By Natasha Khwaja
Over the past five years, the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act have created an unprecedented surge in funding for local economic development. Federal grant programs designed using this funding, including the Build Back Better Regional Challenge and Recompete Pilot Program, have transformed the terrain of place-based policy in the United States. Both programs have laid the groundwork for increased capacity and cross-sector collaboration in communities and begun to generate ample learning on how to design and manage such funding opportunities in the future. More critically, they have increased the appetite and need for continued funding to sustain progress and coordination infrastructure. With the prospect of additional federal investment uncertain, how do we continue to fund place-based capacity and innovation in economic development? Looking forward, how do we build on progress made and advance learnings from the experiment of the past five years?
Our panel discussion titled “Where do we go from here? Implications for Policy, Philanthropy, and the Private Sector,” featured Heidi Binko, Co-Founder and Chief Executive Officer of the Just Transition Fund; Alejandra Castillo, former Assistant Secretary for Economic Development at the US Department of Commerce; and Becky McCray, Co-Founder of Save Your Town. The panel was moderated by Rohan Sandhu, Co-Founder and Senior Research Fellow at Reimagining the Economy. Here are some of the main takeaways from the discussion.
- Creatively continue both formal and informal collaboration
The novel cross-sector coalitions formed under the federal government’s grants represent a major success for building place-based capacity to meet economic development challenges. Other panels throughout the convening embodied this development, placing local government officials in conversation with economic developers and non-profit leaders. But how does this work continue in the absence of the shared purpose that Recompete and Tech Hubs provided? "Communities of Practice" can be key levers to orchestrate cross-regional collaboration and disseminate learnings that keep momentum going. There is also a low-cost opportunity for place-based foundations to take up the mantle and continue to convene regional stakeholders. The Just Transition Fund (JTF) is already making strides here through their newly launched Local Economy Lab and annual JTF National Convening, which provide continued public-private networking opportunities and strategy development funding for coal-impacted communities across the country. Targeting funding to coal-impacted communities in particular has been a successful strategy for JTF to crowd in additional private investment and sustain measurable impact.
Additionally, the panel stressed the value of informal collaboration to continue to bring more people into place-based economic development work—whether simply inviting stakeholders not directly involved to events or making time to connect over coffee to build awareness of needs and initiatives across a region. This includes leveraging existing trusted regional networks—for example, sports leagues or trade consortia—as a means to increase coordination on economic development.
- Prioritizing narrative and storytelling
The federal government’s place-based investments are poised to create thousands of new, high-quality jobs and increase labor force participation in distressed, under-invested communities across the country. Despite these innovative, unprecedented funding models, the EDA failed to document and tell the story behind this funding. It is not enough to make funding available. Buy-in from both impacted communities and elected representatives needs to be constantly generated by telling the story of community needs and connecting it to a narrative around actions being taken. This is particularly important when making investments that are future-oriented, because communities care most about what’s happening in the current moment. Relatedly, elected officials need to be engaged to build support for continued investments. The impact of recent place-based investments is just beginning to surface. As it does, it is critical that local economic developers and government officials engage their federal elected representatives to communicate this impact and the value of such investments.
- Doing more to bring in rural communities
Tech Hubs and Recompete were notable for making capacity-building grants available to communities often left out of hyper-competitive federal funding opportunities. This helped shift investments to communities that needed it most. However, even now, several rural communities—places with less than 10,000 residents—were still largely disfavored. Overcoming this requires economic developers and funders to meet stakeholders in rural communities where they are at, which includes both avoiding technical jargon and a scenario where economic development is orchestrated by white papers and requests for proposal that rural leaders simply do not have bandwidth to engage with.
Ultimately, in the words of former Assistant Secretary Castillo, “economic development is not a one-off— it has to be relentless, consistent, and committed.” Whether or not the federal place-based investments of the past few years were an aberration remains to be seen. But the experiment has certainly provided local economic developers, government, funders, and the private sector with a strong foundation of what success could look like, lessons to build on, and momentum to continue the work.
