Local Economic Transformation, Part 3
Practical Steps to Change your Community
If you missed it, my last two blog posts were part of a 3-part series, exploring a framework I developed for Servant Partners, exploring what local economic transformation can look like as we rebuild out of COVID. I would encourage you to read part 1 and part 2 before you read this one.
There is a Five-Part Process I laid out to attempting local economic transformation:
Step 1 = Understand the Economy’s Big Picture
Step 2 = Listen to Community Needs
Step 3 = Identify Community Assets
Step 4 = Identify a Strategy to Prototype
Step 5 = Build a “container” that can sustain the work over a longer time frame.
We will start today with Step 3:
Step 3: Identifying Community Assets
Once you have a good idea of what the needs are in your neighborhood, you can start the process of mapping assets to identify existing assets in the community that you can match to needs. What is a community “asset?” An asset can broadly be anything in a society that can play a role in solving problems:
A local community member with skills and abilities
Local business, institution, or community group
Relationship networks
Physical assets (a local park or gathering space)
Anything that can play a role in relieving pain, creating gains, and facilitating community jobs that need to be done.
As we do this work, it is vital to consider the principle of subsidiarity from Catholic Social Teaching. Subsidiarity states that “matters ought to be handled by the smallest, lowest, or least centralized competent authority.” The idea here cuts two ways: one, there often is a significant benefit to decentralized problem-solving. Tailoring responses and solutions to the individual community are not only empowering; it also often leads to more creative approaches! On the flip side, though, it is essential to remember that not the local community cannot competently solve every problem. In those cases, it is necessary and appropriate to look to larger institutions with more capacity, like government agencies. Of course, even among people who believe in subsidiarity, which level of government has adequate competency is not always clear. We should expect this question to create a healthy, good-faith debate between those on the right, who (in general) favor local solutions and those on the left, who (in general) favor more national solutions.
In our context, I believe this means that we should always look to find assets as close to the community as we can. In practice, this looks like this:
First, ask if the community members we are working with have the personal assets to solve the problem.
If not, look to the broader community (however we think that is best defined) to see if there are community assets we could draw on.
If the community does not have the needed asset, look to yourself and your network of contacts.
If you or your network don’t have it, look to external sources, including government programs and large non-profits and foundations.
At New Life Church in Lincoln Heights, we tried to put this principle into action in response to needs created by COVID:
We started by asking the church what they could contribute (time, talent, or treasure).
We looked to other nonprofits in our neighborhood for needs beyond our competency and capacity (i.e., legal counsel for renters).
When these were exhausted, we looked to churches in our network located outside of our neighborhood.
For long-term financial assistance, we were able to refer people to government benefit programs, local, state, and federal.
But to have an approach that relies on subsidiarity requires a community to have tools that can help brainstorm and know the assets you have in your midst. This document is not meant to present an exhaustive list, but rather, provide a couple of examples you can utilize:
Individual Assets Inventory
For individuals and teams, it is often helpful to take a simple “Individual inventory” of strengths and assets. For instance, you could brainstorm the individual assets of a leader by thinking through three main areas:
Knowledge: What are areas I know a significant amount about that most other people do not?
Passion: What are areas I am passionate about that most other people are not?
Skills: what are the areas where I have practical skills that most other people do not?
Community Assets Mapping
On the community level, it can be helpful to do an “asset mapping” exercise, where you explore your community and take notes on what economic assets exist in your community. You can do this on foot, walking around, through online research, or in a room brainstorming with community members.
To give your community asset map structure, you can map with the four economic lenses in mind:
Workforce Assets
Business Assets
Financial Assets
Infrastructure Assets
Systems Mapping
Lastly, when considering how high-level systemic forces in your city impact your community, it can be beneficial to walk through a “systems map.” A systems map asks you to explore how different institutions, forces, and trends impact the economic ecosystem in your neighborhood. You might start by looking specifically at the systemic forces working-class individuals in your community face and look at their positive and negative impacts. The same system often will be both creating positive and negative impacts at the same time! You might examine things like:
Housing Costs
Industry clusters (or lack thereof) in the metro area
Geographic proximity to Jobs
Mobility: how can they access work, and how much time does it take?
Opportunities for Job training and skill development
Higher Education System
Once you have visually represented these forces, you want to look for leverage points: Where could change in the system potentially be 1) achievable and 2) impactful relative to the effort required to change it? Once you have identified leverage points, you can focus on these points in your design of solutions in the future.
Identifying Fit
Once you have identified assets on different levels, you can start to visualize how best you can match your assets to your needs:
The key is looking for the most precise “fit” between the community's needs and economic assets. Ideally, you want to start your transformation process by looking for ways to combine individual assets, community assets, and system-wide points of leverage to help address some of the most common felt needs in the community. You can do this by synthesizing your findings on a single chart:
Again: you may not utilize your most powerful asset or address the most prominent problem in the community right away. That is ok! Your goal is to find an area where you can see incremental progress and start creating a positive feedback loop that inspires hope in the community to keep going. And the best way to do that is to start where there is alignment between assets and problems.
Part 4: Identify a Strategy to Prototype
Once you have identified where there might be alignment between assets and problems, you can feel more confident moving into some more concrete solutions. It is important to note that your team’s capacity will determine the scale where you can work. There are three levels of scale where economic transformation can work:
helping individuals
empowering communities
changing systems:
Different initiatives are a better “fit” for each level of scale. As the scale increases, you need to ensure your team’s capacity is large enough to make meaningful changes on the issue. For example, the odds of one church mobilizing to change federal policy are slim. However, a single church can create a program that can sustainably help a significant number of community members over the long haul. You may not have all of the relevant assets to get started, but other residents or organizations may have assets in the community that you can utilize in partnership.
For each of the four main parts of the economy (workforce, business, finance, infrastructure), I have laid out some strategies that a team should consider for each level of scale. By no means are these strategies comprehensive, but they have established strengths and weaknesses in a local context.
Workforce Initiatives
Helping Individuals: Work Placement Programs
This program focuses on taking those out of work and coaching them to find a job through various “soft skills” training (help build a resume, interviewing, etc.) combined with relationships with employers looking to hire individuals to work. Work placement generally works well in one-on-one pastoral relationships and does not require a lot of in-depth technical knowledge. In some cases, you should integrate mental health or spiritual training to work with high-need populations.
Key Assets: It helps if you have solid pastoral skills and like working one-on-one with clients. This strategy works best when you build enough relationships with employers to refer folks into jobs quickly and easily. Job-seekers want jobs, so it's essential to ensure you get people into employment as soon as possible (otherwise, you are wasting their time).
Empower Communities: Job Training/Vocational Program
Vocational training focuses on helping unemployed, or underemployed workers learn new skills, often “technical skills” that can be quickly learned and used to access well-paying jobs. For instance, many new IT jobs have been created during COVID as companies have had to set up more remote IT systems, and a vocational training program could train folks to meet this need.
Sometimes these programs are more academic (like those you would find at community colleges), and sometimes, they are more hands-on, like apprenticeships at existing companies. However, a more recent trend has been for programs to facilitate on-the-job training by functioning as a social enterprise that has the trainees hone their skills working on projects that can create value for consumers (and help fund the program).
Key Assets: This works best when you have some experience in the specific domain you are teaching OR partner with someone who does. For instance, to help people get IT jobs, you need to teach IT skills! Regardless of your skillset, make sure you have data from the local economy on what job skills are in demand. Workers want jobs, so they want to learn skills that will lead to employment, which means that if you do not work with local businesses or economic data, you will probably fail in being effective.
Change Systems: Remove Barriers to Employment
This strategy looks at a policy level and asks what practical barriers do people in our community face in accessing jobs? There are many potential reasons for this, but one significant obstacle in the United States is “occupational licensing.” Occupational licensing puts barriers on employment, often the name of consumer protection, that consequently exclude marginalized people from working in various fields. Burdensome licensing often happens on a state and local level, where government policy often gets less attention. Local government regulations create the opportunity for existing interest groups (like trade groups) to “capture” policymakers and use licensing to protect their interests rather than the public interest of including marginalized workers. There is also little evidence that they help consumers in the majority of cases.
Licensing occurs throughout the income spectrum:
The US has tremendous restrictions on nurse practitioners' work without doctor supervision, even though both common sense and empirical studies show that nurse practitioners can function perfectly safely without doctors.
Middle-skill trades like specialized construction or firefighting often have barriers to licensing, including thousands of hours of training or barring those with a felony conviction from getting into the career, even if they have otherwise successfully re-entered society.
Entry-level jobs tend to have less licensing, but some, like eyebrow threading, can still require hundreds of hours of training.
Key Assets: To talk about this issue, you need to be able to understand the labor market dynamics in your community, both through conversations with your neighbors and synthesizing that with the high-level data and studies of labor policy to look for potentially burdensome requirements. But what is even more crucial is having an extensive network to organize, especially since the supporters of onerous laws tend to be well-resourced.
Business Initiatives
Helping Individuals: Starting a Business
One option for rebuilding is to start a business or social enterprise (a business within a non-profit structure) within your community. Starting a company makes the most sense when there is a well-defined consumer need in your community and potential employees with skills that can meet the demand. Don’t limit yourself to needs you see within the community: often, the wealth-building businesses in low-income are based on trading with wealthier neighborhoods. By accessing another market, you have the potential to create jobs in the community and see that income reinvested in the local community.
Key Assets: Again, to work, you must build a business in response to a concrete need you see. Take the time to verify that people are willing to pay for what you will produce. If you don’t do this, you will not have a business idea that will succeed. The business is also more likely to succeed if your team has the skills to solve that problem/need (potentially in partnership with others in the community). You also need to make sure that you have the capital and capacity to run the business as it scales up.
Empower Communities: Incubating a Cohort of Business
As you shift focus from individuals to communities, one of the best strategies is to incubate a cohort of entrepreneurs or small businesses and use coaching and consulting to help them start or re-tool to find new markets and opportunities. Generally, these programs work well because even if not every entrepreneur succeeds, casting a wide net ensures that you will have a broader community-level impact.
Key Assets: This strategy makes the most sense when you have a large enough network in the community to know entrepreneurs or have other organizations that can refer entrepreneurs to your program. Business incubation is probably a better option for teams with a generalist skillset in business administration or coaching but without a specialized skill set that lends itself to starting a particular business. It also helps to have relationships with funding organizations (banks, microfinance, individual investors, etc.) since that is a huge help and draw for entrepreneurs.
Change Systems: “Right to Start” + Prevent anti-competitive behavior.
When you start to move from the community level to the systemic level, you should focus on the “root causes” that make it hard for small businesses and entrepreneurs in your community to succeed. Two common issues are:
1) Overly bureaucratic process: many cities have multiple bureaucracies that you have to go to to get permits and licenses to start a business. The complexity and chance you run into unhelpful bureaucrats make it exceedingly difficult for an average person to start a business. However, cities increasingly recognize that this is unnecessary and create one-stop-shops to help entrepreneurs legally begin their businesses.
2) Anticompetitive behavior: Existing businesses will often use laws in bad faith to prevent entrepreneurs from getting started. For instance, non-compete contracts and other measures preventing former employees from starting their own business have increased recently. As a result, they are increasingly under scrutiny from economic policy analysts.
These policy areas are regulated on a city or state level, making it easier for local networks to achieve change by incremental organizing.
Key Assets: You want to combine an understanding of the experiences of your neighbors who are trying to do business with a sense of broader economic policy and data. It is even more crucial to have a wide network to organize, especially since the supporters of burdensome laws tend to be well-resourced.
Finance Initiatives
Helping Individuals: Savings Groups and Financial Training
Savings groups and financial training workshops focus on helping individuals build up their savings and their ability to manage their finances. In addition, financial training increases community wealth in the long run by training residents in strategies to allocate their money to the places it is most needed (and with the most long-term benefit). These habits are beneficial to the individual and have a generational impact as you help families build wealth and sound financial practices over the years.
Key Assets: Given how difficult it is to discuss money, social trust and pastoral skill are critical. Without these, this approach will never work to its full potential. Of course, it also helps to have solid general knowledge of money and finances, but trust goes a lot farther than knowledge.
Empowering Communities: Impact Investing and Microfinance
One option is creating a fund that can finance loans (microfinance) or invested as equity (impact investing) in local entrepreneurs, students, and other people living in the community who lack access to capital. The goal is to use that capital to create a positive economic return AND a positive social return by increasing the economic opportunities in the community.
Key Assets: This works best when you have a sizable amount of startup capital since there is a lot of risk in investing in entrepreneurs. Having a more extensive capital base allows for more distributed risk as you can invest in a portfolio of opportunities, not just. It also helps to have access to a broader network of entrepreneurs.
Successful investing also requires understanding in determining what business ideas have traction and which are likely to fail. You also have to have the ability to say “no” often and a willingness to be proactive in collecting payments.
Change Systems: Strengthen Safety-Net
Many of our communities and neighbors do not have savings, familial wealth, or access to credit in times of emergency. Access to social safety net programs helps individuals avoid “poverty traps,” where they expend so much mental energy in survival mode that long-term planning gets crowded out. Social safety nets also allow people to take productive economic risks without fear of economic immiseration if they fail. Workers and students rely on government funding for college access. Many entrepreneurs rely on social safety net programs (like food stamps) in the early stages of their business before they can realistically be expected to turn a profit.
There is a balance in designing the incentives of a social safety net program: you want to create safeguards to ensure you are not creating unintended consequences, especially ones that will discourage socially beneficial behavior like work or marriage. But cross-country research shows that, when well-designed, socially welfare programs need not exist in opposition to these behaviors.
Key Assets: To do this well, you need to blend an understanding of your neighbors’ experience using the safety net in your community and a sense of economics, law, and policy. It is also essential to have a wide range of relationships with organizing networks and advocacy groups.
Infrastructure Initiatives (See Case Studies)
Help Individuals: Subsidize Access
Infrastructure, by its nature, is almost essential to access to work. People need transportation, internet access, electricity, housing, and workspace to start and thrive as a worker or entrepreneur. Sometimes the best way to help an individual to access economic opportunity is to look for concrete ways that you can connect them to these forms of infrastructure: give them space to work, help them pay for internet access, electricity, help them find reliable transit, etc. Long-term, the hope would be that they could cover these costs themselves, but in the short run, having access to work is vital to gain a foothold in the economy.
Key Assets: You must have pastoral relationships with the people and the ability to discern how to help them access the most critical infrastructure for their situation. It is also essential to have funds to help folks or assets that they need (like office space or internet access).
Empower Community: Create a Marketplace or Community Center
Community centers are designed to allow community members to gather to work, learn new skills, and pursue community betterment. They play a key role in communities where access to the internet, workspace, and education are limited. In many communities, public libraries serve effectively as community centers. Alternatively, creating a marketplace or incubator space is a way to facilitate commerce in your community, which can look like:
Creating a physical marketplace, like allowing street vendors to set up in a church parking lot.
Opening up Office space, like a co-working space for entrepreneurs and independent workers.
Opening a commercial kitchen to allow food vendors and caterers to do their prep work legally and accessibly.
Building a digital marketplace to attract customers to check out products sold by local artisans.
Key Assets: The key is raising the financial capital to buy a property (if you do not already own one) since this is generally the most challenging part of starting a center. You also want to make sure your space and programming are designed specifically for the needs of entrepreneurs: either helping them find customers more easily or helping them conduct their operations more efficiently. If you are not responsive to their needs, you won’t help the entrepreneurs or their customers, and you won’t help the economic ecosystem overall.
Change Systems: Change Land Use near Jobs and Transit
As discussed previously, many cities have seen their land use regulations get overly captured by a narrow set of economic interests. Thus it has become challenging to ensure that land use policy aligns with broader economic goals, like mobility and affordability.
From a policy perspective, one easy fix is to change regulations (including zoning, FAR, and parking minimums) to make it easier to build dense housing near transit (subway, light-rail, stops, and job centers. While this alone will not stop all mobility and affordability concerns, it is some low-hanging fruit that will significantly increase opportunity for residents. In addition, if funding is available, offering subsidies to low-income families to live in these units can be an excellent way to ensure that all people are benefiting from the opportunity.
Key Assets: You need to combine an understanding of neighborhood needs with a broader understanding of economics, urban planning, and thinking through how policy can “scale” while still creating the desired outcomes. You also need a significant number of relationships with organizing networks and advocacy groups.
Part 5: Build a “Container” or Prototype
Once you have identified a strategy, you should build some “container” or “prototype” to test how well that strategy works in your context. Then, again, we can draw on the methodology that comes out of the startup world to try to build a plan and quickly and be flexible in response to needs on the ground:
Identify: What are the core assumptions that your strategy rests on? What hypothesis would doom your strategy to failure if it were not true? For example: Let’s imagine you are starting a restaurant site as a means of creating jobs. A restaurant’s riskiest assumptions are generally:
Location: Is the rent too expensive? Is there too little foot traffic?
Menu: what cooking can I consistently execute? Do I cook foods that people will pay to eat?
Test: Create a prototype that can test those assumptions. Generally, you want to develop something quickly and cheaply that will not harm trust if it doesn’t work. For example, an aspiring restauranteur can cater parties to test menu items or create a food truck to try different locations.
Measure: how did the test work out? If you had to make the dish 100 times, how many times were you successful? What feedback did you get from your customers? What response did you get in different locations with your food truck?
Learn: what worked/didn’t work from your test, and what conclusions should you draw from that lesson? Generally, there are two outcomes from prototyping:
Persevere: Your catering experiment went well! You got some valuable feedback that was mostly positive and some insights on making things better next time.
Pivot: Your food truck location flopped, even after several attempts. You realize that catering tacos in East Los Angeles is a pretty competitive market, and your tacos are just OK when cooking for 100 people! But you also discovered that people seemed to enjoy your attempts to make healthy food (just not tacos)! Now it is time to take a step back and consider what alternatives you could consider based on the feedback you have gotten from your experience.
Conclusion
Rebuilding after a devastating pandemic like COVID will be a long, challenging endeavor for many communities. You should not be discouraged if you are overwhelmed or if early attempts do not work out. But hopefully, by going through this 5-step process, you can better understand your community and start taking small steps towards rebuilding.
