Learning Lab: Creating Wealth in Regional Economies

Sponsored by the National Association of Development Organizations

Presented by:Melissa Levy

Introductions

• Name• Where you’re from• Your favorite thing to

do in the fall

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Objectives

• Introduce wealth creation principles.

• Learn about the WealthWorks approach.

• Understand how WealthWorks can be used in your economic development work.

• Think about equity in your work.

Introducing…WealthWorks…

is an approach to economic development that connects a region’s assets to market demand in ways that build rooted wealth for local people, places and firms.

brings together a range of public, private and non-profit sector partners who have self-interest in the outcomes and an openness to discovering shared or common interests.

focuses on building a sector rather than individual and unrelated businesses.

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Overview of WealthWorksGoal: Advance a region’s prosperity by building

wealth that sticks

WealthWorks is a bridge between community development (voice, empowerment, organizing) and

economic development (attraction, retention, entrepreneurship).

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Principles or Design Elements1. Focus on creating wealth, broadly defined, and

aspire to do no harm.2. Build lasting livelihoods by intentionally including

economically-marginalized residents.3. Root wealth in local people, places and firms

through local ownership and influence.4. Use a systems approach – WealthWorks Value

Chains – to build value in existing and emerging sectors. Demand-Driven

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#1: Investing in and Building 8 Capitals

Wealth is not just money.

Wealth is the reservoir of all assets that can

contribute to the well-being of people, places

or economies.Every place has wealth.

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Defining Wealth BroadlyThe Capital The DefinitionIndividual Skills, education, physical health, and mental wellness

Intellectual Knowledge, resourcefulness, creativity, and innovation

Social Trust, relationships, and networks

Cultural Traditions, customs, and ways of doing

Natural Natural resources

Built Infrastructure – for example, buildings, sewer systems, broadband, roads

Political Influence on decision makers and shakers

Financial Savings and investment

All are required to grow and sustain a healthy economy over the long-term!

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#2: Build Lasting Livelihoods

“Lasting livelihoods” means…- Low-income residents are doing better today, with

improved skills to qualify for higher-paying jobs.- They are earning more and building careers. - They are putting something aside for the future, e.g.,

building assets, so they are more resilient.- They have better future prospects so they can give back

their time, talent, and even treasure to the community.

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Recognize Your Assets, Including Those on the Margins

• Many places harbor underutilized assets ̶ people’s know-how and energy, natural resources, buildings, influence, connections… – that are not contributing to the broader economy.

• Underutilized assets can be connected, developed, and linked to markets in ways that create wealth.

• Economically-marginalized people and places are resources – and they (and everyone) will do better if they are connected to larger economies.

• Need to include all, but too often economically-marginal are excluded

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Many Roles for Low-income People and Firms

• As explorers helping to identify opportunity and demand

• As producers/entrepreneurs adding value to a good or service connected to market demand, and increasing skill and ability in the process

• As employees of businesses producing goods or services, or of organizations supporting WealthWorks value chains

• As consumers of higher quality/lower cost goods or services produced by or leveraged by WealthWorks value chains

• As investors, owners, or co-owners, gaining, retaining and building wealth that sticks

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#3: Wealth without Ownership isn’t Rooted

Capitals that are “owned” locally build wealth.

• Ownership means you capture and control the flow of benefits from the capitals over time. It creates enduring, stable benefits.

• Benefits – e.g., income, know-how, better technology – flowing from local ownership of capitals can be re-invested and re-circulated locally, enriching many.

• Preserving local ownership or control over your capitals can increase the chances of preserving local jobs.

• Local ownership is an anchor that helps wealth stick.

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#4: Tie wealth to place and connect regionally

WealthWorks Value Chains connect local assets and production to regional demand to bring fresh money into

rural communities, defined as:

A network of people, businesses, institutions, and non-profits

who collaborate to meet market demand for specific products or services –

each advancing individual self-interest while together creating greater local wealth.

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Relationships…Relationships…Relationships

• Build relationships with other community partners to focus on a sector

• Build relationships with demand• Build relationships with other producers, suppliers, etc. • Build relationships with support partners (e.g., educational

institutions, financial institutions, Cooperative Extension)• And many, many others!

Coordination role is central and critical!

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What Makes a Community Great?What are the positive assets in your community? What would land your community on a “Top 10

Places to Live” list?These are the assets you have to build upon.

• Take a few minutes to ponder this.• Write your two strongest ideas on post its – one per

post it.

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Remember Our Goal – Rooted WealthThe Capital The DefinitionIndividual Skills, education, physical health, and mental wellness

Intellectual Knowledge, resourcefulness, creativity, and innovation

Social Trust, relationships, and networks

Cultural Traditions, customs, and ways of doing

Natural Natural resources

Built Infrastructure – for example, buildings, sewer systems, broadband, roads

Political Influence on decision makers and shakers

Financial Savings and investment

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Exploring Value Chains

WealthWorks Value Chains connect local production to regional demand to bring fresh money into rural communities:A network of people, businesses, institutions, and non-profits who

collaborate to meet market demand for specific products or services - each advancing individual self-interest while together creating greater local wealth.

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Connecting a Value Chain• Demand: Buying side of the market – Intermediate

buyers/Final consumers… you will need to talk to them to find out what they need!

• Functions: Those things that have to happen to deliver the product or service

• Transactional partners: Those people, businesses, or organizations that play a direct role in sourcing, aggregating, distributing, processing, purchasing the product, etc.

• Support: Those people, businesses, or organizations that provide the infrastructure that helps the transactional partners to produce

We are really talking about a Value Chain System!

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Exercise: Potato Chip Value Chain

• You’ll each receive a role in the chain.

• Figure out where you fit in the chain.

• Who do you connect with?

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Disadvantaged Farmers grow seed

Restaurants generate used oil

Waste Vegetable

Oil Collection Biz

Researchers test seed

Seed collection, storage, cleaning Micro-

Refinery

Two-Year College Training Program

Meal Collection / Processing

Glycerin Collection /

Refining

MidSouth ASTM Testing

Fuel Aggregator

Non-Commercial Use

FedEx

Biodiesel Stations

Farmers On /Off Road

Livestock Farmers

Cosmetic Mfgs

Green Financing Network

Bioenergy Value Chain

Manufacturer of Micro-

Refinery

Value Propositions

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• Understand what the other player wants and needs

• Understand what you want and need

• Find the connecting values

Value PropositionsCommon interest

Self interest

CEDS and Wealth

• How can the 8 forms of wealth be part of your comprehensive planning process?

• How do typical sections of a comprehensive plan align with the 8 forms of wealth? What other sections might be needed to address the various forms of wealth?

Precursor to the SWOT

• Analysis of the eight capitals in your region. • Where are you strong? • Where are you weak? • What do you use? • What is underutilized, and could be brought

into productive use with appropriate and creative investment?

Underutilized Resources

Evaluating Your Community

Evaluating Your Community• What are your strengths as a

community?• What are your weaknesses?

Assessing Your Existing Infrastructure

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• Individual • Natural

• Social• Built

People’s know-how

Natural Resources

ConnectionsBuildings

Assessing Your Infrastructure

• What have you got? – Natural– Built– Financial– Social– Political– Individual– Intellectual– Cultural

Sections of a CEDS

1. Summary Background of economic conditions in the region;

2. SWOT Analysis to identify regional Strengths, Weaknesses, Opportunities, and Threats;

3. Action Plan incorporating tactics identified through planning process, other plans, and stakeholder feedback to develop the priority strategies for the region; and

4. Evaluation Framework to identify and monitor performance measures associated with the plan.

Background of Economic Conditions

Conditions Capitals

Financial

Natural

Cultural

Individual

Economy

Environment

Culture

Workforce

SWOT

Strengths

Weaknesses

Opportunities

Threats

SWO

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SWOT TemplateStrengths

Weaknesses

Opportunities

Threats

Strengths

• Capitals we have, use & could use more• Energy and enthusiasm • Partnerships between business, government,

and organizations

Weaknesses

• Capitals we are missing, or are weak• People, firms and organizations on the

economic margins• Lack of partnerships between business,

government, and organizations

Opportunities

• Underutilized capitals we can invest in• Upward mobility for all• Emerging Markets/Demand• Gaps in activities needed to meet demand for products

and/or services in specific emerging markets where investment will have the greatest impact (leverage)

• Repurposed by-products or residuals• Local, broad ownership• Potential to go to scale

Threats

• Policy Barriers• Ownership by those outside of the region• Negative opinion shapers and parties unwilling

to collaborate

Action Plan

• What are your actions over the next 5-10 years?

• Are there actions that can be taken to create impact on the eight forms of wealth?

Evaluation FrameworkAction Indicator

(what needs to change)

Measure Methodology Baseline

Natural

Built

Financial

Social

Individual

Intellectual

Political

Cultural

Equity

• What underserved or vulnerable populations do you have in your region?

• How would you connect with them to better understand their needs and how you might include them in the value chain?

Assessing and Planning Your Work

The forms of wealth offer a framework for assessing your work and planning for greater impact.

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Example: A Tool for Land Trusts: 3 Ways to Use

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Assess your work

Plan to amplify your impact

Evaluate your work

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Assessing Your Impact Importance Ratings Impact Ratings

Next Steps

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What are some logical next steps to move from discussion to action in your organization?

• Who else has a self-interest or a shared interest in being engaged further?• What else do you need to know before you can move forward,

i.e., research needs?• Are there gaps or barriers identified today that could be

addressed next?• What are concrete next steps you might take coming out of

this workshop?

For More Information

Melissa Levy802-318-1720Melissa@community-roots.comwww.community-roots.com

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