Community Capacity-Building Archives

August 25, 2020August 25, 2020

U.S. Kitchen Incubators: An Appetite for Food-Based Entrepreneurship

Economic development organizations seeking to create a more dynamic, entrepreneurial, and inclusive economy would be wise to pay attention to the U.S. kitchen incubator industry.

U.S. kitchen incubators — sometimes characterized as commercially-licensed kitchens, shared-use kitchens, commissary kitchens, kitchen accelerators, or ghost kitchens — are a unique type of culinary micro-enterprise. The terms are used interchangeably, but there are important distinctions between them. The primary distinguishing feature is the degree to which supportive services are provided to wholesale, retail, and catering food entrepreneurs. Shared-use kitchens offer minimal or no support; incubators provide expertise to new and early-stage startups; whereas accelerators look to scale up operations and achieve significant growth for established, investible startups (American Communities Trust, Econsult Solutions, Urbane Development, 2016).

These culinary production facilities are not to be confused with community kitchens, which serve neighborhood stakeholders and institutions, such as St. Mary’s Food Bank Community Kitchen and Local First Arizona Community Kitchen in Phoenix.

Industry surveys indicate that the number of U.S. kitchen incubators grew from no less than 135 in 2013 to more than 200 in 2016, expanding to 600+ across the 48 contiguous states and District of Columbia in 2019 (Econsult Solutions, Urbane Development, The Food Corridor, Catharine Street Consulting, 2020). They operate in urban (52 percent), suburban (27 percent), and rural (21 percent) areas, but are heavily concentrated near large cities (Econsult Solutions et al., 2020). Their popularity stems from the “locavore movement” that connects food producers and consumers within the same geographic region, the creation of food-based makerspace that focuses on handmade products, and a growing recognition that entrepreneurship provides an opportunistic pathway to economic success (The Food Corridor, 2020).

Culinary Entrepreneurship

The relationship between U.S. kitchen incubators, culinary entrepreneurs — chefs, caterers, farmers market and festival vendors, food truck proprietors, bakers, and specialty food producers — and the broader concept of small business entrepreneurship, is powerful.

National Trends

Let’s take a look at the broader picture.

According to the Kauffman Foundation, the rate of new entrepreneurs — or the number of non-business owners that start a new enterprise each month — has fluctuated between 0.27 and 0.34 percent of the adult population during the past two and a half decades. Expressed differently, roughly 300 out of 100,000 adults create a new business.

The rate of new entrepreneurs is highest among Latinos, who have consistently outpaced other races and ethnicities over time. New entrepreneurs who are Asian and White compete closely for second and third position. Comparatively, the rate is slightly lower among African-Americans (see chart below).

Richard Mulligan | The ED Advisor
Source: *Kauffman Indicators of Entrepreneurship, Ewing Marion Kauffman Foundation*, 2020

Overall, the rate of minority entrepreneurs has increased; while the rate of entrepreneurship among immigrants is significantly higher than for the native-born (see chart below).

This is important because the gap in wealth between immigrants and native-born citizens decreases considerably through business ownership.

Those with the least education have proven themselves to be more prolific when it comes to entrepreneurship in comparison to other groups with higher education attainment levels (see chart below).

Put together, early-stage entrepreneurship is fertile ground for a wide range of ethnic and racial groups looking to grow a business. This is particularly true for U.S. kitchen incubators, where on average, 52 percent of tenants are women and 30 percent are minorities. The diversity of food entrepreneurs is even more prominent in larger metropolitan areas like New York City, San Francisco, Seattle, and Chicago (Econsult Solutions, Urbane Development, The Food Corridor, Catharine Street Consulting, 2020).

U.S. kitchen incubators provide food entrepreneurs with a low-risk opportunity to access their own food production equipment and preparation space — a challenge for startups that is otherwise cost prohibitive. At the same time, entrepreneurs receive training, mentoring, and the opportunity to collaborate with a large network of food companies, while working to refine their business model.

From a “big picture” perspective, kitchen incubators serve as a catalyst for inclusive and equitable economic development.

Business Models

Similar to their tenants, kitchen incubators operate under a diverse set of business models, operating as stand-alone facilities or accessories to markets, community centers, and housing projects, or cloud kitchens. Facility goals are just as diverse, striving to fulfill owner-operated, corporate, non-profit, government, and university-sponsored missions. They can be self-funded, or receive financial support in the form of grants, debt-financing, corporate sponsorship, or investor seed funding. Some are run by culinary entrepreneurs who started their own business and decided to capitalize on the opportunity to lease space and supplement their cash flow. Other facilities are more intentional about supporting entrepreneurs, while providing a living income for their founders. Hence, there is no “standard” kitchen model that can be applied to a region’s culinary ecosystem (Colpaart, 2018).

A key point to remember is that kitchen incubators — like their food business tenants — are startup businesses that need to perform their own due diligence in terms of market research, business model development, financial planning, and marketing. In this regard, it is critically important to customize operations to serve their local communities.

Food Innovation Districts

On a state and regional level, U.S. kitchen incubators are taking root in food innovation districts. A food innovation district is defined as “a geographic concentration of food-oriented businesses, services and community activities that local governments support through planning and economic development initiatives in order to promote a positive business environment, spur regional food system development and increase access to local food,” according to Patty Cantrell of Regional Food Systems Solutions, LLC.

Michigan is a national leader in the establishment of food innovation districts — an outgrowth of the Michigan Good Food Charter, a statewide policy platform that envisions sourcing 20 percent of Michigan’s from Michigan food markets and production, providing 80 percent of the population with access to locally-grown, healthy foods. Several districts have already taken hold in the Eastside Neighborhood, Lansing; Eastern Market, Detroit; Grand Traverse Regional Market, Traverse City; Marquette Food Co-op and Hub, and; Grand Rapids Downtown Market, Grand Rapids.

Food Innovation Districts: An Economic Gardening Tool is designed to help other government and community leaders seize opportunities with local and regional food. Outlined is the process and tools used to create districts, which can be applied elsewhere in the nation. The districts are being put to practical use by fostering regional food hubs, kitchen incubators, farm-to-table retail and restaurants, farmers markets, food festivals, nutrition and cooking education, healthy food assistance, urban agriculture production, and community kitchens.

Culinary Incubator and The Kitchen Door have compiled lists of more than 1,000 kitchens from around the country. Select examples of incubator facilities identified in their respective databases for Greater Phoenix are shown below*:

Chef’s Shared Kitchen	Mesa, AZ
Commissary and Catering Kitchen	Tempe, AZ
Freedom Kitchen	Scottsdale, AZ
NT Kitchen	Phoenix, AZ
Phoenix Commercial Kitchen	Phoenix, AZ

Source: CulinaryIncubators.com

National best practices for kitchen incubators include*:

Commonwealth Kitchen	Boston, MA
Hot Bread Kitchen	Tempe, AZ
Pacific Gateway Center Culinary Business Incubator	Phoenix, AZ

Source: American Communities Trust, 2016

Phoenix 2025 Food Action Plan

As part of the City of Phoenix General Plan, residents approved a Healthy Food System goal to promote the growth of a healthy, affordable, secure and sustainable food system that makes healthy food available to all Phoenix residents (2015). The 2050 Environmental Sustainability Goals include a Local Food System Goal to maintain a healthy, sustainable, equitable, and thriving local food system (2016).

Incorporated in the Action Plan is a strategy to create a food business rental incubator in the South Central Avenue Corridor, possibly as a food hall. Links to The Shared Kitchen Toolkit: A Practical Guide to Planning, Launching, and Managing a Shared-Use Commercial Kitchen, the Minnesota Institute for Sustainable Agriculture’s Commercial Kitchen Guide, and CulinaryIncubator.com interactive mapping tool are listed as resources under the “Commercial Kitchen” category.

Other resources are identified for community gardens, farm-to-school, farmers markets, food co-ops, food hubs, food waste, healthy living, and urban agriculture.

Included in the Appendix is the South Phoenix Food Action Plan, which taps into the U.S. Environmental Protection Agency’s (EPA) Local Foods, Local Places Program, with management and technical assistance from the U.S. Department of Agriculture, Center for Disease Control and Protection (CDC), and Delta Regional Authority (DRA).

Meanwhile, a development proposal to create a “food innovation center” has surfaced in West Phoenix. Proponents hope to convert an old Kmart building into a center that serves nontraditional food businesses (e.g., food trucks, catering firms, and food delivery businesses). A career training center is also envisioned for the 112,000-square-foot building. Maricopa Community Colleges is conducting a feasibility study for Phoenix’ Community and Economic Development Department.

All of this points to the growing and evolving nature of kitchen incubators, their ability to provide food entrepreneurs with an education in running a business, and a means to provide food industry jobs and education opportunities for those looking to climb the economic ladder.

Editor’s Note: *These are not meant to be all-inclusive lists, but rather a partial sample of kitchen incubator facilities.

June 14, 2020June 27, 2020

The Growing Divide Between the Haves and Have-Nots

The Growing Divide Between the Housing Haves and Have-Nots

Photo by Brian Babb on Unsplash

Affordable Housing is a Critical Part of Economic Development

Most economic developers occupy a privileged position in the community. They get to rub shoulders with academic administrators, corporate executives, government officials, media representatives, and other influencers. They might serve on the board of directors for a local charitable organization, or take a leadership role in philanthropic fundraising for arts and cultural programs. What doesn’t always get their attention are current trends in income and economic inequality, the growing divide between the “haves” and “have-nots,” and what they can do about it.

A case in point is affordable housing.

Lara Fitts, President and CEO of the Greater Richmond Partnership, writes:

“A few months ago, I was talking with a fellow economic development professional who asked me, why I cared about affordable housing because in his words, ‘affordable housing isn’t economic development.’ In his view, economic development is meant to help companies facilitate job creation, enhance the community’s tax base, and provide opportunities for increasing household incomes. However, what happens when a community is so successful in its economic development efforts that the supply of housing decreases and prices escalate so quickly that jobs and income growth don’t keep up?”

The truth of the matter is that affordable housing is a critical part of economic development.

Quality of Life

To ensure they’re able to attract skilled workers, companies are increasingly interested in localized quality of life factors in the site selection process. In Area Development’s “34th Annual Survey of Corporate Executives and 16th Annual Consultants Survey,” quality of life ranked 4th, behind only highway accessibility, availability of skilled labor, and labor costs and ahead of 24 other site location factors like state and local incentives and accessibility to a major airport. Baked into the quality of life recipe is a key ingredient — an employee’s ability to secure adequate housing.

Phoenix-Mesa-Scottsdale MSA
Homeownership Market — Richard Mulligan | The ED Advisor *Source: Area Development, 34th Annual Survey of Corporate Executives and 16th Annual Consultants Survey*

Affordable Workforce Housing

Consider for a moment how housing affects a business’s competitiveness strategy — indeed, a region’s competitiveness — in terms of attracting and retaining talent. When employees can’t afford to live near their place of work, employers have to spend more money on relocation expenses, wages, and face higher turnover rates. Where employees choose to live is also impacted by the work situation of their spouse, partner or significant other; commute times (the average is 25-35 minutes); neighborhood characteristics; schools; and safety.

Now ask yourself, when you’re considering a job offer, how long does it take before you start to factor in salary, housing options, and commute time? Then, for the sake of argument, imagine that you have accepted a position on the same pay scale as an “essential worker” — police officer, firefighter, nurse (LPN), or public school teacher. Your income falls within 60 to 120 percent of area median income. Mortgage lenders impose a limit of 28 to 30 percent of household income for principle, interest, taxes, and insurance (PITI). Given these parameters, what are your housing options?

The homeownership market appears to be out of reach — aside of being able to tap into a second income or some other type of financial assistance. This assumes prospective homeowners are looking to buy a medium-priced home in the Phoenix-Mesa-Scottsdale MSA, which has an affordability index of 6 (on a scale of 1 to 10; 1 is the most affordable, 10 is the least affordable), per Kiplinger (2020).

Phoenix-Mesa-Scottsdale MSA
Rental Market — Richard Mulligan | The ED Advisor *Source: The National Housing Conference (2020)*

This leads a prospective employee to the rental market, where a 1- or 2-bedroom apartment or other residential rental property becomes financially palpable. Even under these more favorable conditions, the 3-bedroom option is too expensive.

The State of the Nation’s Housing

The Joint Center of Housing Studies of Harvard University’s report, “The State of the Nation’s Housing 2019,” provides an overview of pre-coronavirus pandemic housing trends. Their researchers found that despite household growth returning to a more normal pace during the past decade, housing construction wasn’t able to maintain the same rate of progress, keeping pressure on home prices and rents and eroding affordability.

Factors contributing to the continued shortfall in housing supply include relatively weak household growth since the Great Recession, with the national vacancy rate for both owner-occupied and rental units falling to 4.4 percent, its lowest point since 1994. Influencing the slow construction recovery is a wariness on the part of builders and lenders, who haven’t forgotten how difficult it was to work through the housing boom of the early 2000s, which created an excess supply of homes. Labor shortages, complicated by an economy nearing full employment, and the rising costs of land and materials made it unprofitable for developers to build for the middle market. Instead, home builders chose to build in the higher end of the housing market, where they’re able to cover their expenses. Regulatory restrictions on higher-density development and not-in-my-backyard (NIMBY) opposition made it even more challenging to provide affordable housing products.

In terms of housing income and affordability, cost burdens have continued to move up the income scale. National Association of Home Builders (NAHB) economists have calculated that more than half of U.S. households — 63 million to be precise — are unable to afford a $250,000 home. In a similar vein, the Federal Reserve Bank of St. Louis determined that national house price indices have outpaced increases in per capita income and inflation since 2012.

One of those indices is the NAHB/Wells Fargo Housing Opportunity Index, which measures the share of homes that would have been affordable to a family earning the average median income, based on standard mortgage underwriting criteria. The index utilizes two major components — income and housing cost — and reveals how housing costs have worsened in recent years.

City of Dallas

The City of Dallas (pop. 1,343,573) — our nation’s ninth-largest municipality — has Housing and Neighborhood Revitalization, the Office of Economic Development, and Planning and Urban Design organized under the direction of Michael A. Mendoza, Chief of Economic Development and Neighborhood Services. This underscores the interdependence that exists between community development, economic development, and planning.

Dallas’ Housing Policy Toolkit consists of the following:

Market Value Analysis

The Market Value Analysis (MVA) is a data-driven tool that helps residents and policymakers analyze the local real estate market at a census block level. It is built on local administrative data and validated by local experts. This analysis was prepared by The Reinvestment Fund. Public officials and private actors utilize the MVA to more precisely target intervention strategies in weak markets and support sustainable growth in stronger markets.

Nine market types are identified on a color-coded spectrum of residential strength or weakness, along with the number of Census Block Groups in each market type. Included are multiple tabs for key indicators — median sales price, sales price variance, percent owner occupied, percent vacant homes, percent new construction units, percent rehabilitation units, percent foreclosure filings, and percent code violations.

The MVA also provides tabs to other geographic data for mapping purposes — reinvestment areas, bond projects, City land, tax increment finance (TIF) districts, public improvement districts (PIDs), New Markets Tax Credits, Opportunity Zones, Community Development Block Grant (CDBG) eligible areas, R/ECAP areas, DISD and RISD elementary schools, and DISD and RISD middle schools.

Comprehensive Housing Policy

Dallas’ Comprehensive Housing Policy is guided by the Market Value Analysis and identifies a housing shortage of approximately 20,000 units. Six out of ten families are housing cost-burdened (spend more than 30 percent of income on housing), making it difficult to build asset wealth and break multi-generational cycles of poverty.

Three overarching goals drive the policy: (1) Create and maintain affordable housing units throughout Dallas; (2) Promote greater fair housing choices; and 3) Overcome patterns of segregation and concentrations of poverty through incentives and requirements. Various housing and financial assistance programs, ranging from creation of a Housing Trust Fund to the adoption of an ordinance amendment that allows homeowners to build and rent Accessory Dwelling Units (ADUs) are contemplated in the housing policy.

Strategic Economic Development Plan

Complementing Dallas’ Housing Policy Toolkit is the Draft Strategic Economic Development Plan (2019). During the stakeholder engagement phase, respondents to an online residential survey identified affordable housing as a leading issue (ranked #3 behind quality of public schools and City infrastructure). The market assessment phase determined that Dallas has the second largest share of homeowners whose monthly owner costs are 30 percent or greater than household income, when compared to Chicago, Atlanta, Denver, Phoenix, Austin, Houston, San Antonio, and Fort Worth.

The Strategic Action Plan phase outlines four overarching goals, one of which is “Opportunity for All: An Equitable and Inclusive Economy.” Under this goal, interested parties will find “Strategy #1: Revitalize South Dallas/Southern Dallas,” that devotes a significant amount of attention to “Affordable Housing.” This is a best-practice example of how affordable housing policies are harmonized with Dallas’ economic development initiatives.

The link between affordable housing and economic development is stronger than many practitioners might realize. Too often, the creation and implementation of a diversified housing program is viewed as something that has or should be relegated to a separate community development or human services department. As a result, limited thought is given to the impact of affordable housing on local economic development. However, the relatively high ranking of quality of life in site selection, the prominence of affordable housing in quality of life assessments, and the high priority that citizens place on having a safe and decent place to live should give economic developers pause for thought.

Economic developers have the privilege of attending high-profile groundbreaking ceremonies for assisted corporate locates and other business projects. Those on the guestlist often read like a “Who’s Who” list of C-level executives, elected officials, and other dignitaries; people who reside in the top five percent income stratum. Behind the scenes are the assembly line laborers, call center operators, construction journeymen, distribution warehouse specialists, public sector “essential workers,” and retail associates who reap much smaller financial rewards. We owe it to them to make sure they share in the community’s economic growth.

Making affordable housing a reality, especially in locations that are close to work, maximizes their ability to build wealth.

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June 6, 2020June 27, 2020

The Age-Old Problem

Photo: Getty Images

Age discrimination needs to be a bigger part of the workforce conversation

Amidst a strong economy — before “social distancing” became part of the American lexicon — employers painted a picture of having to scramble to lure applicants. Nearly 7 in 10 employers reported talent shortages, the worst level ever and a jump of 23 percent from the previous year. That’s more than three times higher than a decade ago.

Richard Mulligan | The ED Advisor *Source: ManpowerGroup, 2020*

While employers struggled to fill positions, ProPublica and the Urban Institute were busy analyzing research data from the Health and Retirement Study (HRS), a premier source of multidisciplinary data that researchers use to address important questions about the challenges and opportunities of aging. They discovered that employers are hesitant to hire or retain older workers, potentially limiting their ability to stick around and retire on their own terms. Those unfortunate enough to be laid off have trouble finding a new job and experience long-term unemployment (ProPublica, 2020).

Between the time older workers enter the study and leave paid employment, 56 percent are displaced before they choose to retire. Only 1 in 10 of these workers ever recovers financially, earning much less than they did before their careers were disrupted. Years afterward, they’re still making up for ground lost and find themselves with fewer job prospects (ProPublica, 2020).

Richard Mulligan | The ED Advisor Source: ProPublica and the Urban Institute

An estimated 28 percent of stable, longtime employees sustain at least one damaging layoff by their employers between turning 50 and leaving work for retirement (ProPublica, 2020).

An additional 13 percent of workers who start their 50s in long-standing positions unexpectedly retire under circumstances that suggest they were encouraged to leave. They begin by telling survey takers they plan to keep working for many years, but, within a couple of years, they suddenly announce they’ve retired, amid a substantial drop in earnings and income (ProPublica, 2020).

So where’s the disconnect?

Age Discrimination

A primary culprit is the age-old problem of discrimination.

According to a 2018 American Association of Retired Persons (AARP) survey, 61 percent of older workers said they had either faced or seen age bias in the workplace; and 38 percent believe the practice is “very common.” A similar 2019 survey sponsored by Hiscox, a global specialist insurer, and conducted by Wakefield Research, found that 80 percent of older workers said their career trajectory had been impacted by their age, and 43 percent had left a company because they had experienced or witnessed age discrimination.

Feeding discriminatory hiring practices is the myth that older workers are somehow “washed up” professionally. Youth-obsessed hiring managers carry negative stereotypes about older workers, who are incorrectly viewed as being set in their ways, are less digitally savvy, are too highly compensated to retain, are complacent or unmotivated, and are difficult to manage.

To make matters worse, hundreds of the nation’s leading employers — Amazon, Cox Communications, Goldman Sachs, T-Mobile, and Facebook, to name a few — were found to have placed recruitment ads that excluded older age groups. They also shut out more experienced job applicants on Linkedin and other social recruting platforms. Such disclosures set off a wave of legal proceedings.

According to several civil rights groups — the American Civil Liberties Union, National Fair Housing Alliance, and Communications Workers of America, among others — some corporate recruitment ads were limited to “digital natives,” “recent college graduates,” or “people younger than 38.” Such hiring tactics are unfair, immoral, and illegal.

As part of a legal settlement with the plaintiffs, Facebook announced it would no longer allow businesses to buy targeted ads that potentially discriminate on the basis of race, gender, or age group. Anyone advertising home sales, employment opportunities, or credit offers — three areas where federal law prohibits discrimination in ads — no longer have the option of explicitly aiming ads at people on the basis of those characteristics. This policy change also applies to advertising on Instagram and Messenger, which are Facebook subsidiaries.

Despite this progress, age discrimination is an accepted bias that continues to pervade the hiring process in many organizations.

America’s Aging Demographics

Ironically, the discussion about age discrimination comes at a time when America’s population is growing older.

By 2060, the elderly share of the U.S. population (65 and older), which was 15.2 percent as recently as 2016, is expected to climb to 23.4 percent — an increase of 8.2 percent. Small percentage declines are predicted for the remaining cohorts: -2.1 percent (ages 45-64); -3.1 percent (ages 18-44); and -3.0 percent (under 18).

Compared to the younger population, the 65-plus crowd is the fastest growing segment of the American workforce.

Richard Mulligan | The ED Advisor Source: U.S. Census Bureau, 2020

Many people believe there is a strong correlation between America’s aging population and the Baby Boomer generation. That’s understandable, but inaccurate. Falling fertility rates and increases in life expectancy are the driving forces behind these demographic trends. This would have occurred even if the Baby Boom had never taken place. Baby Boomers have influenced the timing of America’s aging — at first, dampening its effect, but on the back end, accelerating it (Concord Coalition and Global Aging Institute, 2020).

Protecting Older Workers Against Discrimination Act (POWADA)

In January, the U.S. House of Representatives voted 261-155 in favor of H.R. 1230, the Protecting Older Workers Against Discrimination Act (POWADA). Sponsored by Representatives Bobby Scott (D-VA) and Jim Sensenbrenner (R-WI), the legislation would restore protections lost in a 2009 U.S. Supreme Court decision that required age to be the sole reason an employer fired or changed a worker’s job in order for the worker to win an age discrimination case.

The legislative process now shifts to the U.S. Senate, where bipartisan companion legislation (S. 485) is sponsored by Senators Chuck Grassley (R-IA) and Bob Casey (D-PA).

Our nation’s premier 50+ organizations — American Association of Retired Persons (AARP) and Association of Mature American Citizens (AMAC) — have thrown their support behind this legislation.

Unfortunately, age discrimination in the workplace is still disturbingly pervasive. Too many companies don’t seem to understand and appreciate the value of older employees. The positive qualities attributed to them — experience, perspective, adaptability, responsibility, commitment — can be tapped in many different ways. Measures such as the POWADA legislation are a step in the right direction toward eliminating discrimination and providing better access to quality jobs for older workers.

Countless workers in their 50s, 60s, 70s and beyond are actively engaged in their careers and enjoy working. Some are impacted by financial pressures caused by the COVID-19 lockdowns or Great Recession; some are caregivers for parents who live longer; others find meaning and self-fulfillment, or work to maintain their emotional well-being.

At 93, Tony Bennett, America’s iconic singer of traditional pop, big band, show tunes, and jazz music, has eleven concerts remaining on his 2020 tour. Franklin Graham, age 67, leads religious crusades and provides political commentary, all the while serving as CEO of the Billy Graham Evangelistic Association and Samaritan’s Purse, an international Christian relief organization. At 85, David McCullough, one of our country’s most beloved historians, known for his Pulitzer Prize-winning biographies of Harry Truman and John Adams, published his 13th book, “The Pioneers: The Heroic Story of the Settlers Who Brought the American Ideal West.” Nancy Pelosi, the 60th and 63rd Speaker of the U.S. House of Representatives, is 80 years old. Next year, the White House is slated to be occupied by one of two candidates who are working well beyond the age that most people start collecting Social Security. The incumbent, President Donald Trump, is nearly 74 years old. His challenger, former Vice President Joe Biden, will turn 78 less than three weeks after the 2020 Presidential Election.

Like many of today’s older workers, these prominent citizens are skilled, proficient, and have a strong work ethic. This leads to a priceless gift — the joy of work.

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May 19, 2020June 27, 2020

EDOs Digital Response: COVID-19

Photo by Brian McGowan on Unsplash

Economic development organizations (EDOs) are pivoting to digital technologies as the centerpiece of their disaster response to the COVID-19 crisis. The coronavirus pandemic has had a devastating impact on small businesses and workers. EDO’s are making a concerted effort to make real-time data publicly available, and help businesses navigate the complexity of COVID-19 relief and recovery efforts.

Business Resources

The most prominent digital response is the creation of EDO website pages that provide accurate and timely information on COVID-19 resources. Typically displayed are links to CARES Act funding, application assistance, and other financial resources. EDOs are pushing to get federal dollars in the hands of local businesses impacted by official stay-at-home orders, and the employees that work for them.

EDO COVID-19 resource pages are also designed to help businesses reopen (personal protective equipment, social distancing), stay open, operate safely, and build community support. The pages serve as a crisis information hub — a collection of finance, buy local campaign, charitable donation, testimonial, online education offering, and public health dashboards.

COVID-19 GIS Mapping Tool

Last month, GIS Planning released a free, interactive GIS data tool to map the spread and impact of COVID-19 for U.S. economic developers. The data tool is a customized version of the company’s Mapping Intelligence Component, displaying national and county-level data for the coronavirus alongside Chmura’s Economic Vulnerability Index. EDOs and chambers of commerce across the U.S. are invited to post the free tool on their websites. This allows them to get interactive, mobile-responsive data to their regional stakeholders. The COVID-19 data comes from The New York Times and is updated daily.

Restore Your Economy

RestoreYourEconomy provides up-to-date information on COVID-19 and its economic impacts. The website is managed by the International Economic Development Council (IEDC) with support from the U.S. Economic Development Administration (EDA) and IEDC’s Economic Development Research Partners program.

The website offers a host of digital material on COVID-19 topics: IEDC research, reopening the economy (by industry), financial programs, insights and guidance from economic development professionals, business and worker assistance, member surveys, crisis communication management, and webinars. EDOs also have access to COVID-19 survey and website templates that can be customized.

RestoreYourEconomy is an excellent source for sharing best practice information with public and private stakeholders who are looking to rebuild their economy.

SizeUp

SizeUp is a Fintech Internet service company dedicated to providing powerful business intelligence. They are taking a lead role in working with EDOs to better serve local small businesses and entrepreneurs with their digital software products.

During the months of March and April, SizeUp completely waived the setup fees to have their SizeUp Local Business Intelligence (LBI) product added to EDO websites. This allows local businesses to access SizeUp LBI for free directly from the EDO website.

EDOs taking advantage of this opportunity include the Greater Sacramento Economic Council, Maricopa, Town of Gilbert, and Arizona Public Service. Local businesses utilizing the SizeUp LBI product are able to benchmark performance, identify customers and suppliers, and find the best places to invest their advertising budget.

SizeUp also makes articles and white papers available for download. This includes Coronavirus Economic Development Case Studies and National Survey Results, a report that provides case study examples of how economic developers and policy makers are taking action in response to the COVID-19 crisis. Each initiative is intended to mitigate the devastating economic impacts of state lockdowns and stay-at-home orders on workers, families, and businesses. Featured sections in the document focus on transition work, online local business and entrepreneur assistance, engaging commercial property owners, corporate site selection, social distancing bingo, fashion and sports repurpose manufacturing, utility companies creating their own stimulus, swapping companies temporarily, the business of food, and tech industry partnership.

Business Attraction and Site Selection

Site Selection After COVID-19: Predictions From the Experts, a recent survey conducted by the Site Selectors Guild, an association of the world’s foremost professional site location consultants, in partnership with Development Counsellors International (DCI), provides insights on how COVID-19 impacts corporate location strategy.

Survey findings indicate that 52 percent of companies interviewed are pausing site selection projects, and 45 percent are moving forward with projects. Those surveyed also predict there will be a shift in global manufacturing and supply chain strategy, an uptick in on-shoring to North America, an increase in remote work that will shrink the demand for office real estate, and forsees the emergence of life sciences, logistics, and advanced manufacturing as “hot” industry clusters. Survey respondents encouraged EDOs to prioritize helping displaced workers find employment, closely followed by talent/workforce attraction initiatives. EDOs were also advised to keep up the communication with companies and site selection consultants.

ZoomProspector

Due to COVID-19 causing massive disruptions — cancelled executours, postponed familiarization tours, government travel restrictions, investors pausing to reconsider their strategic footprint — site selection consultants have been unable to undertake personal site visits to local communities. Until the pandemic subsides, EDOs are facilitating virtual site selection by showcasing properties with GIS Planning’s ZoomProspector. This digital tool gives site selection consultants the ability to access information on commercial and industrial sites, directly on EDO websites. Consultants are able to research and analyze properties and communities, collecting data on demographics, workforce, GIS, business/industry, education, and wages from the comfort of their office. Personal site visits will eventually resume, but prior to those occurring, EDOs capable of using technology to stay connected will have a competitive advantage.

Zoom

Because of COVID-19 social distancing requirements, EDOs are utilizing Zoom digital conferencing software to meet and work together. Zoom conferencing software helps people maintain human connections, irrespective of geographic location. EDOs are finding value in cost-effective, modern communications that cover video, audio, web, and chat, and easily scales to their needs.

Editor’s Note: To avoid “Zoombombing,” users need to be careful about sharing meeting links publicly. Instead of posting a meeting link to a Facebook group or in a promotional tweet, distribute information via a more private method, such as email. Meetings should be set to “private.” Be careful not to use your personal meeting ID. In its place, use a one-time meeting ID to make the meeting more secure.

COVID-19 has become an economic and health crisis like no other. The world is entering uncharted territory, but as the old saying goes, “Thinking will not overcome fear but action will” (Stone, 1962)

High performance economic development organizations are finding leadership opportunities in COVID-19. They are aligning expectations. They are focusing on strengths, successes, opportunities, and collaboration. They are providing accurate, real-time information. They are staying positive, and above all else, they are communicating, communicating, communicating.

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May 12, 2020June 27, 2020

5G Broadband: The Next Generation

Photo by Ookla®

Does your community’s strategic economic development plan envision a vibrant 5G broadband future?

Broadband infrastructure is critical for business growth, improvements in productivity, and economic competitiveness. Advanced broadband is essential for the delivery of business, education, government, healthcare, workforce development, and other Internet services. More than ever, communities connected to fast, reliable broadband are finding themselves on the winning side of the digital divide.

What is 5G?

Fifth-generation (5G) is the next generation of wireless technology. It refers to the latest deployment of mobile broadband networks that will eventually replace, or at the very least, enhance the fourth-generation (4G) of broadband cellular network technology. Operating in a similar fashion, 4G technologies succeeded 3G, itself an upgrade to the older 2G and 1G networks.

Each successive generation of mobile broadband is characterized by higher connectivity speeds and increased computing capacity. 5G cell towers are up to 100 times faster than current 4G technology. Where 4G cell towers can accommodate a few thousand Internet of Things (IoT) devices per square mile, 5G cell towers are capable of supporting millions of devices. 5G promises to unleash a torrent of industrial IoT applications and help make smart cities a reality.

Deployment

In 2020, the three largest U.S. wireless carriers — AT&T, Verizon, and Sprint | T-Mobile — are building out 5G to their customers. Each carrier has their own plan for rolling out their 5G network, allowing for their current infrastructure and capital improvement plans to install fiber-optic cable in rights-of-way. Three different versions are being built: (1) mmWave high-band 5G; (2) Mid-band 5G; and (3) Low-band 5G.

Millimeter wave (AT&T, T-Mobile and Verizon) is optimal when fast connectivity speed is taken into consideration. However, users have to be located within a relatively short distance (800 feet) from a transmission tower to take advantage of those speeds. The majority of carriers are offering this service in a few hand-picked areas, most typically in the downtown or other high-density areas.

Mid-band 5G (Sprint) and low-band 5G (AT&T, T-Mobile) is available in the market for the majority of consumers. In the near-term, there won’t be much of a change from 4G connectivity, but 5G is poised to become a game-changer.

Interactive Ookla 5G Map

Last year, Ookla launched an interactive map showing all the 5G networks in the world. The map is updated weekly from verified public sources and Ookla data, allowing interested parties to follow carriers’ newest 5G networks online. Currently, there have been 7,775 deployments by 122 carriers around the globe. This provides economic development practitioners and their strategic partners with in-depth insights from a competitive positioning standpoint. The information can serve as a kickstarter for a constructive dialogue with local carriers.

National Strategy to Secure 5G

The Trump Administration released the National Strategy to Secure 5G in March 2020. This 6-page document focuses on four lines of effort that explain the Administration’s vision for managing 5G infrastructure in the future. Included is guidance on how to facilitate domestic 5G rollout, cybersecurity, risk-management, and the promotion of responsible global development and 5G deployment.

U.S.-China 5G Competition

The U.S. and China are engaged in a battle for 5G leadership. U.S. officials are concerned about China’s Huawei and ZTE, two suppliers of networking equipment that seek to dominate the 5G market. Their concerns extend to national security and unfair trade practices — Chinese government espionage, illegal behavior, and heavy state subsidies are well-documented. Complicating matters is the competitive landscape, with European-based Ericsson and Nokia being the only other global firms capable of confronting the Chinese threat. Exasperating the situation is the scarcity of U.S. competitors who make the same networking equipment. Meanwhile, national policymakers are wrestling with how to implement the nation’s 5G network, industry standard-setting and patents, and the global supply chain (Lee, 2020).

Local 5G Strategies

Major U.S. cities were selected for the nation’s earliest 5G deployments. The introduction of 5G promises to radically change how people access the Internet. It will also have a transformative impact on key industries — agriculture (crop monitoring, water management), transportation (autonomous vehicles), financial services (remote transactions), manufacturing (smart factories), healthcare (telemedicine), energy (oil, gas, electricity), media and entertainment (augmented reality), retail (mobile shopping) — and smart cities.

Indiana 5G Zone

The Indiana 5G Zone is a well-recognized best practice that will provide a high return on investment for economic development. This space is co-located in the Downtown Indianapolis Eleven Fifty Academy, an education non-profit organization that helps professionals upskill and launch careers in technology. The zone’s mission is serve as a catalyst for accelerating 5G-related technologies throughout the state and support the technology’s deployment in industry and academia — enhancing Indiana’s competitive position in the process.

This collaborative effort was spearheaded by the Indiana 5G Forum. Its members include AT&T, Verizon, Purdue University, Eleven Fifty Academy, Indiana IoT Lab, Indiana University, and the University of Notre Dame. The initiative is sponsored as part of a strategic partnership with the Indiana Economic Development Corporation.

Is your community prepared for the coming 5G age?

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