Economic development in America was, at the beginning, essentially a by-product of exploitation of natural resources and trade. Companies established in locations, made something out of whatever raw materials were available, and natural economies developed around those industries to serve them. In Detroit, it was cars, in St. Louis, fur trading, in Chicago, it was deep dish pizza.
However, in more recent years, with local economies shifting, withering, and in some cases, dying, utilizing natural resources and labor markets weren't enough to keep a robust economy. Increasingly, cities and states turned to various incentives and projects to try and spur companies large and small to locate in their area, spend money and add jobs to the local economy. Various tax incentives have been used across the country, and increasingly more and more inventive project/programmatic initiatives have been used in an effort to be a panacea for local economic ills.
Among practitioners, economic development varies somewhere between a fad and a trend. Some activities have stuck around for decades (Tax Increment Financing), others less than a few years (remember innovation parks?) And yet, because each attempt works in some degree, there will be a continued effort to try new things to help local areas increase their economic base. While, in this author's opinion nothing is more important than addressing systemic educational inequalities and improving the quality of housing to help improve local economies, it's a lot more fun to talk about what new and fun things cities will try to do to bolster their local economy - despite the fact that few if any of these initiatives actually ever work.
So - what's next for economic development in the USA? I offer two (and a half) ideas for the next half-decade.
1. Micro-manufacturing/maker spaces.
Micro-manufacturing (micro meaning small, not computer chips) and/or maker spaces aren't anything particularly new in the economic development world - many variations on the same theme have been popping up all over the country in one form or another. Kitchen incubators for food, maker spaces like NextFab for manufacturing - these facilities provide needed space for very small businesses to get their foot in the door with limited overhead expense while they explore their business model. It's like co-working spaces for non-office jobs. Philly, already with a handful of these spaces has people interested in adding another in East Falls.
What there isn't - yet - are spaces that bridge the immense gap between a facility designed to help the sole entrepreneur and one made to house bigger businesses - those slightly more mature businesses that have some scale, but don't have the financial backing or track record to get their own space. Particularly in this age of romanticized manufacturing, I predict that many of these smaller maker spaces will generate larger demand for bigger facilities with even more expensive dedicated equipment and technical support, provided by universities. I don't see the typical non-profit managing one of these huge buildings - it's just too much work. However, I point to the Rutgers Food Innovation Center in Burlington, NJ as an example of one of these facilities - Pennovation is another, though that's more about tech innovation than making physical products. I expect many of these types of facilities becoming more common across the country, particularly since funders want to see their investments resulting in measurable outcomes over time.
2. Experiential Marketing
Millenials are the next big demographic wave, and they're entering prime family formation and career earning years. This means that their dollars are going to be chased harder than an attractive cat in a Pepe LePew cartoon. What does that look like? To understand how the world will market to Millenials, we must first understand the economic forces of Millenials. They're the most educated and debt-ridden generational cohort ever. They're also experiencing delayed adulthood (or extended adolescence, depending on your definition) and are arguably the most anxious generation. So, what does the world provide a group of people with tons of education, no money, and no "chill"? Experiences - especially soothing ones.
Experiential marketing is right now in its infancy and it's only going to get bigger. Millenials now rank parks and restaurants as higher criteria in a city than public schools (not that surprising, most don't have or are even considering child-rearing) or public transportation (quite surprising, but could reflect the popularity of ridesharing). It's no surprise then that parks like the High Line in New York are being copied across the country (including the Reading Viaduct here in Philly). Events around restaurants and food - items with accessible price points for lower-wage millenial workers - are big and getting bigger. In Philly alone there was over 50 food events in 2017 - I seriously doubt there were more than a dozen back in 2000. A merging of public spaces/placemaking (another economic development trend) and restaurants/experiences is a logical extension of this pattern. This will probably be less Shake Shack in Bryant Park and more Dinner en Blanc. Of course, with the continued rise of brewpubs, craft beers, and craft distilleries, these will absolutely be backed by creative alcoholic purveyors.
2.5 - Adult Dorms.
While it's not really an economic development action, I do think we may see a shift in housing, based on a convergence of social activism, environmentalism, and lack of income. A communal lifestyle, more reminiscent of dormitories than independent living is coming. While it sounds far fetched, I can honestly foresee these facilities supported with programs/courses on "how to adult" (such as financial management classes), live demonstrations from the staff at Tasty on how to cook, and an Uber/Lyft contract for transportation and meal delivery services by Blue Apron or Amazon. In an era of on-demand services, this format of living could be the pinnacle of convenient living.
What do you think? Will this be real life? Or is this just fantasy? Am I caught in a land slide with no escape from reality?
Let me know in the comments!
General thoughts and musings about the work SSC Solutions does and other things happening in and around Philadelphia