An approach for creating wealth in rural regions focuses on building value chains and creating multiple forms of wealth rather than just jobs. It takes a systems approach to connect practitioners across communities and regions to work towards common goals. Key aspects of the approach include focusing on entire regions, investing in clusters of organizations working on the ground, building stronger value chains between producers and consumers, and creating and measuring wealth in financial, natural, social, and other forms.

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. Wealth? Isn t it all about jobs?
Wealth? Isn’t it all about jobs?
• Our “jobs focus” hasn’t led to sustainable economic
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prosperity or quality of place in many parts of rural America
• Creating quality of place requires the creation of wealth –
broadly defined
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– 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
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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
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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
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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
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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
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| Financial Assets| US, 2010

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
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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
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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
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9. Focus on regions
| Financial Assets| US, 2010 9

10. Invest in clusters of people and
organizations
| Financial Assets| US, 2010 10

11. Build stronger value chains
production aggregation
retail
| Financial Assets| US, 2010 11

12. Create and Measure Multiple
Forms of Wealth
Forms of Wealth
Type 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?
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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.
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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
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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
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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 Partners
Stellar Sun
Ground alt.Consulting
Connection Arkansas
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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
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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
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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”
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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.
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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
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21. Discussion
Discussion
• What do you see as the potential for value chain
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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?
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22. Contact Information
Contact Information
Deb Markleyy
deb@e2mail.org
www.energizingentrepreneurs.org
Wayne Fawbush
w.fawbush@fordfound.org
www.yellowwood.org/wealthcreation.aspx
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