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Market-Based Development to Win the War on Poverty
- 1. © RW Ventures, LLC 2015 Did We Win the War on Poverty? Fighting the Good Fight – What Still Needs to Be Done? Chicago Federal Executive Board June 16, 2015 Robert Weissbourd RW Ventures, LLC
- 2. Launching the War on Poverty “Our task is to help replace their despair with opportunity. This administration today, here and now, declares unconditional war on poverty in America.” - President Lyndon B. Johnson (January 8, 1964) 2
- 3. War on Poverty in the “Great Society” Nearly 200 pieces of legislation, many of which are still in place today: "Our aim is not only to relieve the symptoms of poverty, but to cure it and, above all, to prevent it.“ Source: LBJ Library Economic Opportunity Act of 1964 Food Stamp Act of 1964 (now SNAP) Social Security Amendments of 1965 Elementary and Secondary of 1965 Housing & Urban Development Act of 1965 3
- 4. Agenda From Poverty Alleviation to Market Based Development2 Market Based Development in The Next Economy3 The Promise of Inclusive Growth4 Implications for the Federal Government5 Winning? The Numbers1 4
- 5. Agenda From Poverty Alleviation to Market Based Development2 Market Based Development in The Next Economy3 The Promise of Inclusive Growth4 Implications for the Federal Government5 Winning? The Numbers1 5
- 6. Official Poverty Measure (OPM) Source: U.S. Census Bureau, 2014 OPM = pre-tax income against mostly food needs. 6
- 7. Official Poverty Measure (OPM) Source: U.S. Census Bureau, 2014 OPM = pre-tax income against mostly food needs. 6
- 8. Supplemental Poverty Measure (SPM) 7 SPM = income + welfare/transfer payments – taxes against basic expenditures Source: President’s Council on Economic Advisors, 2014
- 9. Supplemental Poverty Measure (SPM) 7 SPM = income + welfare/transfer payments – taxes against basic expenditures Source: President’s Council on Economic Advisors, 2014
- 10. Market Poverty Measure 8 ncome, while the height of the region shaded in black is the SPM poverty rate shown in . The difference, shaded in green, represents the percentage of the population lifted verty by the safety net and the net effect of the tax system.17 Figure 5 because of the rising inequality in earnings described above, market poverty increased past 45 years by 1.7 percentage points from 27.0 percent in 1967 to 28.7 percent in contrast, poverty rates that are measured including taxes and transfers—these taxesSource: President’s Council on Economic Advisors, 2014 Growing market poverty means wages and income are increasingly falling short
- 11. Relative Poverty 9 “In order to participate fully in the social life of a community, individuals may need a level of resources that is not too inferior to the norms of a community.” - OECD Source: CEPR, 2013
- 12. 12 Winning? By the numbers: Major progress, but serious challenges remain: – Welfare works! Programs have kept over 300 million people out of absolute poverty – Relative Poverty high & rising Welfare is necessary, but not sufficient – Compensates for market failure & exclusion: alleviates but doesn’t cure – Often creates alternative, dependency-based, programs, rather than solving for the underlying market causes We need to shift towards moving people & places back into the economic mainstream 10
- 13. Agenda From Poverty Alleviation to Market Based Development2 Market Based Development in The Next Economy3 The Promise of Inclusive Growth4 Implications for the Federal Government5 Winning? The Numbers1 11
- 14. Origins: From “Equity” to … “Equity” 12 Civil Rights Empowerment Economic Development: Assets Economic Growth: Markets
- 15. Poverty and Economic Growth 13 “… poverty has no causes. Only prosperity has causes. Analogically, heat is a result of active processes; it has causes. But cold is not the result of any processes; it is only the absence of heat. Just so, the great cold of poverty and economic stagnation is merely the absence of economic development. It can be overcome only if the relevant economic processes are in motion.” -- Jane Jacobs Photo from Shelf-Basin Interactions
- 17. Market Failure in Lower Income Communities 15 • Employment networks • Entrepreneurial opportunities • Business, real estate investment • Expanded products and services • Competitive, healthy communities • Undervalued, underutilized assets Poverty Productivity Connectedness Isolation
- 18. Elements of Market Based Development 16 Increasing Productivity • Long term economic growth occurs through enhancing productivity of individuals, businesses and institutions (including government) • Invest in technology, R & D, human capital, knowledge factors that lead to innovation
- 19. Elements of Market Based Development 16 Expanding Inclusiveness Increasing Productivity • Long term economic growth occurs through enhancing productivity of individuals, businesses and institutions (including government) • Invest in technology, R & D, human capital, knowledge factors that lead to innovation • Reincorporating wasted “market-ready” assets – such as underdeveloped land, underemployed labor or underserved markets – into the economy can increase efficiency and productivity • This growth is not just good, but good for business – no trade-off between equity and growth
- 20. Elements of Market Based Development 16 Developing Assets Expanding Inclusiveness Increasing Productivity • Long term economic growth occurs through enhancing productivity of individuals, businesses and institutions (including government) • Invest in technology, R & D, human capital, knowledge factors that lead to innovation • Reincorporating wasted “market-ready” assets – such as underdeveloped land, underemployed labor or underserved markets – into the economy can increase efficiency and productivity • This growth is not just good, but good for business – no trade-off between equity and growth • Getting assets market-ready also makes economic sense • Also necessary for strong society: healthy economy and democracy linked
- 21. Low Alignment High Alignment MARKET INTERVENTION Market solution possible if market operations and environment changed through public policy and advocacy MARKET REDEFINING Market solution possible if market operations and market environment changed through private activities MARKET REFINING Market solution possible with new information, products or networks PURE MARKET Market solution possible; market already generates ED outcomes NON-MARKET No market solution; market is not the appropriate channel Activities to Align Markets and Development 17 Market Interests ED Goals Adapted from Kahane-Weiser- Weissbourd/Ford CII
- 22. Low Alignment High Alignment MARKET INTERVENTION Market solution possible if market operations and environment changed through public policy and advocacy MARKET REDEFINING Market solution possible if market operations and market environment changed through private activities MARKET REFINING Market solution possible with new information, products or networks PURE MARKET Market solution possible; market already generates ED outcomes NON-MARKET No market solution; market is not the appropriate channel Market Interests ED Goals Adapted from Kahane-Weiser- Weissbourd/Ford CII Make Market Work (Addressing Internal Imperfections)Change Market Parameters (Using Market Mechanisms) Change Market Parameters (Using Non- market Mechanisms) Vital Work – but not market based! Market Works: Company profits while providing Development impact. Activities to Align Markets and Development 18
- 23. NEXTOLD Intervene: Low Income Housing Tax Credit 19 OBJECTIVE: Affordable housing Large-scale, publicly-owned & operated, wholly subsidized development Tax credit to enable market development of affordable units Image Sources: Art Gray (Flickr)
- 24. NEXTOLD Redefine: YearUp 20 OBJECTIVE: Human Capital Development Provider orientation. Disconnected from market demand. Outputs vs Impacts. Tailored, demand-driven training linked with direct placement opportunities and career pathways.
- 25. NEXTOLD Refine: ShoreBank 21 OBJECTIVE: Comprehensive Neighborhood Development Heavily subsidized, fragmented, one-off deals. Development activities disconnected from market. Holding company with bank, venture fund, housing developer, & non-profit – specialized knowledge and tools enabling mutually-reinforcing market based investment.
- 26. Agenda Market Based Development in The Next Economy3 The Promise of Inclusive Growth4 Implications for the Federal Government5 Winning? The Numbers1 22 From Poverty Alleviation to Market Based Development2
- 27. A Fundamental Change in the Economy 23 Source: Brookings (data from Moody’s analytics)
- 28. %Change • Human capital • Information technologies • Product innovation; flexible customization • Firm, consumer and knowledge networks • Increasing returns; divergence The Global Economy is Undergoing a Fundamental Transformation 24Source: “Greenspan Weighs Evidence and Finds a Lighter Economy,” Wall Street Journal Driven by Knowledge Assets 0% 100% 200% 300% 400% 500% 600% $s lbs GDP Growth, 1950 - 2000
- 29. 0 20 40 60 80 1920s 1990s Years Spent on the S&P Index The Economy is More Dynamic (and Global) 25Sources: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010; Brookings Institution 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 15% 20% 25% 30% 35% GRPGrowth Firm Starts and Closures (Churn) as % of All Firms Churn and GRP Growth by MSA
- 30. 0 20 40 60 80 1920s 1990s Years Spent on the S&P Index The Economy is More Dynamic (and Global) 25Sources: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010; Brookings Institution 21.4% Global GDP (2010) BIC Countries 20.2% US 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 15% 20% 25% 30% 35% GRPGrowth Firm Starts and Closures (Churn) as % of All Firms Churn and GRP Growth by MSA 25.8% Global GDP (2015) BIC Countries 18.3% US
- 31. …and Centered in Metropolitan Areas 26
- 32. Population 83.7% Employment 89.8%PersonalIncome 96.3% KnowledgeIndustries(GDP) 87% Metros Share of U.S. Total Source: Brookings Institution; Bureau of Economic Analysis, U.S. Patent and Trademark Office GrossProduct 90% Patents 95.5% …and Centered in Metropolitan Areas 26
- 33. What Makes Metropolitan Regions more Productive in the Next Economy? 27
- 34. Customize: Build on Distinctive Assets Develop Institutional Capacity and Intentionality Invest in Complementary Activities That Create Synergies 27 Metros Concentrate People and Firms to Achieve Efficiencies
- 35. Leverage Points for Sustainable and Inclusive Prosperity Enhance Regional Concentrations/ Clusters Market Levers on the Next Economy 28 Functional clustering Shift towards SMEs More deliberate, open, flexible, collaborative
- 36. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations/ Clusters Market Levers on the Next Economy 28 Functional clustering Shift towards SMEs More deliberate, open, flexible, collaborative Mobility and matching Segmented, continuous, contextual training Occupational- technology-firm pools
- 37. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations/ Clusters Develop Innovation- Enabling Infrastructure Market Levers on the Next Economy 28 Functional clustering Shift towards SMEs More deliberate, open, flexible, collaborative Cluster restructuring new entrepreneurship and SME opportunities Innovation Districts Mobility and matching Segmented, continuous, contextual training Occupational- technology-firm pools
- 38. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Create Effective Public & Civic Culture & Institutions Enhance Regional Concentrations/ Clusters Develop Innovation- Enabling Infrastructure Market Levers on the Next Economy 28 Functional clustering Shift towards SMEs More deliberate, open, flexible, collaborative Cluster restructuring new entrepreneurship and SME opportunities Innovation Districts Formal and informal economic networks Cross Sector Initiatives Transparency, openness Mobility and matching Segmented, continuous, contextual training Occupational- technology-firm pools
- 39. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Increase Spatial Efficiency Create Effective Public & Civic Culture & Institutions Enhance Regional Concentrations/ Clusters Develop Innovation- Enabling Infrastructure Market Levers on the Next Economy 28 Functional clustering Shift towards SMEs More deliberate, open, flexible, collaborative Cluster restructuring new entrepreneurship and SME opportunities Innovation Districts Formal and informal economic networks Cross Sector Initiatives Transparency, openness Move towards compact, well-connected urban form Mobility and matching Segmented, continuous, contextual training Occupational- technology-firm pools
- 40. THE NEXT ECONOMY ENTAILS A FUNDAMENTALLY DIFFERENT APPROACH TO ECONOMIC GROWTH 29
- 41. From the “Old Economy”… 30 Cities are centers of poverty and problems …
- 42. …To New Principles for the Knowledge Economy 31 Cities are the solution, ripe for investment
- 43. From the “Old Economy” 32 Chicago MSA Job Growth/Loss, 1995-2010 3,498,000 2,861,000 176,000 Costly and one-off firm attraction
- 44. From the “Old Economy” 32 Chicago MSA Job Growth/Loss, 1995-2010 Net: -697,000 811,000 5,000 Source: YourEconomy.org; CAREFUL re: interpretation due to methodological issues concerning attributions by category. 3,498,000 2,861,000 176,000 -4,195,000 Opened/(all) Closed -2,050,000 -171,000 Expanded/Contracted Moved In (time of)/Moved Out Costly and one-off firm attraction
- 45. …To New Principles for the Knowledge Economy 33 Concentration of workers with IT & design skills Highly ranked engineering school Relevant university research activity Strengthen entrepreneurial support and ecosystem Strengthen university- industry connections commercialization and firm innovation Innovation Accelerator (catalyze technology commercialization, support new & existing firm growth) Build on existing strengths and unique assets
- 46. From the “Old Economy”… 34 Competing on low cost
- 47. …To New Principles for the Knowledge Economy 35 Compete on value added
- 48. From the “Old Economy”… 36 Chasing the “Big Deal”
- 49. …To New Principles for the Knowledge Economy 37 Be strategic – understand your place and path in context Source: World Business Chicago’s Plan for Economic Growth and Jobs
- 50. From the “Old Economy”… 38 Focus on Consumption
- 51. …To New Principles for the Knowledge Economy 39 Focus on Production
- 52. From the “Old Economy”… 40 Bureaucratic, top-down, inside-out government
- 53. …To New Principles for the Knowledge Economy 41 Transparent, outside-in, networked collaboration across sectors, subjects and borders
- 54. From the “Old Economy”… 42 Transportation Housing Delivering disconnected programs
- 55. …To New Principles for the Knowledge Economy 43 Transportation Housing Act in context, with integrated solutions
- 56. From the “Old Economy”… 44 Lack of education Investment Homelessness Lack of money Unemploy- ment Crime Markets Ownership Connected Communities Addressing poverty as isolated problem
- 57. …To Embracing Next Economy Dynamics 45 Productivity Inclusiveness Asset Development “I N C L U S I V E G R O W T H” Constructive Government Economic Place Making Asset-Based Investment Economics & Markets Move people & places into the economic mainstream
- 58. New Principles for Economic Development 46
- 59. Agenda Market Based Development in The Next Economy3 The Promise of Inclusive Growth4 Implications for the Federal Government5 Winning? The Numbers1 47 From Poverty Alleviation to Market Based Development2
- 60. Why Inclusion Matters 48 Why Care Causes of Exclusion Fixes ValuesSocial Erosion Moral Imperative
- 61. Why Inclusion Matters 48 Why Care Causes of Exclusion Fixes Values Governance Social Political Erosion Corruption of Political System Moral Imperative Political Economy
- 62. Why Inclusion Matters 48 Why Care Causes of Exclusion Fixes Values Governance Prosperity Social Political Economic Erosion Corruption of Political System Returns to Capital Moral Imperative Political Economy Inclusive Economic Growth
- 63. Why Inclusion Matters 48 Why Care Causes of Exclusion Fixes Values Governance Prosperity Social Political Economic Erosion Corruption of Political System Returns to Capital Moral Imperative Political Economy Inclusive Economic Growth
- 64. The Inclusive Growth Paradox 49 Drivers of growth exacerbate inequity 0.0 10.0 20.0 30.0 40.0 Lowest Quintile Second Quintile Middle Quintile Fourth Quintile 81st - 99th Percentiles Top 1 Percent Changes in Share of Total Household Income, 1979 - 2007 1979 2007 Nonfinancial Corporations Sector Labor Share 140 120 100 80 60 40 20 0 1940 1950 1960 1970 1980 1990 2000 2010 2020 2013 research.stlouisfed.org Index 2005=100 Profits
- 65. The Inclusive Growth Paradox 49 -.20.2.4.6 WageGrowth(1990-2000) 0 .1 .2 .3 .4 Poverty Rate (1990) Inequity is bad for growthDrivers of growth exacerbate inequity 0.0 10.0 20.0 30.0 40.0 Lowest Quintile Second Quintile Middle Quintile Fourth Quintile 81st - 99th Percentiles Top 1 Percent Changes in Share of Total Household Income, 1979 - 2007 1979 2007 Sources: Federal Reserve Bank of St. Louis; Congressional Budget Office; RW Ventures Analysis Nonfinancial Corporations Sector Labor Share 140 120 100 80 60 40 20 0 1940 1950 1960 1970 1980 1990 2000 2010 2020 2013 research.stlouisfed.org Index 2005=100 Profits
- 66. The Inclusive Growth Paradox 49 -.20.2.4.6 WageGrowth(1990-2000) 0 .1 .2 .3 .4 Poverty Rate (1990) Inequity is bad for growthDrivers of growth exacerbate inequity 0.0 10.0 20.0 30.0 40.0 Lowest Quintile Second Quintile Middle Quintile Fourth Quintile 81st - 99th Percentiles Top 1 Percent Changes in Share of Total Household Income, 1979 - 2007 1979 2007 Sources: Federal Reserve Bank of St. Louis; Congressional Budget Office; RW Ventures Analysis INCLUSION is a BUSINESS IMPERATIVE Nonfinancial Corporations Sector Labor Share 140 120 100 80 60 40 20 0 1940 1950 1960 1970 1980 1990 2000 2010 2020 2013 research.stlouisfed.org Index 2005=100 Profits
- 67. What is Inclusive Growth? 50 TotalWealth Distribution of Wealth
- 68. What is Growth? 51 TotalWealth Distribution of Wealth
- 69. What is Growth? 52 Distribution of Wealth TotalWealth Change in Height (Accumulation)
- 70. What is Equity? 53 TotalWealth Distribution of Wealth
- 71. What is Equity? 54 TotalWealth Change in Slope of Line (Distribution) Distribution of Wealth
- 72. What is Inclusive Growth? 55 TotalWealth Distribution of Wealth
- 73. What is Inclusive Growth? 56 TotalWealth Change in Accumulation and Distribution Distribution of Wealth
- 74. What is Inclusive Growth? 56 TotalWealth Change in Accumulation and Distribution How can we enable this growth…. …with a more equitable distribution? Distribution of Wealth
- 75. The Growing Exclusion of the Poor 57
- 76. The Growing Exclusion of the Poor 58
- 77. The Growing Exclusion of the Poor 59
- 78. The Growing Exclusion of the Poor 59
- 79. The Growing Exclusion of the Poor 60 $1,133 -$213 -$439 -$354 -$128 Difference in $ DifferenceinBillions
- 80. 80 Principles for Poverty Alleviation through Inclusive Growth “It’s the Economy” Focus on opportunities (specific assets, markets & growth drivers) to leverage (not supplant) markets to create value. 61
- 81. 81 Principles for Poverty Alleviation through Inclusive Growth “It’s the Economy” Focus on opportunities (specific assets, markets & growth drivers) to leverage (not supplant) markets to create value. “Skate to Where the Puck Is Going to Be” It’s the next economy. Stop putting poor people in old economy jobs and businesses! 61
- 82. 82 Principles for Poverty Alleviation through Inclusive Growth “It’s the Economy” Focus on opportunities (specific assets, markets & growth drivers) to leverage (not supplant) markets to create value. “Skate to Where the Puck Is Going to Be” It’s the next economy. Stop putting poor people in old economy jobs and businesses! New Civics Embrace new cross-sector partnerships, networks, and institutions to inform and implement work. 61
- 83. 83 Principles for Poverty Alleviation through Inclusive Growth “It’s the Economy” Focus on opportunities (specific assets, markets & growth drivers) to leverage (not supplant) markets to create value. “Skate to Where the Puck Is Going to Be” It’s the next economy. Stop putting poor people in old economy jobs and businesses! New Civics Embrace new cross-sector partnerships, networks, and institutions to inform and implement work. Act in Context Activities & geographies succeed or fail in context of each other & their interactions in place. Strategies and initiatives need to be aligned, integrated & mutually reinforcing. 61
- 84. 84 Principles for Poverty Alleviation through Inclusive Growth “It’s the Economy” Focus on opportunities (specific assets, markets & growth drivers) to leverage (not supplant) markets to create value. “Skate to Where the Puck Is Going to Be” It’s the next economy. Stop putting poor people in old economy jobs and businesses! New Civics Embrace new cross-sector partnerships, networks, and institutions to inform and implement work. Act in Context Activities & geographies succeed or fail in context of each other & their interactions in place. Strategies and initiatives need to be aligned, integrated & mutually reinforcing. Inclusion is Not a Separate Economic Practice It’s an intentional, integral design principle for every growth activity. 61
- 85. Leverage Points for Sustainable and Inclusive Prosperity The Next Economy Offers Huge Opportunities for Aligning Poverty Alleviation and Growth 62
- 86. Leverage Points for Sustainable and Inclusive Prosperity Enhance Regional Concentrations/ Clusters The Next Economy Offers Huge Opportunities for Aligning Poverty Alleviation and Growth 62 Inclusive Clusters: Chicago FOOD
- 87. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations/ Clusters The Next Economy Offers Huge Opportunities for Aligning Poverty Alleviation and Growth 62 Inclusive Clusters: Chicago FOOD Targeted inclusive training for emerging industries: YearUp
- 88. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations/ Clusters Develop Innovation- Enabling Infrastructure The Next Economy Offers Huge Opportunities for Aligning Poverty Alleviation and Growth 62 Inclusive Clusters: Chicago FOOD Doer-Maker Space: Blue1647 Targeted inclusive training for emerging industries: YearUp
- 89. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Create Effective Public & Civic Culture & Institutions Enhance Regional Concentrations/ Clusters Develop Innovation- Enabling Infrastructure The Next Economy Offers Huge Opportunities for Aligning Poverty Alleviation and Growth 62 Inclusive Clusters: Chicago FOOD Doer-Maker Space: Blue1647 Neighborhood/ Sub-Regional Business Planning: Greater Chatham Initiative Targeted inclusive training for emerging industries: YearUp
- 90. Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Increase Spatial Efficiency Create Effective Public & Civic Culture & Institutions Enhance Regional Concentrations/ Clusters Develop Innovation- Enabling Infrastructure The Next Economy Offers Huge Opportunities for Aligning Poverty Alleviation and Growth 62 Inclusive Clusters: Chicago FOOD Doer-Maker Space: Blue1647 Neighborhood/ Sub-Regional Business Planning: Greater Chatham Initiative Industrial land reuse: Casey-Atlanta Targeted inclusive training for emerging industries: YearUp
- 91. Historically “Neighborhood of Choice” for Middle-Class African American Population 63 Regional Role: Home to many AA-owned businesses Deployed workers into gov’t., mfg, middle mgmt., etc. Primarily bedroom community Neighborhood Characteristics: Multi-generational families Quality, affordable homeownership Family-friendly – safe, good transit/transportation, quality schools, strong commercial corridors
- 92. Threatened by Convergence of Global, National and Local Dynamics 64 Hollowing out of middle class Frozen housing market Demographic changes/incoming population Source: RW Ventures analysis using Dynamic Neighborhood Taxonomy, 2000 and 2010
- 93. The Role of Neighborhoods within Regions 65 Neighborhoods of Choice Neighborhoods as collection of amenities – housing, retail, public goods, etc. – interacting in place Whole greater than the sum of its parts Emphasis on quality of life
- 94. The Role of Neighborhoods within Regions 65 Neighborhoods of Choice Neighborhoods of Opportunity Neighborhoods as collection of amenities – housing, retail, public goods, etc. – interacting in place Whole greater than the sum of its parts Emphasis on quality of life Neighborhoods as collection of assets – labor, land, businesses, etc. - nested in larger markets Function = develop and deploy assets into larger systems Emphasis on economics
- 95. Building a Community of Opportunity & Choice 66 16 mutually-reinforcing strategies – Tying neighborhood assets to regional markets – Ranging from appraisal gap financing, to middle-skill placement to cluster supply chains.
- 96. Building a Community of Opportunity & Choice 66 16 mutually-reinforcing strategies – Tying neighborhood assets to regional markets – Ranging from appraisal gap financing, to middle-skill placement to cluster supply chains. Modeling new partnerships & programs designed to be replicable across region New institutional infrastructure: – Engaging community & regional stakeholders from public, civic, and private sectors – Accountable to community & markets – Flexible, distributed work, and entrepreneurial
- 97. Transformative Initiatives 67 Integrated Workforce Center, with targeted regional employer partners Small Business Capacity Building, for firms in cluster supply chains Single Family Rehab Investment Fund Anti-Violence Marketing Campaign Extended After & Out-of-School Programming New Institutional Infrastructure
- 98. Agenda From Poverty Alleviation to Market Based Development2 Market Based Development in The Next Economy3 The Promise of Inclusive Growth4 68 Implications for the Federal Government5 Winning? The Numbers1
- 99. Multiple Roles 69 Enabling Create optimal infrastructure for market to perform; increase productivity Role Public goods; market preconditions Market Rationales Property rights; law enforcement; transportation infrastructure Examples
- 100. Multiple Roles 69 Improving Fixing markets Externalities, information imperfections, entry barriers Anti-discrimination; data, platforms for market efficiency (e.g. credit scoring; securitization) Enabling Create optimal infrastructure for market to perform; increase productivity Role Public goods; market preconditions Market Rationales Property rights; law enforcement; transportation infrastructure Examples
- 101. Multiple Roles 69 Using Moving markets on their margins Positive externalities; more efficient approach to non- market goals (equity, public welfare) Enterprise Zones; New Markets Tax Credit (NMTC); CRA (in part) Improving Fixing markets Externalities, information imperfections, entry barriers Anti-discrimination; data, platforms for market efficiency (e.g. credit scoring; securitization) Enabling Create optimal infrastructure for market to perform; increase productivity Role Public goods; market preconditions Market Rationales Property rights; law enforcement; transportation infrastructure Examples
- 102. Multiple Roles 69 Degree to which market and asset development goals are already aligned Getting Assets Market Ready Moving assets to market (developing assets in ways which yield growth) Non-market objectives (but market awareness) IDAs; Brownfield Remediation; Education and training Using Moving markets on their margins Positive externalities; more efficient approach to non- market goals (equity, public welfare) Enterprise Zones; New Markets Tax Credit (NMTC); CRA (in part) Improving Fixing markets Externalities, information imperfections, entry barriers Anti-discrimination; data, platforms for market efficiency (e.g. credit scoring; securitization) Enabling Create optimal infrastructure for market to perform; increase productivity Role Public goods; market preconditions Market Rationales Property rights; law enforcement; transportation infrastructure Examples
- 103. Affordable Housing Workforce Training Small Business Assistance Upgrading Roads and Rail Export Strategy HUD Section 8 Dept. of Labor Workforce Inv. Act Dept of Commerc e Int’l. Trade Admin. Dept. of Transpo. SAFETEA- LU Programs Small Business Admin. Loans From fragmented, top-down programs … 70
- 104. Develop Innovation- Enabling Infrastructure Create Effective Public & Civic Culture & Institutions Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations Increase Spatial Efficiency Comprehensive Metropolitan Strategy HUD Section 8 Dept. of Labor Workforce Inv. Act Dept of Commerc e Int’l. Trade Admin. Dept. of Transpo. SAFETEA- LU Programs Small Business Admin. Loans From fragmented, top-down programs … 70
- 105. Develop Innovation- Enabling Infrastructure Create Effective Public & Civic Culture & Institutions Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations Increase Spatial Efficiency Comprehensive Metropolitan Strategy Integrated Investment by Federal Government, States and Others White House Office of Urban Affairs HUD Section 8 Department of Labor Workforce Investment Act Small Business Administration Loans Department of Transportation SAFETEA-LU Programs Department of Commerce International Trade Administration 71
- 106. Cross-Agency Regional Teams Pooled and Flexible Funding Support for Regional Capacity Building “New Federalism” Partnership Develop Innovation- Enabling Infrastructure Create Effective Public & Civic Culture & Institutions Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations Increase Spatial Efficiency Comprehensive Metropolitan Strategy Integrated Investment by Federal Government, States and Others White House Office of Urban Affairs HUD Section 8 Department of Labor Workforce Investment Act Small Business Administration Loans Department of Transportation SAFETEA-LU Programs Department of Commerce International Trade Administration 71
- 107. Producing Results 72 Promise Zones White House Manufacturing Institutes Strong Cities, Strong Communities Partnership for Sustainable Communities DOE Innovation Hubs White House Office of Urban Affairs Neighborhood Revitalization Initiative Regional Innovation I6 Challenge
- 108. Enable, Improve and Use Markets; Prepare Assets for Next Economy 73 New legal forms tailored to next economy wealth creation, e.g. community/crowd-sourced investment Infrastructure reconnecting people & places to economic mainstream, e.g. BRT in low-income communities New intermediaries to strengthen inclusion, e.g. demand-driven workforce intermediaries, inclusive clusters Public goods that lower barriers to entry, e.g. open source data, open networks and platforms Invest in inherently inclusive markets, advanced industries e.g. R&D grants for “blue collar” STEM; TA-backed finance for priority industries Investment vehicles for next economy assets and opportunities, e.g. social impact funds
- 109. Sit at the Local Table… 74
- 110. The Future of The War On Poverty 75 Focus on market-based inclusive growth and bring more Americans into the economic mainstream. Need-based programs matter! Keeping many people out of poverty. Welfare doesn’t solve for the underlying causes of poverty, which are being exacerbated in the next economy. NEED-BASED PROGRAMS
- 111. © RW Ventures, LLC 2015 Did We Win the War on Poverty? Fighting the Good Fight – What Still Needs to Be Done? Chicago Federal Executive Board June 16, 2015 Robert Weissbourd RW Ventures, LLC
- 112. Case Study: Greater Chatham Initiative (GCI) 77 Pilot “Comprehensive Neighborhood Growth Plan” to refine neighborhood role as— – Community of Opportunity, with assets that are aligned & deployed into the regional economy – Community of Choice, that offer attractive housing & amenities to attract & retain residents Integrates market analytics with regional & local “civic” engagement to identify economic opportunities & challenges Produces initiatives, infrastructure, and objective strategic foundation (the Plan) for community transformation and growth