Four Ways City Leaders Can Boost Entrepreneurship and Propel Economic Growth

This is a guest post by Josh Russell and Jason Wiens. This post is the fourth installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Startup density varies from city to city across the United States. (Kauffman Index of Startup Activity)

City leaders across America understand that entrepreneurship is key to the success of their economies. That is the message from the 2015 Local Economic Conditions Survey conducted by the National League of Cities.

In that survey, 47 percent of cities said the “number of new business starts” was a positive driver of local economic conditions. New business creation was viewed by more city leaders as source of local economic improvement than any other factor.

These perceptions of chief elected officials are in line with decades of data that show new and young businesses are the primary source of net new job creation. When it comes to job creation, age matters more than size.

But how do these perceptions reflect the reality of entrepreneurial growth in these cities? Is entrepreneurship flourishing in cities where leaders viewed it to be an important contributor to economic growth?

To answer these questions, we looked at a sample of cities linked to their metropolitan statistical areas from 2002 to 2012. Here is what we found:

  • Over the last decade, average startup rates are consistent among cities regardless of their views on new business creation.
  • Startup rates converged in 2012 to 6.9 percent for cities that believed startup rates were an impactful economic factor and to 6.8 percent for cities that did not.

While there is little difference between startup rates in cities that viewed new business creation as an impactful economic factor, the real story is found when we look at employment in startup firms.

The percent of employment in startups has diverged among cities that believe startups are and are not an important economic factor. In those cities that viewed startups’ impact positively, new businesses were adding more jobs than in cities where leaders did not view them to have a positive impact. In 2012, on average, firms in cities that viewed new businesses as having a positive impact started with 15 percent more employees.

2011 marked the first year of an increase in new business creation since the start of the Great Recession. To further boost entrepreneurship and propel economic growth, local leaders have a menu of tools available to them.

  1. Build connections. While capital constraints represent one of the primary challenges to entrepreneurs, research has shown that public venture funds and local incubation centers result in little to no benefit to entrepreneurs. Instead, cities should focus on fostering local connections among entrepreneurs and businesses. These local connections, as opposed to national or global contacts, are vital to an entrepreneur’s success. Focus should be put on events that cause entrepreneurs to think and act together, building a robust local ecosystem. Examples of early-stage entrepreneurship programs that can be implemented in cities include Startup Weekend and 1 Million Cups.
  2. Welcome Immigrants. Immigrants are twice as likely as native-born Americans to become entrepreneurs. These entrepreneurial gains are not limited to low-skill sectors, but include high-skill and high-tech sectors as well. Immigrants and children of immigrants represented 52 percent of key founders of high tech firms in Silicon Valley and over 40 percent of Fortune 500 founders. While legal barriers to immigrant entrepreneurship result in missed opportunities for U.S. economic growth, cities can capture the benefits by welcoming immigrants and supporting their entrepreneurial ambitions.
  3. Support Women. Women face many unique challenges to starting a business and are half as likely to start businesses as their male counterparts. Among the top challenges are financial capital, mentorship, and work-life balance. Women are one-third as likely to access equity financing through angel investments or venture capitalists as men and begin companies with nearly half as much capital. Mentorship plays an important role in developing successful entrepreneurs, yet nearly half of female entrepreneurs say a lack of available mentors is a major challenge facing their businesses. Parenting balanced with work also results in lower rates of entrepreneurship among women. Women with STEM Ph.Ds are significantly less likely to engage in entrepreneurship if they have a child under two, while there is no statistical difference in entrepreneurial rates of comparable men. Local policies that support women in entrepreneurship can create positive economic growth in cities.
  4. Develop Human Capital. Higher levels of education are associated with increased entrepreneurial activity. While a high ratio of college graduates means more entrepreneurial firms, a substantial high school completion rate can further increase a city’s startup activity. Developing a strong school pipeline can help promote human capital and develop a strong, local entrepreneurial ecosystem.

Stated simply, these policies are all about investing in people.

As entrepreneurship rates grow, entrepreneurs are reviving local economies across the nation. The role of city leaders in this arena is to create conditions that allow more entrepreneurs to start businesses and nurture that environment so that those businesses can grow. Cities that invest in people should see entrepreneurial benefits.

About the Authors:

Josh Russell is a research assistant at the Ewing Marion Kauffman Foundation.

 

 

Jason Wiens is Policy Director at the Ewing Marion Kauffman Foundation.

Ensuring All Veterans Have Safe Housing Requires All Hands on Deck

In recent years, dramatic progress has been made across the nation in the effort to reduce Veteran homelessness thanks to strategic planning, bold leadership, and unprecedented community collaboration. These elements are being paired with data-driven strategies that have resulted in a nationwide decline of 33 percent since 2010. This progress is paving the way for success in other sub-groups of the homeless population.

While headway on Veteran homelessness is notable by itself, the efforts also offer insight about how city leaders can ensure all Veterans have a safe place to call home.

Members of Team Depot build a community garden in Los Angeles. Philanthropies such as The Home Depot Foundation are increasingly important partners as cities aim to address multiple challenges. (photo: Elijah Harig-Blaine)

The Anatomy of Success: Strategic Planning

Beginning in 2010, the federal government’s response to homelessness became guided by the Opening Doors strategic plan. For the first time, the plan broke the nation’s work on homelessness into specific sub-populations. The first sub-population was Veterans. Bringing focus to a specific sub-population is one approach to make progress on municipal challenges.

Another way to make progress, is by bringing focus to a specific issue. In nearly every city across the country, access to safe, affordable housing is a challenge. This year’s State of the Cities report found housing as one of the top ten issues receiving significant coverage in mayoral addresses.

Like homelessness, progress on addressing housing overall can be made with a focus on Veterans. Realizing this progress comes when cities use the dual lenses of Veterans and housing to guide how existing programs and municipal networks are utilized.

Bold Leadership & Community Collaboration

In Los Angeles, Mayor Eric Garcetti used his State of the Cities address to announce that in the past year, the city had decreased Veteran homelessness by 50%. Across the city and county of Los Angeles, community stakeholders have housed 6,538 Veterans since June 2014.

To continue this progress, access to housing is key. A first step taken by city leaders and federal partners is to engage property owners and managers of existing market-rate housing. In June, Secretary of Veterans Affairs, Bob McDonald joined the Mayor and others in calling on landlords to join local efforts.

In addition to increasing access to existing market-rate housing, there is the need to increase the supply of affordable housing and preserve existing affordable housing. To support these goals, the Mayor Garcetti has proposed an additional $10 million for the city’s Affordable Housing Trust Fund (AHTF). Recognizing the need to tie the emerging sharing economy to the pragmatic needs of residents with lower-incomes, the Mayor proposed generating $5 million for the AHTF from taxes collected for the first time from Airbnb.

These resources are particularly needed in the face of past and proposed cuts to the Community Development Block Grant (CDBG) and the HOME Investment Partnerships program (HOME). In addition to program cuts, the demand for affordable housing is exacerbated as the affordability restrictions on thousands of housing units are ending. In the next five years, in California alone, at least 1,380 properties will have a subsidy expire, impacting the affordability of at least 100,181 units of housing.

To meet these challenges, cities are increasingly building collaborative partnerships beyond their existing relationships with non-profits and the federal and state government. Recognizing the unique role foundations can play in bridging the gap in services, cities are turning to the philanthropic sector to help meet the housing needs of Veterans.

Using Data to Drive Decision-Making

Tragically, Veterans are over-represented among the homeless.

Nationwide, Veterans comprise 8.1 percent of the general population. However, with the homeless population, 8.6 percent are Veterans. This over-representation is particularly seen in the unsheltered homeless population, where 10 percent are Veterans. In Los Angeles city and county, these numbers are even starker. Veterans comprise only 3.6 percent of the overall population, but are 10.8 percent of the overall homeless population and 11.3 percent of the unsheltered homeless population.

In addition to being over-represented in the homeless population, the percentage of Veterans who are seniors is significantly greater than the general population. Nationwide, 47.3 percent of Veterans are over the age of 65, compared to 15.9 percent of non-Veterans. In Los Angeles city and county, the numbers are again striking. In Los Angeles city and county, 53.2 percent of Veterans are over the age of 65, compared to 13.6 percent of non-Veterans.

These facts show that by using the lenses of housing and Veterans, city officials and their partners can not only make progress in these areas, but also position the community to better address the housing needs of other sub-populations, such as seniors.

One illustration of a housing development at this intersection is the Guy Gabaldon project. Developed by the East Los Angeles Community Corporation (ELACC), the 33 unit facility is operated by New Directions for Veterans and exclusively serves Veterans aged 55 and older.

Finished in September 2014, the project was fully leased in less than three months as a result of being part of Los Angeles’ coordinated entry system developed as part of the Home for Good campaign. Staff from the U.S. Department of Veterans Affairs work with New Directions to provide on-site supportive services to clients. Amenities include a community garden, a community room with gym equipment and on-site laundry facilities. All units are furnished and as they moved in, Veterans were provided a “move-in” kit with paper products, toiletries and other essentials.

To allow the units to be affordable for homeless senior Veterans, ELACC used Los Angeles’ AHTF, Low Income Housing Tax Credits (LIHTCs) as well as project-based HUD-VASH vouchers. Additional funding came from the Federal Reserve’s Affordable Housing Program (AHP) and The Home Depot Foundation. Similar support for housing developments serving Veterans from The Home Depot Foundation has helped cities build or preserve more than 17,000 units of housing. Over the past three years, the Foundation has invested more than $90 million in projects supporting Veterans and their families.

In addition, volunteer groups of Home Depot associates known as Team Depots have worked on more than 3,780 projects building or improving homes for Veterans. Just in California, The Home Depot Foundation has supported 622 projects impacting 2,520 units of housing benefitting Veterans with either financial or volunteer support.

While the role of philanthropies is critical, in the face of declining resources for affordable housing, cities are increasingly making systems changes to use the funds more efficiently. In 2013, Los Angeles began developing a “managed pipeline” to guide the distribution of LIHTCs, as well as support the coordination of allocations from the various state programs.

The “managed pipeline” has evolved to support 24 projects every 24 months. Every six months, six projects are moved forward and six new projects enter the pipeline. The result has been more certainty for developers, providing them the confidence to move forward with pre-development outlays and stronger applications for additional support from financial institutions, philanthropies, housing authorities and others. By initially focusing on the housing needs of homeless Veterans and gradually expanding the community coordination efforts to ensure all Veterans have access safe housing solutions, cities lay the groundwork for all community members to be housed.

Despite consistently encouraging news about the growth of city workforces, it is likely that support for affordable housing programs will continue to face fiscal constraints. For cities to create and grow relationships with committed philanthropic partners, local leaders must be strategic in how existing resources are used. Focusing on a specific population, such as Veterans, and a specific issue, such as housing, is one way cities can help ensure meaningful investments benefit all community members in the long-term.

Elisha_blogAbout the Author: Elisha Harig-Blaine is the Principal Associate for Housing (Veterans and Special Needs) at NLC. Follow Elisha on Twitter at @HarigBlaine.

REAL Talk to REAL Action: Undoing Racism in America’s Cities

NLC held its second REAL (Race, Equity And Leadership) event at the Newseum in Washington, D.C. on August 25. Undoing Racism in America’s Cities and Towns explored how city leaders are advancing racial understanding and healing within communities across the nation. (photo: Tim Mudd)

For most people, race is a difficult topic to discuss. The very mention of race can spark a myriad of emotions ranging from denial, guilt, anger and frustration to hopelessness. The discomfort or unease associated with these emotions can lead people to respond in different ways. Some choose to avoid conversations about race entirely, whereas others refuse to shy away from the conversation and speak out boldly and confidently about issues of race and injustice. Others are willing to have a dialogue about race but feel more comfortable limiting their interactions to members of their same race instead of reaching out across cultures. And then there are others who, according to according to Gary, Ind., Mayor Karen Freeman-Wilson, muster up the “keyboard courage” to post their comments on social media and engage in conversations from behind their computer screen but refuse to have the conversation in public.

As a result, it can be difficult for local elected officials to figure out how best to facilitate racial understanding and healing in their communities.

Overwhelmingly, the panelists at the National League of Cities’ (NLC) REAL Talk series Undoing Racism in America’s Cities and Towns reiterated the idea that, if we are going to create a more equitable society, we have to have this conversation no matter how difficult it may seem. The panel, which included Gary, Ind., Mayor Karen Freeman-Wilson, Cleveland Councilmember and NLC 2nd Vice President Matt Zone, and Tim Wise, anti-racism activist and author of the memoir White Like Me: Reflections on Race from a Privileged Son, challenged city leaders to confront issues of race, racism and racial equity.

This is especially poignant for me given my experience with NLC’s Learning Collaborative on Health Disparities. In working with the collaborative, I have had the opportunity to witness firsthand just how difficult it can be for local elected officials, their staff, and their community partners to talk about race. Cities participating in the Collaborative were challenged to think critically about the root causes of health disparities in their city. It’s nearly impossible to have these conversations in a meaningful way without examining the impact of historical, systemic and structural racism on the unequal distribution of quality schools, affordable housing, employment opportunities, access to healthy, affordable foods, and safe spaces to engage in physical activity. In some cases, candid discussions about race, disparities and equity have been hampered by feelings of discomfort. For example, one city leader shared that, as a white male, he often feels uncomfortable speaking about race and that his fear of “saying the wrong thing” prevents him from actively engaging in these conversations.

While the REAL Talk panelists acknowledged the difficulty of these conversations, they refused to accept that as an excuse for not moving forward, issuing a call to action to city leaders to be bold in helping move people past their discomfort and create meaningful conversations. To that end, the panelists outlined concrete actions that city leaders can take to advance racial understanding and create more equitable communities.

  • Start Early, Start Young — “Individual attitudes are passed down from generation to generation. So as I talk about this conversation locally and as I talk about it in other places, it’s really to challenge how we are training, how we are teaching, and how we are challenging our children because we get a lot of things from our parents…some parents are passing down hatred [and a] belief in inferiority that certain races, certain genders, certain people are less than [which] that informs everything they do and how they relate to people not like them,” said Mayor Freeman-Wilson. City leaders can work with parents, caregivers, teachers, faith leaders, and other early education stakeholders to educate young children about the importance of diversity, inclusion, and tolerance.
  • Review Current Practices, Procedures, and Policies City leaders can apply a racial equity lens to their policies, programs, initiatives and budgets to identify intentional and unintentional consequences. Effective data collection and statistical analysis is a critical component of this review process.
  • Engage the Community — “These are conversations we need to have not only in city hall but in the community,” said Matt Zone. “Being a convener is a tremendous opportunity that local government leaders have. To convene people in a way that allows them to feel equal and that their opinions matter is critical for moving this conversation forward.” City leaders can create a safe space for the community to share their lived experiences, clarify their needs, and participate in the decision making process on an ongoing basis.
  • Call out Racism — “We have to be willing to acknowledge that [racism] exists and be willing to talk about it” said Mayor Freeman-Wilson. Local elected officials are uniquely positioned to leverage their position and visibility to speak out against racism, injustice and inequality. “Our first role is to understand and to take the time, just like [we take the time] to understand the budget, crime rate, and all of the other important statistics. Once [we] understand those dynamics then we can do something about it.”
  • Expand the Conversation — “If you are going to understand the events that happened in Baltimore six months ago you can’t start with Freddie Gray and you cannot start even with the police department in Baltimore… We talk about housing and education and we talk about neighborhoods as if they are not racism,” said Tim Wise. Conversations about race and race relations should not be limited to discussions about police brutality. Throughout the forum, the panelists reiterated that we have to analyze the systemic and structural violence and inequities occurring across a broad range of sectors including education, transportation and health that impact the quality of life of individuals living in cities and towns.

In just the last year, tragic events in cities across the country have highlighted just how difficult it is to talk about race — but they have also highlighted the urgent need to have these conversations. According to Tim Wise, “If you own your piece of it, it’s easier to get others to own theirs.” As I reflect on my work with the Learning Collaborative on Health Disparities, I am encouraged by the passion and commitment of city leaders to address inequities and build more equitable, inclusive communities. NLC’s Race, Equity And Leadership initiative is uniquely positioned to provide NLC staff and local elected officials the tools, techniques and resources to prepare them to advance the conversation and translate these important conversations into action.

Alyia Head ShotAbout the Author: Alyia Smith-Parker is a Senior Associate for Health and Community Wellness at NLC’s Institute for Youth, Education, and Families. Contact Alyia at smith-parker@nlc.org.

Incentivizing Entrepreneurship: Insights from Chattanooga

This is a recap from Big Ideas for Small Business, NLC’s national peer network helping local governments accelerate effort to support small businesses and encourage entrepreneurship. To learn more, email robbins@nlc.org.

Half a century ago, the city of Chattanooga’s reputation was more closely tied to pollution than to innovation. Now, after significant focus on building a strong startup scene since 2010, the city is rated one of the best locations to start a business and a top small city for young entrepreneurs. Chattanooga’s approach to cultivating a new ecosystem provides useful insight into how cities can incentivize entrepreneurship by investing in infrastructure and housing, coupled with strong political leadership.

Chattanooga, TN

Chattanooga’s grassroots entrepreneurial ecosystem has grown exponentially during the last five years. (photo: The Enterprise Center)

Ken Hays, President and CEO of The Enterprise Center, joined a conversation with NLC’s Big ideas for Small Business network to discuss the city’s transformation, particularly about how the city’s grassroots ecosystem has grown exponentially during the last five years. Below are the key takeaways from the conversation and recent news about Chattanooga.

Invest in the city’s technical and physical infrastructure. A turning point for Chattanooga was the launch of the municipally-owned fiber internet network — often referred to as “the gig” — that delivers high-speed broadband internet access to businesses and residents. Access to internet speeds that are about 200 times faster than average attracts new startups to the area, particularly tech-based businesses. A new GIGTANK accelerator program caters exclusively to these new startups that are “developing ultra high-bandwidth business applications” that can take advantage of the gig’s lightning speed connection.

The city’s plans for a new, 140-acre downtown innovation district will also expand the startup community by providing the physical space for incubating new businesses, mentorship exchanges, and other avenues for collaboration and connectivity between new business ventures. (More information from the Brookings Institution and NLC’s Brooks Rainwater on innovation districts is here).

Leverage community infrastructure, too. Local non-profits and foundations are a critical thread in the fabric of the startup ecosystem in Chattanooga. The Enterprise Center serves as an umbrella organization for knitting together the public, private, education and non-profit players who all play an important role in supporting the local startup scene. Case in point, several years ago, the Lyndhurst Foundation in Chattanooga granted new startups with funding needed to relocate to the city as part of the Innovate Here initiative.

Employees need an affordable and exciting place to live. Chattanooga knows that attracting entrepreneurs isn’t just about providing office space, it also requires offering a good quality of life, and affordable housing options. The city plans to develop new downtown housing, and a local venture capital firm is backing the creation of a new micro-housing building called the Tomorrow Building. The innovation district plan also integrates a holistic approach to building up a neighborhood with restaurants, coffee shops, and transportation options.

Political leadership is the most important catalyst.  It certainly takes a village to incentivizing entrepreneurship, but having the political support from the mayor has accelerated Chattanooga’s transformation. As an early adopter of economic development initiatives like Startup in a Day and TechHire, Mayor Andy Berke is on a mission to make his city a magnet for new businesses, both small mom-and-pop shops and larger startup venures. A successful initiative from his first term is the Growing Small Business Incentive, which provides local small businesses with $500 per new employee hired within a 12-month period. As many in the city will attest, the support and coordination from the mayor catalyzed Chattanooga’s emergence onto the entrepeneurial scene.

About The Enterprise Center: The Enterprise Center is establishing Chattanooga as a hub of innovation, improving people’s lives by leveraging the city’s digital technology to create, demonstrate, test, and apply solutions for the 21st century.

Robbins_small (2)About the author: Emily Robbins is the Senior Associate of Finance and Economic Development at NLC. Follow Emily on Twitter: @robbins617.

This New Website Makes Accessing Public Pension Data Easier Than Ever

This is a guest post by Amber Snowden.

State and local governments face ongoing fiscal challenges resulting from high levels of unemployment, still recovering housing values, decreased or flat commercial activity, and increased demands on social services. Exacerbating these budget shortfalls, public pensions have not yet returned to their pre-recession funding levels.

Public sector employers recognize that retirement benefits are necessary to attract and retain talented workers. However, despite some improvements in economic conditions, state and local governments continue to seek strategies to balance their budgets while also meeting commitments to employees for a secure retirement following a career in public service.

Access to reliable, current and easily accessible public pension data helps state and local government elected officials, managers and financial officers make informed decisions about budget and retirement issues.

To support public employers in their financial planning and to strengthen retirement security for state and local government workers, the Center for State and Local Government Excellence (SLGE), in partnership with the Center for Retirement Research at Boston College (CRR) and the National Association of State Retirement Administrators (NASRA) has recently released an enhanced version of Public Plans Data (PPD) – the most comprehensive, up-to-date database of public retirement plans. PPD provides users with easily retrievable data on fiscal health, plan governance, employer and employee contribution rates, retirement benefits, investment allocations, income and fees, plan membership, and plan provisions.

PPD’s financial, actuarial, and governance data on state and local public pension plans is available at no cost to policy makers, researchers, the media, and the public. The capabilities and accessibility of the PPD help local government officials improve decision-making, transparency and communications about their pension plan and allow for comparisons of individual plans to both national averages and to other individual plans.

PPD’s data is primarily obtained from Comprehensive Annual Financial Reports, actuarial valuations, and other related financial documents as they are released, as well as regular surveys of plan administrators.  When possible, the PPD data sets are verified through communications with the individual pension systems. NASRA, which has been collecting and sharing public pension plan data since 2001, provides review and assistance on the development of data models, validation of data, and development and administration of surveys.

Key Features of Public Plans Data include:

  • Data on more than 150 state and local pension plans;
  • “Quick Facts” — graphs which include explanations on various aspects of pension plans — at the national, state, and local levels;
  • Interactive data browser – allowing users to customize data sets on selected variables – available for download;
  • Downloadable Comprehensive Annual Financial Reports (CAFRs) and Actuarial Valuations (AVs) for every plan included in the database;
  • An application programming interface (API) which allows users to connect directly to the PPD database and automatically receive updates as they are made.

Learn more at publicplansdata.org and connect with PPD on Twitter @PublicPlansData

About the Author: Amber Snowden is the communications and project manager for the Center for State and Local Government Excellence. In this role, she coordinates projects for SLGE, including interactions with senior researchers, state and local government leaders, and others who share the Center’s goal to position state and local governments as employers of choice. She also serves as the public policy coordinator for ICMA and serves as staff liaison to ICMA’s Strategic Planning Task Force.

Is Your City Ready for an Innovation Economy? How Do You Know?

This is a guest post by Dr. David Ricketts.

Designed to enable cities to be innovation leaders in the future, the 2015 Strategic Innovation Summit: Enabling Economies for the Future will take place at Harvard University in Cambridge, Mass. (coleong/Getty Images)

In a global world, simply providing the basic necessities, including education, infrastructure and resources is not enough. To lead in the next generation, cities need to enable — and drive — innovation in their communities that will provide creative solutions to urban problems that improve the quality of life and economic opportunities of their citizens.

But how? With limited resources and a constantly changing world, how does a city or any community know where to put their resources to make the biggest impact?

In September, a group of senior city leaders, education and industrial experts, and innovators will be meeting at Harvard University in Cambridge, Mass., to discuss this challenge. The 2015 Summit on Enabling Innovation Economies for the Future asks: What makes cities future ready? What is needed and what must leaders measure, track and change to enable their cities to be innovation leaders in the future?

The Summit will provide a working group to answer these and other questions about the future of our cities, such as:

  • What resources are needed to seed and foster innovation?
  • What cultural and societal programs impact the readiness of a city’s workforce?
  • How does our education system need to change to prepare future innovators?
  • What economic programs support entrepreneurship and grass roots innovation?

Additionally, how do you evaluate your current state and develop a plan to make your community an innovation leader for the future? The Summit will investigate and develop strategic plans to help city leaders:

  • benchmark, measure and track their progress in becoming a future ready city;
  • establish an innovation leadership focus within their community;
  • engage the community in partnership;
  • grow services and infrastructure to support technology innovation; and
  • launch creative initiatives to drive an innovation economy.

This Summit is an invitation-only program for senior-most executives in the public sector, technology and start-up communities, and higher education. It is convened on the weekend of Sat. Sept 26 & 27 on the campus of Harvard University. We encourage those of you engaged in leading the strategic plan for your city – whether in government, education or industry — to join the conversation and apply to the Summit.

The Summit is hosted by the Technology and Entrepreneurship Center in the Paulson School of Engineering and Applied Science, Harvard University. The Summit is complimentary and there is no tuition fee to attend. However, travel and hotel expenses are the responsibility of individual participants. Please see the Summit site for more details and how to apply.

About the Author: Prof. David Ricketts is the General Chair of the Strategic Innovation Summit and a Faculty Associate in the Technology and Entrepreneurship Center in the Paulson School of Engineering and Applied Science at Harvard University. He teaches innovation and creativity and his research focuses on the role of the individual in innovation and discovery.

Three Ways Your City Can Prosper by Embracing Equity

This is a guest post by Sarah Treuhaft. This post is the third installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Participants in the SySTEMic Solutions program in Fairfax County make a presentation on robotics. As part of an overall strategic plan for economic growth, cities can create programs like this one, in partnership with universities and area businesses, to funnel students into STEM-related professions. (photo: Northern Virginia Community College)

NLC’s 2015 survey of local economic conditions paints a clear picture of unequal growth in America’s cities, underscoring the need for bold, focused strategies to firmly link low-income communities and communities of color with regional (and global) economic opportunities.

Two years ago, New York City mayor Bill DeBlasio captivated voters with his “tale of two cities” narrative summarizing the dynamics of rising inequality in America’s largest metropolis. NLC’s 2015 survey of chief elected officials reveals how uneven growth is not isolated to high-tech boomtowns, but widespread among the nation’s cities.

The survey illustrates the challenge of poverty amidst plenty: While 92 percent of city mayors said economic conditions improved in the past year, 50 percent reported an increase in demand for survival services like food and shelter, 36 percent saw an increase in homelessness, and 24 percent reported a decrease in housing affordability.

Urban economies are coming back, but the rising economic tide is not translating into good jobs, rising wages, and ownership opportunities for low-income residents and communities of color. Our analyses of the Bay Area and Fairfax County, Va., revealed the persistence of racial inequities in these booming economies. A new report on New Orleans finds that although the region has “staged an unlikely economic comeback,” 41 percent of families are struggling to get by on less than a living wage — up from 35 percent in 2006 — and those families are disproportionately made up of women and people of color. And Alan Mallach’s research on older industrial cities shows how growth is isolated to a few high-density, walkable neighborhoods while income, wealth, and home values are stagnant or declining everywhere else, with African American communities losing the most ground.

Unequal growth is socially and economically unsustainable. Research shows that more equitable regions experience stronger and longer-lasting growth. Demographic changes are also magnifying the costs of racial economic exclusion and upping the value proposition of inclusion. As Baby Boomers retire, their jobs will need to be filled by a much more diverse generation.

Small business owners Al and Marie Pronko benefitted from a $10,000 cash award as part of Detroit's NEIdeas program, which helps local businesses as part of a larger strategy to spur economic growth in the city. (photo: NEIdeasDetroit.org)

Small business owners Al and Marie Pronko benefitted from a $10,000 cash award as part of Detroit’s NEIdeas program, which helps local businesses as part of a larger strategy to spur economic growth in the city. (photo: NEIdeasDetroit.org)

In the face of these trends, cities should embrace equity as their path to prosperity and take steps to foster inclusive growth: growing new jobs and new businesses while ensuring that low-income people and people of color fully participate in generating that growth and fully share in its benefits. Here are three ways forward:

Bake racial economic inclusion into growth strategies.

Getting to equitable growth requires an intentional and strategic focus on removing barriers and building pathways for struggling workers and entrepreneurs to connect to jobs and business opportunities. Many cities are tackling this challenge and implementing new approaches to fuse growth and opportunity. Portland’s economic development agency just launched an Inclusive Startup Fund to provide capital, mentoring, and business advising to startups founded by underrepresented groups. Recognizing the importance of neighborhood businesses to Detroit’s renaissance, the New Economy Initiative held NEIdeas contests in 2014 and 2015 to provide financial and technical support to help neighborhood businesses grow. And in Pittsburgh, Urban Innovation 21 is connecting the city’s low-income African American communities with its knowledge-economy revival by placing youth in internships at area tech companies, supporting local entrepreneurs, and running a new Citizen Science Lab that offers hands-on life sciences trainings.

Implement a homegrown talent development plan.

City leaders recognize that workforce preparedness is central to their economic success, but often focus on attracting young, mobile, college grads from other states. To shift to equitable growth, cities need to cultivate their homegrown talent. Universal pre-K is a winning strategy and San Antonio’s groundbreaking program is already showing results for low-income, predominantly-Latino four-year olds. “Cradle-to-career” partnerships like Promise Neighborhoods are working to ensure children in low-income neighborhoods have the educational, health, and community supports they need to succeed. NLC’s survey reveals there is a great deal of room for cities to adopt targeted and sectoral workforce development strategies. One promising effort is New Orleans’s Economic Opportunity Strategy, which aims to recruit, train, and connect many of the city’s 35,000 jobless black men with jobs coming online at its major anchor institutions. Cities can also unleash talent by knocking down hurdles to employment. Passing “ban the box” policies that remove questions about prior convictions from job applications and creating municipal ID cards that help immigrants access financial and other services are key strategies.

Leverage public spending, investment, and planning as a force for inclusive growth.

While cities do not control all of the policy levers needed to move toward equitable growth, they can leverage their land use planning and zoning powers, procurement, and infrastructure investments to connect unemployed and underemployed residents to good jobs and transform disinvested neighborhoods into resilient “communities of opportunity.” The upturn in market activity presents cities with opportunities to implement classic equitable development tools — local hiring, community benefits agreements, permanently affordable housing, living wages, etc. — to ensure long-term residents benefit from publicly-subsidized development and can stay in their neighborhoods as they improve. Cities must also innovate new tools — like San Francisco’s new Retail Workers Bill of Rights — to turn low-wage jobs into jobs that support strong families and strong communities.

Now is the time for cities to lead on inclusive growth. Please join us at the 2015 Equity Summit October 27-29 in Los Angeles to explore these and other strategies for building “All-In Cities,” and sign up for our newsletter for regular stories about what works for equitable growth.

About the Author: Sarah Treuhaft is Director of Equitable Growth Initiatives at PolicyLink. She leads the organization’s work to advance racial and economic inclusion as an economic imperative and coordinates the development of the National Equity Atlas. You can connect with Sarah on Twitter @streuhaft.

How LinkedIn Can Help Your City Match Jobs with Trained Workers

This is a guest post by Nicole Isaac. This post is the second installment in a series focused on NLC’s 2015 Cities and Unequal Recovery report, which highlights the findings of our 2015 Local Economic Conditions survey.

Skilled workers, like this engineer maintaining the gas turbine of a power plant generator, are in high demand - but cities need more effective ways of connecting with them. (Getty Images)

Skilled workers, like this engineer maintaining the gas turbine of a power plant generator, are in high demand – but cities need more effective ways of connecting with them. (Getty Images)

While some contend that the United States economy may be impacted by a skills gap, at minimum, researchers have found that there is a skills mismatch between the available jobs and the majority of the trained workforce to fill these jobs.

According to a recent McKinsey Global Institute report, in countries around the world, 30 to 45 percent of the working-age population is unemployed, inactive in the workforce, or working only part-time. In the United States, the United Kingdom, Germany, Japan, India, Brazil and China, this equates to 850 million people. In the United States alone, there are approximately 20 million people who are unemployed, underemployed, or marginally attached to the workforce, yet there are 5.4 million available jobs just waiting to be filled by people with the right skills.

We’re seeing these skills mismatch trends across American cities today. For example, the National League of Cities’ Cities and Unequal Recovery report suggests that the “skills gap” is the most common concern facing local economies, with 21 percent of cities reporting an increase in the gap over the past year, and exacerbated by the lack of coordination across leading partners for the respective components of workforce development.

This is a real challenge – and, given the number of available jobs and a recovering economy, a significant opportunity for cities across the country. As the report notes, “cities are rising to the challenge and embracing the opportunity by creating collaborative, systemic workforce development approaches to not only improve the local talent pipeline, but also to open communications with employers about assessing needs and improving hiring practices.”

Working with local, state, and international levels to address the challenges around skills, both in supply and demand, is strongly aligned with LinkedIn’s vision to create economic opportunity for every member of the global workforce. We work towards this objective each and every day through partnerships with cities to address workforce issues with LinkedIn’s technology and insights from our Economic Graph. We know firsthand that online connectivity allows for faster, better job matching; smarter labor and educational policy making; more efficient hiring and skills assessments at companies; and overall economic improvement in developed and emerging countries.

That is why, in February, we worked on New York City’s Tech Talent Pipeline program, a $10 million initiative meant to train New Yorkers for high-tech jobs. Together, we analyzed aggregate LinkedIn data from more than three million LinkedIn members in the New York City region and 150,000 NYC-based businesses to provide Tech Talent Pipeline with insights on the current state of the city’s tech industry. Using the data, the city can determine how to strategically invest their resources to create the greatest economic impact.

In June, we announced a partnership with the Markle Foundation called Rework America Connected. This partnership will provide an online destination that connects every sector of the labor force within Colorado and Phoenix, leveraging the job seeking and skills matching capabilities of LinkedIn. Through greater transparency among employers, educators, and job seekers, we’re aiming to create greater economic opportunity for the middle-skilled workers of Colorado and Phoenix.

We’ve been working with the National League of Cities and local governments and other stakeholders to identify and support workforce strategies for the jobs of today and tomorrow. Specifically, three of the cities recognized by the NLC – Philadelphia, Salt Lake City, and Nashville – were recently highlighted as part of the TechHire initiative for their focus on training workers for today’s in-demand tech jobs. LinkedIn is partnering with Philadelphia employers, city officials and non- profits to assist with skills alignment in the city. In Nashville, we are working with the Nashville Technology Council to better prepare their curriculum with business needs. Finally, in Salt Lake City, we have been working with the local economic development teams on providing individuals with access in-demand jobs.

Our overall goal in working with cities is to provide individuals with greater economic opportunity, and we’re planning to take the lessons learned from these current initiatives and apply them more broadly in other cities and regions. These public private partnership models are one mechanism by which cities can utilize innovative approaches to age-old problems– through creating more efficient data-sharing models and leveraging the resources of private sector partners to impact communities now.

About the Author: Nicole Isaac is the Head of Economic Graph Policy Partnerships at LinkedIn.

NLC Focuses on Early Primary States for 2016 Presidential Elections Task Force

This is a guest post by Emma Lieberth.

Senator Bernie Sanders speaks to the crowd at the Iowa State Fair. The former mayor of Burlington, Vt., Sanders is one of four former mayors running for president.

Senator Bernie Sanders speaks to the crowd at the Iowa State Fair. The former mayor of Burlington, Vt., is one of four former mayors running for president.

The author, with (clockwise, from top left) 2016 presidential candidates Rick Santorum, George Pataki, Hillary Clinton and Ben Carson at the Iowa State Fair.

The author, with (clockwise, from top left) 2016 presidential candidates Rick Santorum, George Pataki, Hillary Clinton and Ben Carson at the Iowa State Fair.

The Iowa State Fair has become a rite of passage for candidates on both sides of the political isle vying for the highest office in the land. Presidential stump speeches on the fairgrounds are as popular of an attraction as the food on a stick and famous butter cow. Over the course of three hot and humid days, I took part in the festivities on behalf of the members of the National League of Cities (NLC). On the road to 2016 and beyond, we’re determined to make sure the concerns of local officials and the communities they serve are addressed by the candidates.

“Local officials in Iowa have more access to Presidential candidates than any other state in the country,” said Alan Kemp, Executive Director of the Iowa League of Cities. “The issues that NLC fights for are not partisan issues. These are important issues that matter to local governments across the country. It’s important for the 2016 candidates to hear from us.”

Several candidates took turns speaking at the Des Moines Register Soapbox while others just stopped by to visit with caucus-goers. The candidates largely spoke about their plans for healthcare, views on Planned Parenthood, immigration and threats to national security; and while these are critical issues that need to be addressed, I didn’t hear much about what their plans are here at home surrounding economic development, the country’s infrastructure and ways to improve public safety. In the recent 2015 State of the Cities Report released by NLC, economic development was the most commonly addressed topic in mayoral speeches followed by infrastructure and public safety.

Iowa State Fair attendees cast their votes with corn kernels.

Iowa State Fair attendees cast their votes with corn kernels.

As we get into the race for President, NLC is dedicated to being the voice for city leaders and bringing the conversation around local issues to the forefront of the 2016 race and reminding the next administration about the issues local officials face daily.

In March 2015, NLC President Ralph Becker, mayor, Salt Lake City, Utah, named a bipartisan group of 17 city officials and state municipal league executive directors to serve on the NLC 2016 Presidential Election Task Force. The goal of the task force is to raise the visibility of city issues during the presidential election cycle, the task force will develop an actionable plan that includes tools and resources for NLC members to engage candidates on city issues.

Representing the National League of Cities at the Iowa State Fair.

Representing the National League of Cities at the Iowa State Fair.

Next month, we will be releasing our platform on issues critical to local governments. NLC wants to be a resource for the every campaign on issues surrounding local governments and will be reminding the candidates of their importance. We encourage local officials around the country to join us – let’s speak up and let our voices be heard.

About the Author: Emma Lieberth is the Program Manager for Strategic Partnerships at the National League of Cities. Follow her on Twitter @emmalieberth.

Affirmative Action at UT Austin: Why Cities Should Take Note

The Supreme Court has decided relatively few affirmative action decisions, such as this case involving the University of Texas at Austin (pictured above) – so all are of interest to state and local governments that use race as a factor in decision-making. (Gregg Mack/Getty Images)

If you were going to bet on the outcome of a Supreme Court case — much less the Court’s reasoning — you should avoid the Fisher case. It’s anyone’s best guess.

For the second time the Supreme Court has agreed to decide whether the University of Texas at Austin’s race-conscious admissions policy is unconstitutional in Fisher v. University of Texas at Austin.

Per Texas’s Top Ten Percent Plan, the top ten percent of Texas high school graduates are automatically admitted to UT Austin, which fills about 80 percent of the class. Unless an applicant has an “exceptionally high Academic Index,” he or she will be evaluated through a holistic review where race is one of a number of factors.

UT Austin denied Abigail Fisher, a white Texan who did not graduate in the top ten percent of her class, admission. She sued, claiming Austin’s use of race in admissions violates the Fourteenth Amendment’s Equal Protection Clause. She argued that using race in admissions is unnecessary because, in the year she applied, 21.5 percent of UT Austin admissions were minority students.

The Supreme Court has held that the use of race in college admissions is constitutional if race is used to further the compelling government interest of diversity and is narrowly tailored. In Fisher I the Court held that the Fifth Circuit, which upheld UT Austin’s admissions policy, should not defer to UT Austin’s argument that its use of race is narrowly tailored.

When the Fifth Circuit looked once again at UT Austin’s affirmative action plan, it concluded that it is narrowly tailored. The Top Ten Percent Plan works well at increasing minority student enrollment because Texas schools are so segregated. But a number of well-qualified students are excluded — specifically, minority students who performed well at majority-white schools but weren’t in the top ten percent of their class. If race wasn’t considered during holistic review, almost every student admitted would be white because of the test score gap between white and minority students. And as a result of holistic review, a much higher percent of white students are admitted — but generally between 25-30 percent of the overall number of black and Hispanic students are admitted through holistic review.

A dissenting judge questioned much of the majority opinion, fundamentally arguing that while UT Austin claimed it is trying to achieve a “critical mass” of diverse students, its definition of “critical mass” is unknown, immeasurable, and unclear. So it is impossible to know whether UT Austin’s use of race is narrowly tailored to meet this goal. While the dissent said that “critical mass” isn’t a number, it questioned whether the number of black and Hispanic students admitted through holistic review — 216 out of 6,322 — is large enough to contribute to UT Austin’s critical mass objective. The dissent also questioned the merits of assuming that minority students admitted via the Top Ten Percent Plan are “somehow more homogenous, less dynamic and more undesirably stereotypical than those admitted under holistic review.”

Why did the Court take this case yet again (especially considering Abigail Fisher graduated from another university years ago, Justice Kagan will recuse herself again, etc.), and what will it say? The possibilities are endless, but cities should monitor this case nonetheless. Lyle Denniston discusses a few possible outcomes on SCOTUSblog.

Lisa Soronen bio photoAbout the Author: Lisa Soronen is the Executive Director of the State and Local Legal Center and a regular contributor to CitiesSpeak.