Revised version for USDA-RD grant

The Practice of Community DevelopmentWebinar SeriesSmall Town Strategies for Regional Work

Bo BeaulieuSouthern Rural Development Center Mississippi State University

1Webinar Overview Defining what we mean by regionTypes of regionsWhy a regional approachFeatures of successful regionsComponents of the SET (Stronger Economies Together) ProgramExamples of SET regional effortsSET metricsWhats ahead with SET: Phase IVQ & A

2DEFINING A REGION:

Different Approaches

3What is a Region?Geographical area of similar characteristics:Similar withinDifferent from other places

Place with a unique identity and meaning

What does region mean? A region is simply a geographic area that is similar on some dimension, such as physical geography, ecology, economic characteristics, social characteristics, etc. A set of regions constitute areas that are similar within but different from other geographic areas. For example, one region could be dominated by agriculture while another region could reflect a strong concentration of health-related firms. While each region has a certain amount of commonality internally, when you compare one region to the other one, they are quite different.Regions can be established to serve different purposes. They provide:

Units of analysis for tracking trends (For example, we can track regions that share a common population feature, such as high concentrations of retirees.)

Areas that help capture various kinds of economies of scale (such as an automobile industry cluster)

Units relevant for planning or policy application (such as a water management district or regional planning districts)4Types of RegionsFunctionalEconomicPoliticalAdministrativeDataIssueEach of these regions is valid. Which one you use simply depends on what you are attempting to do.

You can find a variety of regional types locally. Several of these are listed in this slide. Can you identify some examples of these types of regions in this area? All of these are valid regions, yet each functions quite differently. Thus, deciding on the type of region you want as the focus is very important in determining what your intended goals as a regional team are likely to be.Regions can be defined in many different ways as described below. Regional team members may have to modify the way they define their region depending on the specific goals they seek to achieve. Here are different ways in which regions can be determined and some examples associated with these types.

Functional Region example: watersheds

Economic Region example: labor markets

Political Region example: congressional and legislative districts

Administrative Region example: school districts, water management districts, county boundaries

Data Region example: metropolitan areas, commuting patterns, retirees, Latino/Hispanic population, shopping areas, census tracts

Issue Region example: persistent poverty areas, high crime areas5Why a Regional Approach?

6Secretary of Agriculture, Tom VilsackI have reached the conclusion that we must overhaul our approach to economic development in rural America. The framework of the new effort recognizes that the rural economy of tomorrow will be a regional economy. No one community will prosper in isolation.

Many of you can probably identify with the fact that some rural communities are facing tough times in keeping their economies strong. Generating jobs that provide workers with good wages is difficult to do, especially when you have to compete with so many other communities for the few firms that are thinking of locating to less populated areas. Its this economic reality that prompted Secretary Tom Vilsack, the head of the U.S. Department of Agriculture, to share his thoughts about the economic future of rural America. Here is what he stated [See the quote from Secretary Vilscack].

7Do you agree with Secretary Vilsack? Why or why not?

8Why a Regional Approach?Promotes the Three Cs:

Conversation

Connection

CapacitySource: Council on Competitiveness (2010)

9A simple and straightforward way to demonstrate the value of a regional approach is to highlight what the Council of Competitiveness noted it is 2010 document, Collaborate: Leading Regional Innovation Clusters. The report says regionalism helps promote the three Cs: Conversation, Connection and Capacity.Conversation: Helps promote discussions among public and private sector leaders and local residents, builds regional awareness, and focuses on consensus-building with an eye toward the future. One of the major challenges of regional economic development is coordinating local jurisdictions that have little history of working together. A key benefit of regional development is that it requires local governments, local economic development organizations, business leaders, education leaders, residents, and others to talk to have a conversation that focuses on the future of the region. The intent is to build awareness of the possibilities that exist when a region works together.Connection: Regionalism is often described as a contact sport that requires personal interactions at every stage of the game. When businesses consider coming to a region, they may want to look for a well-trained workforce, innovative job training centers, quality health care, decent schools, good infrastructure (such as broadband), adequate financial services, and more. A smaller community or county (parish) would be hard pressed to have the full slate of resources these businesses need unless they can creatively weave the different people, groups, resources, and services together at the regional level. Pursuing personal connections to assemble the needed expertise and resources is critical. In fact, SET helps groups build these types of connections as a regional team.Capacity: Helps leverage key assets; it weaves the system of support needed to create and attract businesses. Pursuing a regional approach helps develop a mindset a culture in which your team begins to think like a region. You work to leverage the unique assets of different communities their businesses, institutions, labor force, facilities, and services in ways that bring new economic opportunities and benefits to the entire region.

Additional Comments:

The discussion of the three Cs is drawn from the 2010 report by the Council on Competitiveness titled, Collaborate: Leading Regional Innovation Clusters. It is available online at:

http://www.compete.org/images/uploads/File/PDF%20Files/Final_Collaborate.pdf

See also: Cheryl A. Burkhart-Kriesel (2002) and Sara Lawrence (2001). The full references for these two documents can be found at the end of this module.

KEY FEATURES OF SUCCESSFULREGIONS

10

Features of Successful RegionsLeaders that recognize new realities of economic developmentCommitment to collaborationGlobal view Understanding of current strengths and weaknessesFlexibility and adaptability11On this slide and the next one, we have listed some of the key features of successful regions. As you think about these, consider where this region stands and where the opportunities are for growth.Leaders that recognize the new realities of economic development those that understand that economic development strategies of the past are not likely to be successful in the future

Collaboration across the region organizations with a history of working together across geographic boundaries and jurisdictions

A global view having an understanding that the bigger picture of global trends will impact the economic development of the region

An understanding of current strengths and weaknesses having a clear, realistic understanding of both the assets and barriers the region possesses

Flexibility and adaptability a willingness to shift the course appropriately to respond to new opportunities or challenges

[Continue onto the next slide.]

Features of Successful Regions Capacity to respond; the structure to support activitiesComprehensive view of developmentMechanism for continuously searching for opportunitiesWay to document impact

12Continuing from the previous slide, successful regions also have:

The capacity to respond; a structure to support activities

A comprehensive view of development

A mechanism for continuously searching for opportunities

A way to document impact

What do you think of these characteristics? Do these make good sense? Are there characteristics that are missing from the slide? If so, what are they? Which of these do you feel are the most important characteristics of successful regions? Which of these are the least important? Why?

Bringing the conversation a little closer to home, how does this region rate on these characteristics? Which of these are already strong characteristics in the region? Which ones may need focused attention to grow?

Rating Your Region: Taking StockThese two charts reflect the key elements of successful regional development. Consider for a moment how you would rate your region on each of these elements. In a minute, I will ask you time to rate your region on each of these nine elements. If you think the region really needs a lot of work in that area, then evaluate it as such on the survey. If you think, however, that some progress has been made but there is still some room to improve, then mark the as mixed review. Finally, if you feel your region is doing a good job on this dimension, then give it a In pretty good shape rating.

Based on the ratings you have offered for each element:

What is the element(s) viewed as the greatest strength of your regions, that is, where are they in pretty good shape? What has helped lead to this success?

What areas need lots of work areas that will require the greatest amount of improvements? What have been some barriers in this area? What could help the region improve here?

What components are getting mixed reviews in your region? Why do you think that diversity exists?

Other observations?

As you seek to dig deeper into the many aspects of regional economic development work, keep these basic themes in mind as to the various ways in which your region can be strengthened.

13

An Introduction to SET14Purpose of SETHelp rural communities/counties work together as a regional team in developing and implementing an economic development blueprint that builds on the current and emerging economic strengths of their region.

When Launched? Summer 2010

Many of you are well aware that communities are facing some major challenges when it comes to creating or expanding local job opportunities, especially if these places have small populations or limited economic activities. Although these places may be working hard to attract firms, the reality is that only a small handful of firms are looking to relocate or expand to new localities. Unfortunately, communities and counties competing for such businesses are located in close proximity to one another. In these economic challenging times, does it not make more sense for these neighboring counties (parishes) or communities to work together?

SET is designed to help encourage counties (parishes) and communities to join hands and begin carving out a sound regional economic development plan, one that builds on the regions economic assets and strengths. Keep in mind that we are not urging communities and/or counties (parishes) to come together just for the sake of coming together. Rather, we want communities and counties (parishes) to collaborate for the purpose of finding the distinct comparative advantages they have as a region economic activities that can position the region to effectively compete in multi-state, national and/or international markets.15States Currently Part of SET

16SET Regions: A Bottom-Up ApproachRegions defined by applicants17Reaching Rural Places: Current SET Counties

n = 23318Counties Involved in SET: Facing Key Challenges

PercentNote: Based on the ERS 2004 County Typology Codes n = 23319What SET Provides Regional Teams Training

Data & Analysis

Technical Assistance

Peer-to-Peer Networking

20SET Core Training ModulesHere is a visual of the SET modules that serve as the core of the SET program and the four key headings under which these modules align. The first section, dealing with THE BASICS, is composed of two modules: one introduces the SET program, and the second helps the SET team understand some of the key features of their region, including some of the important population changes taking place in the region.

The second section, focusing on GEARING UP, offers guidance on some of the important attributes of a strong regional team. Even if a regional team is already in place, reviewing this module will help determine if additional people need to be added to a team, keeping in mind some of the population shifts showcased in the previous module. This section also focuses on the elements of producing an inspiring regional vision and the important elements of sound regional goals. The third phase is focused on RESOURCES AND STRATEGIES. The three modules in this section showcase the many tools and resources a team can employ as it builds and implements its regional goals and plan. These resources include important economic characteristics of the region, such as the attributes of its workforce. The regions comparative economic advantages, especially the presence of economic clusters, is examined in the first of the modules in this section. The second module in this section gives attention to economic development strategies a team can use to strengthen and add value to the cluster being addressed by the team, while the third module introduces innovative ways to uncover regional assets and possible barriers that might impact the achievement of the teams regional goals. The final section focuses on MOVING INTO ACTION. The two modules associated with this last phase of SET offer a detailed roadmap on how to get important projects off the ground and how to gather the type of information needed to ensure these regional efforts stay on track. Additional Comments: We encourage SET regional teams not to bypass any of the modules. There is a good possibility that a team will discover some useful information in each of the modules, even if a module happens to address a topic they feel they have already addressed in some other training venue.21Bringing Information to the TableCurrent county and/or community economic development plans

Demographic profile

Analysis of economic clusters

22The North Carolina Eastern Triangle

23Review the NCET DataStudy the handout

Identify information that you found most interesting

What impact might such data have on the economic development planning by a regional team?

24Clusters in Your RegionWhat is the nature of the clusters that you are most familiar with in your region (that is, the region you most closely identify with)? StarsEmergingMaturingTransitioning

What clusters do you think are most dominant in rural areas of the U.S. right now? 25Selecting Clusters: A Locally-Driven Process26Interpreting Data on ClustersMoving Up or DownChange in Percentage of Jobs in Industry over TimeA bubble may move up or down within the chart. This movement represents the change in the percentage of jobs within an industry over time. If the percentage of jobs declined, the bubble moved lower in the chart. Likewise, if the percentage rose, the bubble shifted upward on the chart. Do you see some examples of up or down movement?

27Understanding ChangesMoving Left or RightRelative Concentration of Industryin the Region Compared to the NationLeft and right movement on the bubble chart is a change in an industrys location quotient. The location quotient is often used to measure the concentration of a particular industry relative to some base location. For these reports, the base location is the continental United States.

Calculating the location quotient for a particular industry is very straightforward. You begin by determining what proportion of the regions workforce is employed in a specific industry. You then determine the percentage of the workforce employed in that same industry for your reference areas workforce (for example, your state or in the nation). Next, you calculate the ratio between your region and the reference unit (with regard to the industry you are examining). Heres an example: Lets assume you found that 25 percent of your regions workforce is employed in the manufacturing sector. You then determine the national figure of workers employed in the manufacturing industry is 18 percent. The location quotient for your region is 25 percent divided by 18 percent = 1.39.

A location quotient greater than one suggests that the region exhibits concentration in that industry. It also assumes this sector is exporting their goods and/or services to areas outside of the region. A location quotient less than one, however, implies that the area is below average in terms of its concentration in a given industry.

While a useful beginning tool, the location quotient measure does not offer any insights on what you should do, as it only shows that a specific cluster might exist in your region. Just because a location quotient is greater than one does not imply that the region should invest more in this sector. Nor should we abandon a given sector if the quotient has a value of less than one. Looking at the changes taking place in the location quotient over time is important. If it is increasing, this may be an emerging cluster. If it is decreasing, it could be an indication that the cluster is declining and that caution may need to be taken before further investments are made.

Considering the regions bubble chart, which industries have shown a rise in location quotient over time? Where has there been a decrease?

Its also possible to map the bubble charts in other ways by looking at the quality of the job measured by average earnings and job growth.

Sources:Economic Modeling Specialists, Inc. (EMSI)http://www.economicmodeling.com

Shield, M. (2003). Using employment data to better understand your local economy: Tool 3. Use location quotients to identify local strengths, opportunities, and industry clusters. University Park, PA: The Pennsylvania State University. Retrieved from http://cecd.aers.psu.edu/pubs/Tool%203.pdf

28Emerging

Growth in % Jobs over Time

Lower Concentration of Industry in RegionStars

Growth in % Jobs over Time

Higher Concentration of Industry in RegionTransitional

Decline in % of Jobs over Time

Lower Concentration of Industry in RegionMature

Decline in % of Jobs over Time

Higher Concentration of Industry in Region

Location Quotient: Measure of Concentration of IndustryPercent Change in Jobs over TimeThe terms on this slide are often used to categorize the industries by where they fall within the bubble chart.

Star clusters are those whose concentration for a given industry is larger than that in the nation and whose percentage of employment has increased over time. Star clusters are considered specialized in the region compared to the nation.

Mature clusters are those whose concentration of employment in the region is larger than that in the nation and whose percentage of employment has decreased over time. Mature clusters are specialized as compared to the nation and becoming less specialized.

Emerging clusters are those whose concentration of employment in the region is currently less than that in the nation and whose percentage of employment has increased over time. These clusters are less specialized in the region as compared to the nation. Some of the emerging clusters may become specialized clusters in the future.

Transitional clusters are those whose concentration of employment in the region is less than that in the nation and whose percentage of employment has decreased over time. These clusters are less specialized in the region. The transforming clusters are unlikely to become specialized.

Reference: Primont, D. and Domazlicky, B. (2008). Industry Cluster Analysis for the Southeast Missouri Region. Center for Economic and Business Research. Cape Girardeau, MO. http://www6.semo.edu/cebr/studies/Southeast_rpc_industry_cluster_study_1.pdf

29

30

31The Leaky Bucket

The Regional EconomyGoods or Services Purchased outside of the Region$32Plugging the LeaksOne way to plug a leak in the local economy is to connect regional demand for goods and services with the regional suppliers of those goods and services. Many things that individuals or businesses need can be found from suppliers within the region, but due perhaps to lack of adequate information or connections, those things may be purchased outside the region. By substituting demand for externally produced goods with regionally produced goods, regions can retain capital for use within the community. This is import substitution.

33

Looking at Regional ExpendituresThis table helps paint a picture of how industries within the region compare in the amount of expenditures each has annually to support its work. This gives a sense of scale to the industry discussion. The chart also shows the percentage of total expenditures that are being used to purchase goods/services within the region versus outside the region. Those expenditures outside the region are economic leakages that could point to potential strategies for strengthening the cluster within the region. Is there anything in this picture that surprises you? Why/why not?

34

Strengthening Clusters throughImport SubstitutionSeek to Identify:

Industries that support the clusterGoods and services being purchased from outside the regionCapacity for supplying these inputs regionallyResources needed to help promote the capacity of local firms to supply inputs needed by the cluster(s)35C.A.R.E for the ClusterSource: Barta, et al (2010) CARE ModelIn the newly revised C.A.R.E. model developed by a team of community development specialists, four avenues are described to help build and enhance an existing or emerging cluster. Each avenue has the potential of stopping leakages that are occurring or threatening to occur. These are:

Creation of new firms from within the regionAttraction or recruitment of firms from outside the regionRetention of existing firms that contribute to the clusterExpansion of existing firms to increase the regional capacity of the cluster

Source: Barta, S., Frye, J., Nelson, J., Paterson, S., Ralstin, S., Wittman, P., & Woods, M. (2010). C.A.R.E. Model. Southern Rural Development Center. Retrieved from http://srdc.msstate.edu/care/

36Examples of SET Regional Efforts

37Western Nevada Development District9 countiesCombination of metro and nonmetro countiesReceived $45,000 grant from the Nevada Governors Office to help pursue the SET effortSET forced leaders to think beyond the usual suspects by adding new interest groupsHelped ease the tension between urban and rural Business and Financial Services, Energy/Mining, Arts/Recreation/Entertainment, and Agriculture selected as key clusters

38Lower Rio Grande ValleyRegional Small Cities Coalition (Texas)4 counties in a highly impoverished region of TXRegional group that was only one year old or lessBrought city managers and others from smaller towns and rural areas togetherFelt they had more in common with one another than with the larger metro areasFocus is on basic regional needs such as housing, transportation, education, workforce development.

39Raton Basin Regional Economic Development DistrictBorders New Mexico and Colorado3 counties (10,137 square miles)New regional team; new connections made among membersSET was a catalyst to shift away from declining coal industry towards a focus on agriculture and tourismSET increased their grant activities (i.e., Job Accelerator Grant application)We used to be locally focused, but because of SET, we now understand how we all benefit from a regional approach40Highlighting Some of theSET Metrics

41SET is Helping to . . . Promote broad-based engagementBuild trust/social capitalProduce regional plansStrengthen working relationships with RD, Extension, EDA, and othersLeverage resources

42Expanding Engagement

Membership: Increased from 464 to 1,679 members in the 39 regions (+ 362%) 43Produce a Regional Plan. . . the most remarkable thing about the regional partnership is that a group of individuals have, out of their own initiative and drive, created a vision -- and from that vision have developed a plan that will support economic development in this region for years and generations to come. SET Regional Team Member

44GOAL of the SET Program:Develop and Implement a High Quality PlanEvidence-Based

Focused on Regional Economic Development

Aligned with Vision & GoalsBroadly Supported

Practical

TeamsRegional Plan Any regional team interested in being part of the SET effort will find value in the training and activities provided as part of this program, but the bottom line is that the SET regional group is expected to produce a regional economic development blueprint. Not just any plan, but one that can be labeled high quality. What are the critical elements of a high quality plan? This slide captures the essential elements.

Evidence-based: The plan builds on the regions economic strengths including its current and emerging economic clusters and other relevant assets.

Practical: The plan is logical and clear, has a well-developed timeline, indicates who is responsible for carrying out the various components of the plan, and indicates outcomes to be achieved over the short, medium, and long-term basis.

Broadly Supported: Having support of a wide range of people, governments, and community-based organizations is essential for the plan. Not only is it important to have a plan that is supported by economic development and local government leaders, but also one that has buy-in from people representing the regions education, health, business, faith-based, and nonprofit sectors, as well as key demographic groups.

Focused on Regional Economic Development: The central focus of the plan must be on strategies that directly or indirectly advance regional economic development. That is, the economic development blueprint must be designed to benefit the whole region rather than a single community, county or sub-area of the region.

Aligned with the Vision and Goals: The plan must be in synch with the regional teams vision statement and the specific goals they have developed.

45Strengthen Working Relationships:RD and Extension ServiceLowHigh46Leveraging ResourcesPhase I and II: $5,642,387

Phase III: $355,518

Total Amount of Funds Captured to Date: $ 5,997,905

47Whats Ahead for SET?New Regions to be Selected in2013Expand SET to about 12 new regions in 2013 Proposals are due March 1 Want more information regarding Phase IV? Go to: http://srdc.msstate.edu/set/phase4.html Build stronger ties with federal agencies that share a commitment to regional innovation EDA Partnership for Sustainable Communities

48Time for More Questions !

49Chart121.526.252.4

Sales21.5%26.2%52.4%

Sheet1SalesMetro21.5NM Micropolitan26.2NM Noncore52.44th Qtr1.2To resize chart data range, drag lower right corner of range.

Chart130.950.231.826.227

Column1

Sheet1Column1Series 2Series 3Low Education30.92.42Low Employment50.24.42Persistent Poverty31.81.83Population Loss26.22.85Mfg. Dependent27To resize chart data range, drag lower right corner of range.