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In last month’s column, we discussed how communities should focus on their assets rather than their needs when developing economic strategies. Needs-based development often causes communities to offer unwise tax incentives in hopes of luring job growth. Often the money lost due to these tax breaks would be better spent on education, infrastructure, and public safety. A simple refocusing of the development discussion away from needs and toward assets can help a community develop a meaningful vision. Beyond this advice, there is no universal model of development that works for all communities, but there are best practices found in many cities that can provide a guide for community development. On the edge of the Appalachian Mountains, Berea, Kentucky is implementing a number of these best practices.
A Tolerant City
Berea has a history of being a tolerate college town. When founded in 1855, Berea College was the first integrated institution of higher learning in the nation. Today, the college has a well-known arts program. Students accumulate little to no debt because they work at the school or local arts-related shops to help pay their tuition. The school is known for this student support and a superb liberal arts education. The city of close to 14,000 people has a diverse economy. Berea’s robust community of artisans has developed innovative means to make a living off of their art. The city’s motto is the “Folks Arts and Crafts Capital of Kentucky—Where Art’s Alive.” Many of community’s artists sell their art in the Kentucky Artist Center located closely to an I-75 exit. These artisans represent an important cluster for the community’s economy, but the local economy is not limited to the arts. The college provides a large number of middle class jobs, and there are around 3,500 manufacturing jobs in the city—a significant percentage of the overall employment base. The overall economy is fairly productive. The city’s unemployment rate is slightly less than 7 percent.
The city does face the challenge of retaining manufacturing jobs in a state that has been shedding these types of jobs in recent years. Since 2005, Kentucky has lost around 11 percent of its manufacturing jobs. The city came to appreciate this challenge when an industrial company left a few years ago. In hopes of avoiding such an economic shock in the future, the community has developed a vision around its assets and not its needs. This vision seeks to strengthen the city’s local businesses and cultivate its cluster of artisans.
Leakage Analysis and Localism
To help implement this vision, the community hired the consultant, Michael Shuman, who is known for his promotion of local businesses. Schumann is a strong proponent of communities using leakage analysis to identify areas where a community’s assets are “leaking” out of the local economy. To perform this analysis for Berea, Shuman used data from the Business Alliance of Local Living Economies (BALLE). The organization seeks to formulate strategies for communities to retain and foster their local businesses for meaningful development. Community development is not only about economic growth but also the improvement of local institutions. Local businesses are a key component of this betterment. Local jobs keep more money in a community than big box jobs. In fact, a number of studies have shown how big box stores can also contribute less in city taxes than local businesses. By keeping more money in the community, local businesses lead to job growth in other sectors. Localism activist refer to this as the local multiplier effect. Shuman’s analysis for Berea claims that by strengthening local businesses, the community could add approximately 5,700 jobs to its labor force—a significant number for a small community. A great deal of this local growth is depended on Berea’s creativity cluster.
A Cluster of Artisans
The creative class theory of development is one of the best well-known academic theories in the social sciences. In The Rise of the Creative Class, Richard Florida argues that communities with large percentages of workers involved in the arts and other creative progressions are more likely to prosper than localities with traditional labor forces. The arts-based professions produce creativity externalities that improve the overall community. This theory is often criticized as being urban-centered and offering little help for rural and small communities. However, creative clusters can grow in these environments. Stuart Rosenfield describes how a combination of talent and innovation has produced a cluster of glassmakers in the rural mountains of North Carolina. Berea’s artisan-based development is another example of a cluster of artisans found in a small community.
The creative types certainly add to Berea’s economic and comprise a large part of the community’s vision to cultivate local economic opportunities. Nevertheless, the community’s officials and residents have been savvy enough to develop other assets as well—in particular a fairly robust manufacturing sector. Still, the city’s vision of developing local creative business offers future betterment for the community and a buffer incase there are decreases in manufacturing jobs. From Berea, a few lessons for other communities can be learned. First, the college has help create the community’s creativity cluster. Residents are trying to further develop this cluster by growing local businesses. Also, the proximity to I-75 ensures a volume of potential customers for these local businesses and helps maintain a health manufacturing section. Lastly, in Berea, local residents and officials work together to develop meaningful development strategies driven by assets-based vision. The city’s public engagement campaign stands out as one of the top development lessons to be learned. Berea shows us the role of vision, creative local businesses, and economic diversity in assets-based development. Next month, we will discuss another important component of the assets model of development—communication between public officials and citizens.
Authors: William Hatcher, Ph.D. is an assistant professor in the department of government at Eastern Kentucky University. He can be contacted via [email protected] Matt Oyer is a community development planner at the Heart of Georgia Regional Commission.