“Don’t let our doubts of today limit our tomorrow.” -Franklin Delano Roosevelt
THE NEXT FIVE
Much has been written about the five-year anniversary of the social and economic shutdown caused by the COVID-19 pandemic. Take a moment to look at this research from the Pew Research Center for some perspective. The impact on industry, the workplace, travel patterns, retailing, housing, and cities has been nothing short of profound. The cultural norms of how, when, and even why people work have shifted economic, workforce, and physical development practices. All of the above has required the practice of economic development to adapt to these new realities and has set the stage for a new era of development.
Let’s start by examining what has not changed. First, your community must still have a vision of what it wants to achieve and a roadmap to measure its progress. Second, jobs are still a critical measure of success because of the direct impact they have on individuals, families, and communities. Whether that job is in a traditional workplace, done remotely, or augmented by artificial intelligence agents, it will remain a cornerstone of successful economic development outcomes. Third, long-term success requires that economies, local and otherwise, are diverse and adaptable to a changing world. Economies that are over-indexed in one industry or source of revenue are less compelling to talented people and less investable for capital. Finally, leadership that is committed to long-term outcomes, which can be from either private sector leadership or elected leadership, is essential. Economies aren’t built, or rebuilt, in the short term. The willingness, and real commitment, to compete for and secure jobs, business investment, and to draw and retain talented people, requires resources year after year.
Much has changed, however. Economic development organizations and leaders must address these changes to apply the resources, energy, and leadership in new arenas of work. This starts with accepting some new realities. People can, and will, work differently going forward. Cloud computing, advancement of the digital infrastructure, and new remote work business models means that knowledge workers can work from anywhere. Traditional office spaces, whether in downtown towers or suburban office parks with no amenities, will have to be partially or completely redeveloped. Rural areas and small towns with great broadband have new opportunities to do tech-based work. Mixed-use developments that integrate housing, retail, culture, and well-designed office space will be more competitive but will require different tools, incentives, and practices to plan, build, and maintain.
Manufacturing and logistics, how and where we make and move things, has been the center of focus as globalization has retreated and incentives to secure supply chains have soared. First, trade routes have changed significantly as the United States economy has become less dependent on low-cost manufacturing from China and Chinese ports. Freight traffic has returned, but it is being consolidated in new ports and through different routes. E-Commerce exploded during the pandemic and has remained at high levels, eating away at local retailing and creating new consumer behaviors. The dominant economies of China and the United States were nearly interdependent prior to the pandemic, but we have stepped back from this period of peak-globalization and have regionalized. Nearly every supply chain was stretched from one end of the world to the other with very minimal redundancies. This has created shortages, ignited a new era of tariff/trade negotiations, and exposed geopolitical tensions. Food, pharmaceutical, automotive, semiconductor and other industries have, or are in the process of, becoming more regionalized to serve the dominant economies of North America, China, and Europe. On this issue, the changes have likely just begun to play out. Economic developers will play a big role in cross-border trade and investment, and in creating the new business locations and infrastructure necessary to succeed.
Three final thoughts. First, the rapid rise of artificial intelligence will require economic development organizations to prioritize energy infrastructure, including power generation, transmission, and regulatory modernization. Great periods of economic change often correlate to when we’ve made big advances in the energy sector, and the AI revolution requires we confront our energy issues rationally. Second, the redevelopment of urban areas, long shaped by stationary knowledge workers, will demand entirely new approaches to planning, investment, and community building. This will be expensive and take time. Finally, education and workforce development must become skills-based and much more market-oriented. Technology is fundamentally reshaping workforce needs, and the gap between employer expectations and available workforce training must be closed. Economic development organizations will play a more active role in ensuring that education systems align with business needs.
These paradigm shifts are deep and the stakes are high. Those that face the inconvenient facts, make change, and have a clear vision will likely win while others miss opportunities for growth, sustained revenue, and an opportunity for their residents.
Let’s have a great NEXT FIVE YEARS, lift each other up, and move forward together!
Please let us know how you see these changes impacting your local community specifically.
Kenny McDonald
President and CEO
One Columbus