Last month, I had the pleasure to speak on a panel at the International Economic Development Council (IEDC) in St. Louis. Here’s what I learned: when it comes to economic development, small is beautiful.
First, what is economic development? It’s the art and science—usually practiced by local governments, chambers of commerce, and public-private partnerships—of recruiting, attracting, and retaining businesses in a specific city or region. For example, municipalities try to attract retailers to their town because of the jobs, shopping opportunities, and sales tax revenue that retailers bring. Or they try to attract big companies because of the high-paying jobs that bring new dollars into the community. Economic development is a long-standing profession (despite the sometimes seedy underbelly of, say, unfair tax breaks that favor national chains over local businesses) that has done plenty to help cities and towns of all sizes grow and thrive.
Many economic developers have staked their careers on big, high-visibility wins. When a big new business comes to town, hundreds or maybe thousands of jobs come with it. Hundreds of thousands of square feet of commercial real estate gets filled up. The mayor shows up for a big ribbon cutting. And everyone in the community—from the local schools to the local merchants—hopefully gets a nice economic bump. Sounds good, right?
But there are flaws in this “big win” model. As the economy continues to limp along, large companies are less inclined or simply unable to make a big play in a new market. Even as the economy recovers, large companies may not need to establish a big new footprint, opting instead for allowing their employees to work remotely. Or, in their zeal to bring new businesses to town, governments may give huge public subsidies to companies that eventually go under, taking their public money with them (um, Solyndra, anyone?).
At IEDC in St. Louis, I had a chance to explore a different model: rather than trying to recruit or attract, say, one 200-person company to town, what if economic developers could recruit or attract 200 one-person companies? Mark Lautman, one of my fellow panelists at IEDC, is a 25-year veteran of the economic development trade and the head of Lautman Economic Architecture. In Albuquerque, NM, Mark piloted this idea of building an economic development strategy around telecommuters, independent consultants, freelancers, entrepreneurs and other “location-neutral workers.” Mark created a space along with a set of programs designed to help these location-neutral workers grow and thrive.
Those of you familiar with NextSpace won’t be surprised to learn that Mark’s creation looks a lot like a coworking space. Indeed, for the past several years, NextSpace and the other 500+ coworking spaces across the country have been quietly doing the kind economic development work that Mark advocates, often without knowing it. But Mark is the first guy in his profession that I know of that is using the coworking model as an overt tool for economic development. Even better, he’s spent a year telling his colleagues that their profession is changing before their eyes, that the old “big win” model of economic development is under stress, and that aggregating “small wins” is the way of the future.
At NextSpace, we couldn’t agree more. Nothing makes us prouder than watching our members—now over 700 strong across all five of our locations—survive and thrive in this tepid economy. Economic developers, take note: that’s 700 people who are gainfully employed, often creating cutting-edge products and services for the global marketplace, who are a rock-solid part of their local economies. Individually, they don’t create the headline-grabbing “big win” that economic developers often look for. But by aggregating the “small wins” that our members create every day, the NextSpace community is an enviable force for economic development.
Want to tap into the combined economic potential of the NextSpace community? Give us a call, drop us a line, or just stop by. We’d love for you to join us.
The Power of Small Wins
July 19th, 2012 by jeremy