New Orleans, Detroit, Newark, Northern California, Haiti, Greece…The list goes on and on. What do these cities, regions, and countries have in common? They have been ravaged by diverse disasters – man-made and force majeure. These calamitous events devastate communities, demand reinvention, and can encourage mass exodus of industry and population. As tragic as these events appear in the moment, they can present unique opportunities for communities to emerge stronger and better than before. The ability to mitigate the devastation of these types of events and position a community for a strong recovery is called economic resilience.
Economic Resilience is a term you may have heard before. But what does it really mean and why does it matter? The U.S. Department of Commerce describes it as “An area’s ability to prevent, withstand, and quickly recover from major disruptions to its economic base.” These “major disruptions”, shocks, or crises impede the prospects for economic growth, population stability, and the capacity of communities to provide basic services. Absent preparation, strong strategy, and a concerted response, these crises can threaten a community’s overall quality of life in the near-term and diminish its long-term trajectory for success. Economic resilience is about community readiness for crises by planning for the worst case scenario on the front end and being aggressive in the response on the back end during the recovery phase. Simply put, resilience is about a community’s ability to “bounce back” faster, stronger and better after a significant event has occurred. Crises present a unique opportunity to aggressively fix flaws in the system and competitively reposition communities in the marketplace as leadership reestablishes order and economic growth. This perspective is essential to recognizing that crises present an opportunity to see the glass as half full and to finish filling it up with the needed components to make your recovery optimal.
Natural disasters and economic downturns are ever-present threats that cities and regions must be aware of and be prepared to manage. Most communities believe that their risks for crises are low. Unfortunately, this tends to be untrue. Crises happen unexpectedly and are rarely accurately predicted. The pace, quality, and sustainability of a community’s recovery post-crisis depends on the extent to which they have prepared. Central to viable economic resilience is coupling programmatic and project management capabilities to manage on-the-ground realities while fixing deeper foundational challenges to sustain and grow the economy over time. That is, communities must be nimble, assertive, and certain in their tactical immediate responses to crises while ensuring that policy and practice over the long-term is focused on economic competitiveness. A crisis should not be wasted, rather it should be leveraged as a chance to do things differently and better. Taking inventory of the regional and local assets that drive quality of life and retain and attract residents to a specific geography is critical. For example, many companies are drawn to the Boston area due to its strong concentration of tier 1 research universities, to the metro Phoenix region for its sunshine and quality of life, DC for its concentration of federal jobs and national policy influence, and the list goes on. Communities must be thoughtful and honest about their core value proposition, determine how to protect it, and reinforce/strengthen it after a crisis. This requires understanding the core assets which support the value proposition, examining vulnerabilities, and exploiting capabilities to use market shocks as a platform for reform and growth.
The stressful environment of chaos, uncertainty, and doubt following a crisis highlights the need to develop a well-designed plan. Crises disrupt our norms; that is, the way people carry out their daily activities, how business and government deliver services, how people respond to one another are all impacted and could and, most likely, will completely change. Crises usually happen fast and at unanticipated times; they require an immediate response, create a high degree of instability and uncertainty, and dramatically change the status quo. Perhaps more importantly, they create an opportunity for even greater changes. In this environment, a playbook is necessary so that recovery can occur quickly and the next phase of economic growth can be set in motion.
Economic developers have the gargantuan task of driving economic growth. Normally, this is measured in terms of private investment, job creation, and wages. That said, economic developers are really marketing quality of life and opportunity for people. A fundamental premise of the United States is the ability to determine one’s own future based on work ethic, skills, and abilities. Crises threaten this ability in that they take this power away from individuals, families and communities. This sense of vulnerability can undermine recovery by wedging deeper divisions between different groups, impeding the ability of communities to find a shared message and vision, and often can lead to an “every man is an island” response. Leadership from government, business, and the civic sector must make sure that their responses to crises are ones that affirm a united front, address the needs of their constituents, and implement recovery priorities along the lines of impact to people’s daily lives. The recovery response may range from ensuring restoration of basic public services in the near-term to ensuring that affordability is maintained for residents over the long-term.
Have you ever heard the adage “A failure to plan, is a plan to fail”? A plan for recovery and resilience should outline a path to restored prosperity and growth with concrete deliverables, tangible metrics, and delineated responsibilities. Without planning for recovery, the allocation of resources tends to be more disperse, the focus on investments and restoration of key assets lack clearly defined objectives, and the level of coordination around a myriad of decisions is nonexistent. One must note that communities rarely recover and return to exactly the same as they were pre-crisis, but with appropriate planning they can improve in some areas while maintaining the essence of their identity and lifestyle. To this point, communities should take a two-tiered approach to planning – development of a post-disaster response plan to return society to some sense of normalcy and development of a longer-term redevelopment, recovery, and revitalization strategy after a crisis has happened to figure out what the new normal is and ensure that it is at least somewhat better.
As communities develop their strategies for resilience and recovery, it is essential that they consider these concepts in tandem. Regions, cities, and organizations that have envisioned and planned for the type of community that they aim to be, can use the circumstances of the crisis to reposition themselves toward the long-term objectives that they have set. For instance, if a community knows that its infrastructure around transportation, water and sewerage, fiber optics, or electricity is inadequate to compete for our targeted industries long-term, a natural disaster might represent an opportunity to rebuild with the desired technologies, environmentally appropriate materials, and serve to shift the value proposition to compete for targeted industries which need those resources. Or, if there is a mass vacancy of properties because of depopulation or industry flight, this may represent an opportunity to assemble land and construct new infrastructure to support large scale manufacturing or logistics opportunities. If communities have not engaged in some dialogue or has some objectives around these ideals before a disaster, it is very unlikely that they will reach some consensus about the prioritization of investments and opportunities after a crisis. The more prepared and thoughtful a community can be about a disaster before it happens, the greater the opportunity to use that negative occurrence as a catalyst for new possibilities.
According to the Economic Development Administration, establishing economic resilience in a local or regional economy requires the following; the ability to anticipate risk, evaluate how that risk can impact key economic assets, and build a responsive capacity. In consideration of risks, communities should explore the potential for major disruptions caused by occurrences such as natural disasters such as earthquake, fires, and floods; financial difficulty resulting from corporate failures or governmental bankruptcy; and sociopolitical instability as evidence by strikes, riots or crime. These types of incidents cause communities to lose population, businesses to flee, government services to be suspended or significantly diminished, and critical physical assets to be lost. Perhaps equally as important is the reputation hit that communities suffer after these types of occurrences. Some of this damage can be minimized by taking an honest assessment of the likelihood for these things to occur beforehand and taking measures to prevent or delay them. Clarity around the root causes and the ability to respond with specific actions that fix the systemic problems, address impacted areas (topically and geographically) with reinvention and a results-based orientation, and decreasing the likelihood for reoccurrence is essential. Doing this requires significant discussion between diverse stakeholders in the public, private and nonprofit sphere and establishment of some shared goals around the future of the community. Crises be-it manmade (financial, social, physical) or natural (climate or environmental) often visibly impacts housing, public services, safety, school systems, and major infrastructure. The impact also extends to a family’s financial stability while indirectly influencing a community’s self-esteem, sense of optimism, and propensity to be aggressive in developing the economy. Recognizing the full impact of these disruptions (physical and psychological) beforehand, makes responding to them much easier. That said, despite detailed planning and preparation, crises will inflict unforeseen harm and communities will need to adjust.
A popular misconception is that a crisis is the sole responsibility of government to manage negative events and the fallout resulting from them.
This is far from the truth, comprehensive and sustainable recovery requires that the response be inclusive of a myriad of public, private, nonprofit, community, philanthropic, education leaders and other partners. The quality of these institutions, caliber of market and labor policies, and level of integration throughout the business-civic-political ecosystem is a strong indicator of a community’s economic resilience. No one entity or individual has sufficient resources, perspective, or capacity to tackle economic resilience and recovery in a silo. Establishing rapport and a practice of collaboration prior to any crisis makes it easier for these types of institutions to work together after one occurs and move forward with precision and clear lines of responsibility and accountability.
As one who has led economic recovery efforts in New Orleans and Detroit, the challenges of resilience and recovery are complicated. However, thinking about the path to recovery under the framework below can be helpful in figuring a pathway forward.
1. Triage – Assess immediate damages and stabilize the situation based on priorities.
2. Unify and Unite - Pull together business, civic, and political leadership and the broader community around the concept of recovery, cohesion, and shard goals.
3. Tell the story and challenge truthfully – Leverage the media to tell the story of decline, demonstrate a collective resolve, and paint a picture of the path forward and opportunity. These events will garner media attention. Your community needs to drive this message versus allowing others to tell your story.
4. Identify Opportunities and Set Vision – Secure the essential assets and economic elements as a foundation for rebuilding and create a clear executable vision through broad engagement with short- and long-term objectives and metrics.
5. Drive strategic public and private investments in key infrastructure, institutions, and sectors that are foundational as well as those that present the greatest possibilities to increase a community’s competitive position. These investments whether in targeted industry sectors, education system, transportation and other infrastructure, or civic institutions refl ect the values of your market and project the message of who you aim to elevate in full recovery.
6. Execute! Execute! Execute! – The quickest path between two points is a direct line. Many times, communities tend to become fl ustered and question how to move forward after a disaster has occurred. For economic developers, deviating from basic practice fundamentals will yield little reward. Execute programs encompassing business retention and expansion, corporate attraction, small business, and real estate well and the returns will be palpable and the possibilities greater than they might be under normal circumstances.
The fact is that none of us know what tomorrow will bring. However, we do know that threats to stability abound. Creating an environment that acknowledges these threats and putting in place measures, protocols, and strategies to rebound effectively are paramount to an area’s resilience. Hopefully, a disaster will not happen to your community, but if it does you should be prepared and ready to leverage it to thrive. This kind of planning is not something you do once, check a box and then move on. Rather it is a continual process that requires revision and fl exibility. Circumstances and environments change and these changes must be refl ected in the plan. Flexibility throughout this process will ensure the most fluid response while a clear strategy and planning developed by a leadership collective will ensure a thoughtful and coordinated response. Focusing on people in the programming, investments, and policy will ensure that the actions taken refl ect the values and priorities of the community - not only as they have been, but also as the community envisions them to be. That said, economic growth and external investment will not occur if that story is not trumpeted aggressively, collectively, and strategically. With thoughtful planning, partnership across different sectors and solid execution of a basic economic development program a community can be optimally resilient and turn their crisis into an opportunity. Crises are menacing, but an inevitable reality. With the appropriate steps, messaging, and commitment your resilient community will have a quality recovery and secure a successful economic future.