Rural Wealth Creatoin


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Rural Wealth Creatoin

  1. 1. An Approach for Creating Wealth  in Rural Regions in Rural Regions Deborah Markley Wayne Fawbush Managing Director, CRE Managing Director CRE Program Officer Program Officer Coordinator, Wealth Creation  The Ford Foundation Resource Team
  2. 2. Wealth? Isn t it all about jobs? Wealth? Isn’t it all about jobs?• Our “jobs focus” hasn’t led to sustainable economic  j prosperity or quality of place in many parts of rural America• Creating quality of place requires the creation of wealth – broadly defined b dl d fi d – Healthy, skilled people – More resilient environment that contributes to sustained prosperity – Growing businesses that are reinvesting in place – Innovation in business, governments and non‐profits – Stronger, more inclusive leadership Stronger more inclusive leadership – Demand‐driven infrastructure that supports competitiveness – Public capital that leverages private and philanthropic resources  2
  3. 3. Why is this so important TODAY? Why is this so important TODAY?• Current public sector funding environment is challenged!• NADO – “There will be a pressing need for regional development  g ( g g organizations (including those designated as EDA Economic  Development Districts) to become more engaged and aware of  regional innovation strategies.”• Regional innovation strategies require private sector  engagement, cross‐jurisdictional collaboration, cross‐agency  collaboration • Constrained traditional resource environment requires similar Constrained traditional resource environment requires similar  skills • These skills are being built as part of wealth creation  strategies supported by the Ford Foundation strategies supported by the Ford Foundation 3
  4. 4. Outline for Webinar Outline for Webinar• Intro to Ford Foundation’s Wealth Creation Approach Intro to Ford Foundation s Wealth Creation Approach  to expanding livelihood opportunities – Wayne  Fawbush• Exploring two tools behind this approach – Value Chains – Creating multiple forms of wealth• Discussion – hearing from you gf y 4
  5. 5. Ford Foundation Intent Ford Foundation Intent• To have a positive impact on high‐poverty communities in  rural America by using a systems approach to wealth creation lA i b i h lh i 5 | Financial Assets| US, 2010
  6. 6. Why a Systems Approach? Why a Systems Approach?• Systems approach connects practitioners at the community  y pp p y level and makes resource providers more effective by focusing  work on common goals. | Financial Assets| US, 2010 6
  7. 7. Questions we are ALL asked/asking Questions we are ALL asked/asking• What do we actually do? What do we actually do?• Where do we find the  resources?• How will we know if our  work is successful? work is successful?• Who will actually benefit?• How is the effort How is the effort  sustained over time? | Financial Assets| US, 2010 7
  8. 8. Characteristics of Ford s Work Characteristics of Ford’s Work• Focus on regions Focus on regions• Invest in clusters of people and organizations  working on the ground working on the ground• Build stronger value chains• Create and measure multiple forms of wealth 8
  9. 9. Focus on regions| Financial Assets| US, 2010 9
  10. 10. Invest in clusters of people and  organizations| Financial Assets| US, 2010 10
  11. 11. Build stronger value chainsproduction aggregation retail | Financial Assets| US, 2010 11
  12. 12. Create and Measure Multiple  Forms of Wealth Forms of WealthType of Wealth Strategy How will your strategy impact the stock of skills and physical and mental healthiness of Individual people in a region? How will your strategy impact the stock of trust, relationships, and networks that support Social civil society? Intellectual How will your strategy impact the stock of knowledge, innovation and creativity? Natural How will your strategy impact the stock of unimpaired environmental assets in a region? Built How will your strategy impact the stock of fully functioning constructed infrastructure? Political How will your strategy impact the stock of power and goodwill held by individuals, groups, and/or organizations? How will your strategy impact the stock of unencumbered monetary assets at the Financial individual and community level? | Financial Assets| US, 2010 12
  13. 13. Guiding Principles of a Wealth  Creation Approach h• Wealth is created and “sticks” in low wealth rural areas.• Wealth is tied to place by value  chains developed within sectors. chains developed within sectors• Wealth‐based development  is demand driven.• Measurement is integrated into  the entire process.• Investment fuels wealth creation. Investment fuels wealth creation.• Strategically flexible while  doing no harm. | Financial Assets| US, 2010 13
  14. 14. Key Value Chain Lessons  from Ford’s Work f d’ k• No single organization can do this work alone – No single organization can do this work alone  requires collaboration• Sustainable development requires asking a simple  p q g p question – what do we produce here that is in  demand in other places?• An effective tool for making that connection is a  value chain• How you work to build that value chain does make a  difference 14
  15. 15. What is a Value Chain?  What is a Value Chain?• Compared to “Supply Chain” – Value Chains  emphasize relationships among the participants in  the chain, from producers to consumers• Healthy Value Chains – provide social and economic  benefit to all players in the chain while providing  greater protection for ecosystems and natural  greater protection for ecosystems and natural resources; “win‐win”• Process – bringing people together across the value Process – bringing people together across the value  chain so they can see how their self‐interest can  align with benefits to others along the chain g g 15
  16. 16. Value Chain Example Value Chain Example Mayor – Proposed Solar Value Chain Cotton Plant Mayors – Delta towns Electricity  Consumers  in Cotton  Solar Farm  Entergy Corp Plant owned by  AR Rural Electric  City of Cotton  Coops Plant, AR l AR  Renewable  Energy Assn AR Dept of  AR D t f Financial  Financial Energy PartnersStellar Sun Ground  alt.ConsultingConnection Arkansas 16
  17. 17. Value Chains as a Tool for LDDs Value Chains as a Tool for LDDs• Focuses on building supply in response to demand g pp y p• Intentionally connects rural and urban places in a region,  creating stronger relationships in support of development• Links lower wealth and higher wealth individuals/  organizations and regions, creating opportunities for  investment along the value chain, particularly from the  g ,p y private sector• Focuses on assets defined broadly, including the  use/preservation of natural, historic, cultural assets that are  / i f l hi i l l h so important in many rural regions 17
  18. 18. Investing in Value Chains Investing in Value Chains• Once you’ve articulated a value chain that offers potential in your  region, engaging people across the chain requires identifying value  propositions• Different way to partner – not asking them for something but  offering to help them achieve their goals  – Why would a low‐wage employer in Savannah partner with a social service  provider to help employees access services? reduced absenteeism, lower  turnover rates, increased productivity turnover rates increased productivity – Why would a rural outsourcing company invest in workforce training  program at a community college? access to skilled workforce, increasing  the pipeline of skilled workers• Value chain becomes a way to attract new investment to a region – engages the private sector, driven by external demand, driven by  finding that “win‐win” 18
  19. 19. Creating Multiple Forms of Wealth Creating Multiple Forms of Wealth One of the principles behind Ford’s approach is intentional  p p pp focus on creating (or at least not destroying) seven forms of  wealth – Wealth MatrixCCons of this approach – I ’t it h d f thi h Isn’t it hard enough to produce  ht d economic benefits in most rural areas from community  economic development efforts? Pros of this approach – If you are clear about value  propositions – and alert to defining them – creating economic  benefits (and financial wealth) can happen at the same time  benefits (and financial wealth) can happen at the same time that you are building social capital and taking care of the  environment, for example. 19
  20. 20. e.g., Solar Value Chain e.g., Solar Value Chain• Financial  – Fees to town from electricity sale – Income from installation and maintenance jobs • Environmental – Increased clean energy use by utilities• Individual – New skills for local residents trained to do solar New skills for local residents trained to do solar  installation and maintenance• Social –NNew way of working together to capture the benefits of  f ki h h b fi f producing clean energy in Delta communities – model of  other communities Do No Harm Principle D N H Pi i l 20
  21. 21. Discussion  Discussion• What do you see as the potential for value chain   y p development in your regions? Where do you see  your organizations fitting into a value chain?• What are the sectors that show the most promise What are the sectors that show the most promise  for value chain development?• How do you see the work you are doing already How do you see the work you are doing already  contributing to the creation of multiple forms of  wealth?• Wh d What do you see as the challenges to building  h h ll b ildi value chains and focusing on wealth creation in  y your regions? g 21
  22. 22. Contact Information Contact Information Deb Markleyy www.energizingentrepreneurs.orgWayne 22