement strategies that address their unique equity challenges.

TIP was selected to assist IEDC with the third component of the initiative in 2022 by guiding five economic development organizations (EDOs) in the creation of Equity Action Plans. In this role, TIP facilitated two cohort sessions focused on creating a plan framework and reviewing progress made throughout the year, provided one-one-support, and created opportunities for peer learning. Each community’s approach to inclusive growth varied. However, a common thread throughout the five plans was improved access—be it to business development, professional advancement, or wealth generation opportunities.

1. Procurement

The City of El Paso, Texas, sought to utilize equitable procurement practices as an advancement tool for minority- and women-owned business enterprises (MWBEs). As a majority-minority community (82 percent of the population is Hispanic) with roughly half (44 percent) of its businesses being Hispanic/Latino owned, El Paso aimed to educate, train, upskill, support, and nurture minority-owned businesses to level the playing field in the procurement space. Their efforts included strategies to increase leadership engagement to grow the number of bids overall as well as the number of local MWBEs doing business with the City. The creation of a Business One Stop Shop with a Procurement Academy was also outlined as an effective method to increase the number of MWBEs that understand how to navigate the City’s bidding process to ultimately secure contracts. Not only will this approach strengthen El Paso’s supplier base, but it will also create broader societal benefits by generating economic opportunity for disadvantaged communities.

2. Workforce development

Elevate Rapid City, western South Dakota’s EDO, set out to increase participation of its Native American population in the workforce. Native Americans represent about one tenth of the population of Rapid City, but they are not proportionately represented in government or private leadership and are disproportionately represented in the unhoused and unemployed populations. Elevate Rapid City’s approach to improving the workforce outcomes of its Native groups was largely based on leveraging partnerships and engaging existing employers. Strategies included increasing diversity in the organization’s Elevate Leadership Institute, creating and supporting a “Building Bridges to Boards” program, and providing a Cultural Awareness and Poverty 101 Training to employers. Through these efforts, Elevate Rapid City hopes to better integrate its Native population into the workforce by improving their options for professional advancement and providing avenues for economic empowerment.

3. Organizational equity

Montgomery County Economic Development Corporation (MCEDC), a public-private EDO in Maryland, aimed to introduce a DEI lens to its practices and programs with both internal and external objectives in mind. Internally, the MCEDC sought to increase the sense of belonging among its staff. Strategies included creating an organizational mission or identity statement reflective of the MCEDC’s DEI goals and conducting staff and board training. Strengthening the regional entrepreneurial ecosystem for people of color was the focus of the organization’s external equity planning. This effort included building capacity (through financial and other business acumen training) and increasing access to capital (through the creation of a new loan fund and improved connections with the angel investment community). Implementation of the internal programming will be tracked over time and measured against the sense of belonging reported by staff. MCEDC plans to track the impact of its external work by coordinating metrics and reporting with other Montgomery County departments.

4. Neighborhood revitalization

St. Louis Development Corporation (SLDC), the economic development arm for the City of St. Louis, Missouri, is leading ongoing efforts to revitalize the Martin Luther King corridor in alignment with its Economic Justice Plan (EJP). This revitalization effort requires both place-based (real estate investments) and people-focused (entrepreneurship and workforce) strategies to align with the EJP’s three broadly defined categories: economic empowerment, equitable and inclusive development, and neighborhood transformation. To support this work through its Equity Action Plan, the SLDC first established the goal of building a world-class small/women/minority-owned business ecosystem. Second, the organization vowed to champion a more equitable, transparent, and accountable model for undertaking economic development. And third, the SLDC committed to capacity building by investing in neighborhood planning and community-driven implementation. The long-term outcomes desired through these activities are increased household income and wealth (indicators would include improved credit scores and net income) as well as educational attainment (marked by measures such as growth in credentials of value, numeracy, and literacy) in the revitalized corridor.

5. Real estate development

Village Capital Corporation (VCC), a community development financial institution, focused its action plan on integrating racial equity into the real estate development ecosystem in Cleveland, Ohio. VCC’s Equity Action Plan centered on two primary strategies: guiding emerging minority developers through the development process more effectively and increasing awareness of available resources. Under the first strategy, VCC would secure the support of a broad coalition of stakeholders and partners to create an Equitable Development Ecosystem Collaborative. With this effort in place, the organization would then lead efforts to coordinate and map programs and resources across the collaborative, resulting in a tool to help developers and contractors navigate the development ecosystem in Cleveland. Additional actions included creating mentor networks and identifying more flexible products to fill lending gaps. The success of these efforts will be measured by an equity scorecard or index.

Addressing economic inequality requires “a movement, not a moment,” as one of the 2022 cohort members so succinctly stated. While it will take ongoing and intentional effort to undo the damage caused by biased systems and practices, the outcomes are worth it. By addressing economic inequality, communities can foster a culture of inclusivity, reduce social tensions, and promote a sense of shared responsibility. Economic developers stand to play a vital role in unlocking the full potential of individuals and communities, leading to higher levels of productivity, increased consumer spending, and sustainable economic growth.

The presentation of the finalized Equity Action Plans at IEDC’s 2023 Leadership Summit in Tucson, Arizona, was not a culmination of the work but a jumping off point. TIP was honored to assist the 2022 cohort in this process and to be selected once again to support the 2023 cohort, which is comprised of five community development financial institutions. The firm’s work with IEDC has been a welcomed opportunity to support the community leaders who will be sustaining this movement. TIP looks forward to following the economic growth that will be achieved in communities across the US through initiatives that create equitable access to opportunity.

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