Does the Maker Movement Hold the Key to Economic Growth?

The power of this movement is its ability to draw production back into cities. This can have profound economic and social benefits.

MakerspaceA man builds a 3D printer at a makerspace. (Getty)

This is an excerpt from NLC’s upcoming report, The Maker Movement. The report was created in partnership with the Department of Public Administration and Policy at American University.

If you’ve visited Pittsburgh lately, you might have noticed companies like Google and TechShop have setup outposts in the city’s developing urban core. Drawing on the prowess of the robotics engineering programs at the University of Pittsburgh and Carnegie Melon, the city has found a new calling, becoming one of the most encouraging spots for innovation in the country, and the so-called maker movement.

These economic investments in startups, makerspaces and the technology sector are resulting in real dividends for the city. Revenue from economic growth has translated into protected bike lanes, open spaces and parks, and events – projects aimed at making the city a place people want to stay and lead active lives.

From Rust Belt cities like Pittsburgh to rugged outdoors towns like Burlington, Vermont, the maker movement is providing localities a framework for unlocking growth and engaging citizens. With the growth of the movement, which views the producer as the consumer, co-location of manufacturing, engineering and design is common – a process that is transforming our city landscapes.

And that’s the power of the movement: its ability to draw production back into the cities where consumption occurs. This can have profound economic and social benefits. In addition to added jobs, proximity means more innovative potential for workers. The untapped skills and knowledge of out-of-work producers become part of the creative economy of the city.

But, what is the maker movement, exactly?

In the 1990s and early 2000s, the United States’ technology and manufacturing industries experienced a significant transition. With the advent of the Internet, computers began shrinking in size and price, while global connections grew exponentially and economies became inextricably linked.

During this time, the U.S. began outsourcing much of its technological needs. However, the introduction of new technologies such as 3D printers and non-commercial droids spurred an interest in Do-It-Yourself (DIY) and Do-It-With-Others (DIWO) hobbies. Faster prototyping and the availability of fabrication tools as well as easier sourcing of parts and direct distribution of physical products online further contributed to the desire to grow community workspaces.

In this sense, the maker movement gained momentum from the increasing participation of all kinds of people in interconnected communities, defined by interests and skills. The increased predominance of makerspaces offers individuals a compelling social experience that is built around interpersonal relationships.

According to Atmel Corporation, the leading manufacturer of microcontrollers and touch technology semiconductors, and a major backer of the maker movement, there are an estimated 135 million U.S. adults who are makers. In 2013, Wired magazine reported that the overall market for 3D printing products and similar maker services reached $2.2 billion in 2012, a compounded annual growth rate of almost 29 percent when compared to the $1.7 billion the industry recorded in 2011. Projections are expected to reach $6 billion by 2017 and reach $8.4 billion by 2020.

Each region of the U.S. and each local community has a slightly varied understanding of what the actual maker movement is, and its definition is often affected by the unique economic environment of each locality. In many cities like Detroit, Pittsburgh and Philadelphia, the maker movement has emerged organically as former manufacturing cities look to diversify by incorporating innovative new technologies into their existing factories.

The transition away from generic, mass-produced, made-in-China merchandise and back to local industry seems to encourage entrepreneurs who are looking to share their ideas and innovations with other like-minded people, and build broad-based support for the maker movement.

Brooks Rainwater bio photoAbout the Author: Brooks Rainwater is the Director of the Center for City Solutions and Applied Research at the National League of Cities. Follow Brooks on Twitter at @BrooksRainwater.

How the City of Newark is Leading in Historic Preservation

The city of Newark, New Jersey, has a strategy for historic preservation, multi-sector partnership, and the creation of new residential mixed-use development in the heart of downtown.

Newark is demonstrating that, while simple economic arithmetic may dictate demolition and abandonment when it comes to older downtown structures, those willing to see beyond the next fiscal quarter tend to reap far greater rewards. (photo: Harry Prott/Newark CEDC)

Is historic preservation only the crusade of upwardly mobile, urbanist Whites with a longing for a bygone era, or is it the essential strategy for every city and town that thinks creatively about place, the built environment, and the long-term prosperity of residents? Although that was not the intended question that was up for debate at the Legacy City Preservation forum, a gathering of preservation experts and legacy city practitioners in Newark, New Jersey, that was a recurring theme.

The participants themselves, some long-serving historic preservation professionals and many avid volunteers working vigorously in cities, were a mix of men and women from assorted races and ethnicities. They were all highly vocal, highly engaged, highly motivated, highly educated (even without counting the number of Ph.D.’s in the room) and highly entrepreneurial. More than this, many of the stories about first-hand experiences in cities demonstrated the importance of acquiring a certain adeptness at working “the system” to secure desired goals. Those telling the stories also were skilled at pushing for systemic change to advance a broad-based agenda that supports many avenues for community revitalization.

In truth, I felt right at home! Although I’m not regularly creating networking groups for home improvement do-it-yourselfers (Brick + Beam Detroit) or residential micro-development companies (Buffalove Development), the work being done by these folks is the bone marrow of cities. This is from where community strength and resilience springs.

(photo courtesy L+M Development)

Construction workers labor to restore the core of the Hahne & Company department store in downtown Newark. (photo courtesy L+M Development)

The Newark forum was partly a celebration of the rehabilitation of the historic Hahne & Company department store building, a collaboration among the City of Newark, Rutgers University – Newark, L & M Development, and J. P. Morgan Chase. Together these partners, along with several others, are reactivating the former department store as a centerpiece of Newark’s recovering downtown. A similar coalition of partners have nearly completed renovation of the former American Insurance Company tower at 15 Washington Street where the day’s events took place. These are transformative projects in terms of historic preservation, multi-sector partnership, and the creation of new residential mixed-use in the heart of downtown.

(photo courtesy L+M Development)

An architect’s rendering of the soon-to-be-finished Hahne & Company department store restoration. (photo courtesy L+M Development)

Once the grande dame of the local retail industry, the Hahne’s building was abandoned and in a state of disrepair for the past 30 years. During a hardhat tour of the renovation ($174 million, 400,000 sq. ft.), the development team highlighted the future for the building. By December 2016, the mixed-use, mixed-income space will be open to the first residents. A total of 161 rental units, 60 percent market rate and 40 percent for low income residents (at 60 percent of area median income), will be ready. The retail floors, with anchor tenant Whole Foods, will open in March 2016. Rutgers University – Newark will house their Department of Arts, Culture, and Media there, which will include classrooms, artist studios and gallery space. Nearly every relevant tax credit opportunity was leveraged for this project – historic preservation, new markets, and low income housing. For the coup de grace, the great skylight – 4-stories above the central atrium – is being meticulously restored to its former glory.

For Rutgers University – Newark’s burgeoning campus, building preservation and reuse has been a religious calling. Moreover, the imagination and creativity that has gone into rethinking what a university campus is and ought to be is remarkable. University Chancellor Nancy Cantor spoke in almost lyrical terms about the future use of historic spaces both for students and residents. For her, and for many others in the room I suspect, the process of historic preservation has taken on poetic qualities. It is as if the buildings themselves, being returned to productive use, will not only stand more proudly but will instill in those who see and use the space a sense of achievement and hope, and fortify the community for the work ahead.

Heady stuff and quite a challenge for any individual much less a historic structure. After all, we are not talking about the Pyramids at Giza or the Parthenon. But, in effect, the point of the projects are to connect present needs with past capacity. This theme runs through the entire “Action Agenda for Historic Preservation in Legacy Cities” produced by the Preservation Rightsizing Network – an agenda for cities having considerably more infrastructure than needed for the smaller population base now present.

Some of the most interesting work in cities today is in those places at the center of headlines about depopulation, disinvestment, dilapidation, dysfunction, despair, and general disaster. But the headlines never tell the full story nor even the right story. The truth about legacy cities, or any city seeking growth for that matter, is that the social and civic infrastructure (government, residents, philanthropies, neighborhood associations, faith institutions, businesses and schools) are at the heart of setting a vision and implementing the plan to reach the goals.

In legacy cities, preservationists are taking full advantage of the assets they have available – 60 to 100 years of growth in the built environment that yielded homes, factories, shopping arcades, warehouses, transportation systems, public utilities, parks, schools, and neighborhood residents. Although simple economic arithmetic may dictate demolition and abandonment, those willing to see beyond the next fiscal quarter tend to reap far greater rewards. It is for this reason, for the creation of a more prosperous and distinctive place – a place that people want to live in or go to rather than drive through – that historic preservation needs to be an essential strategy for every city and town.

Brooks, J.A. 2010About the Author: James Brooks is NLC’s Director for City Solutions. He specializes in local practice areas related to housing, neighborhoods, infrastructure, and community development and engagement. Follow Jim on Twitter @JamesABrooks.

Cities Are Taking a Regional Approach to Closing the Skills Gap

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

Middle skills occupationApprentice working with engineer to inspect manufacturing machinery. (Getty Images)

Economic development consistently ranks as a high priority for local officials across the country. Alongside this priority is a growing focus on the need for increased postsecondary education opportunities at two and four year colleges and career and technical education institutes. The leadership of local officials is critical to increasing these opportunities, which in turn can provide a substantial return on investment for their community.

In July 2015, NLC partnered with the Los Angeles Area Chamber of Commerce to hold a mayoral summit on postsecondary success in Los Angeles, supported by The Kresge Foundation and J.P. Morgan Chase.

Source: JP Morgan Chase

Source: JP Morgan Chase

The summit marked the release of the Los Angeles Skills Gap Report, which shows that Los Angeles County has a diverse economy with a wide array of middle-skills jobs – those that require a high school diploma and technical training, but not necessarily a four-year college degree. Unfortunately, it also shows that many Los Angeles residents lack the education and skills that employers are looking for. This means that many industries are struggling to fill key middle-skills positions, while many potential workers remain either unemployed or underemployed.

Studies show that this dilemma is playing out in communities across the country. NLC’s own Cities and Unequal Recovery indicates that despite the significant economic growth in cities over the past two years, there continues to be a skills gap.

At the summit, city leaders highlighted the postsecondary success initiatives they are using to combat this skills gap. Robert Garcia, mayor, Long Beach, Calif., showcased the Long Beach College Promise and the Long Beach Internship Challenge to expand on-the-job learning opportunities for young people. Rusty Bailey, mayor, Riverside, Calif., talked about Completion Counts, an initiative that helps students apply for, attend and complete community college.

The city of Los Angeles is in the process of establishing local goals for college success with a number of partners, including the Los Angeles Community College District and several universities in the region. These goals will help ensure that young people have the resources they need to achieve postsecondary success and create a stable and thriving workforce in the city and the greater Los Angeles region.

Like Los Angeles, many cities are adopting a regional approach to close this skills gap. In San Antonio, Mayor Ivy Taylor supports the SA Works initiative, which has a goal of creating 20,000 new applied learning opportunities, including a countywide STEM degree accelerator project through the Alamo colleges, as well as a place-based training program for 300 Eastside San Antonio residents.

This initiative is part of SA2020, a nonprofit whose mission is to help connect the community for a stronger San Antonio. SA2020 has helped create an alliance between City Hall and the San Antonio Chamber of Commerce that focuses on regional industry needs, and works to ensure that workforce needs and postsecondary offerings are aligned so that residents have the training they need to take on middle-skilled, well-paying jobs in San Antonio and Bexar County.

A C Wharton, mayor of Memphis, Tenn., established the nation’s first Office of Talent and Human Capital within the mayor’s office to provide dedicated staff focused on developing, retaining and attracting talented workers to Memphis and Shelby County. The mayor has also connected with the business community to provide pathways for residents to access jobs in Memphis’ growing service, healthcare and knowledge-based industries.

Local leaders can play an essential role in developing this approach by investing in activities that strengthen their region’s competitive advantage by:

  • Establishing and maintaining a leadership structure to guide and sustain college access and completion efforts.
  • Setting community goals and rally necessary partners.
  • Maintaining and analyzing real time data on postsecondary attainment.
  • Aligning local industry needs with community colleges and credentialing courses.

To learn more, check out NLC’s page on postsecondary success.

Miles Sandler
About the Author:
Miles Sandler is the Senior Associate for Education in the NLC Institute for Youth, Education, and Families. Miles can be reached at

Retention and Attraction Strategies for a Balanced Retail Sector

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

Empress of China SFNeighborhood institutions, such as the Empress of China restaurant in San Francisco, are often forced to close their doors due to escalating rent prices – but city leaders can balance retention and attraction strategies to sustain a healthy and diverse local business community. (Image courtesy

Small businesses in some San Francisco neighborhoods are “disappearing as fast as an artisanal ice cube in a $14 craft cocktail” because of a development boom that’s turning neighborhood institutions, like the Empress of China and Lombardi Sports, into housing units. In Washington, D.C., local shops like Jak & Co. Hairdressers are closing their doors due to escalating rent prices.

At the same time, though, Cleveland has found it difficult to attract a full-scale grocery store downtown. Fort Worth also recently struggled to attract a retailer to a lower-income and underdeveloped neighborhood of the city.

What’s happening in these scenarios is nothing new. The real estate industry tends to develop where demand and buying power are high enough to create a return on investment. Even though cities don’t have direct control over the private real estate market, there are indeed strategies local governments can implement to create equity across neighborhood retail sectors.

City leaders should find the right balance between retention and attraction strategies to sustain a healthy and diverse local business community across all neighborhoods. Business retention strategies help existing local businesses keep their doors open. Business attraction strategies encourage or promote business growth in areas that wouldn’t otherwise be considered viable options for investment.

Achieving the right balance can undoubtedly be a complicated and ongoing process. Cities from NLC’s Big Ideas for Small Business peer network recently shared some of their local best practices.

Business Retention

 Legislating to preserve legacy businesses.  San Francisco is considering Legacy Business Legislation that would help retain local businesses in their original location by providing incentives to both the business and property owners. The businesses affected by this legislation are mom-and-pop restaurants, bars, and other small retailers operating in the city for at least 30 years. In recent years, these historic retailers have been “swallowed up” by the city’s development boom.

Providing business owners with site relocation assistance. For existing businesses that can no longer afford their leases, the choices are either to close up shop or relocate to a different neighborhood. Retail site selection tools, like the Retail Site Search from the Washington DC Economic Partnership (WDCEP), catalogue all of the available commercial spaces in the city. Every year, the WDCEP works with several business owners to choose a new, more affordable site for their business. The WDCEP tracks data on new business licenses that provides a unique vantage point into areas where businesses are growing and commercial rents are likely to rise.

Business Attraction

Partnering with a public hospital to build a grocery store in a food desert. Grocery stores are one of the more difficult types of retail for cities to attract in underserved areas. A public hospital in Kansas City, Mo., is supporting the construction of a grocery store in a section of the city that is now considered a food desert. The hospital’s vision is to provide access to fresh, affordable produce so that local residents are healthier and need fewer emergency room visits. Once it’s opened, the hospital will take over the management of the grocery store and offer classes on food and nutrition.

Using vacant space for pop-up retail. Temporarily filling vacant commercial corridors with pop-up retail businesses benefits the local economy in two ways. First, it reinvigorates the neighborhood by attracting visitors and customers, and can help reestablish the neighborhood as a “hot spot” for new businesses or development. Additionally, pop-up spaces provide local entrepreneurs the chance to test their products and skills in a low-risk environment. San Antonio’s OPEN initiative provides entrepreneurs with short-term leases in vacant downtown spaces, and aims to “authenticate downtown as a vibrant urban space, ready for long-term investment.” The Pop-Up Project in San Jose also connects retailers to vacant or underutilized downtown space.

A mix of these types of retention and attraction strategies will help ensure that all businesses have the chance to be successful, and that all neighborhoods have affordable goods and services available for residents.

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

Inequality, Instagram and Incubators: This Month in Economic Development

Our monthly roundup of the latest news in economic development filtered through a city-focused lens. Reading something interesting? Share it with @robbins617.

San-Diego-InstaCould Instagram walk-around tours help cities attract visitors and showcase local landmarks? (Photo Credit: David Maloney)

Shining a new light on income inequality.
The issue of inequity is getting prime-time coverage from the White House, think tanks and mayoral state of the city addresses. A root of the problem, as a  new CityLab analysis suggests, is that the “rising tide raises all boats” approach needs to be swapped out for one that focuses on expanding advancement opportunities for low-wage earners. City leaders are taking note. Portland Mayor Charlie Hales is proposing to raise the minimum wage to $15 for city workers and contractors. San Francisco Mayor Ed Lee announced a “shared prosperity agenda” that includes affordable housing measures and universal after-school and summer programs. Huron, South Dakota is increasing city spending on English classes for new residents as a local workforce development initiative. Cincinnati just created a new city department for economic inclusion.

Forget all your troubles, forget all your cares. Things will be great when you’re developing downtown.
Cities are continuing to invest in revitalizing their downtown districts to attract retailers, visitors and residents. In places like Monroe, La., Derby, Conn., Modesto, Calif. and Osage, Iowa, city officials are making plans to enhance their downtowns with projects including expanding parking access, updating building facades and developing pedestrian walkways. Bismarck, N.D., will soon have a new downtown apartment and retail complex designed to attract young professionals. Last year, NLC’s City Fiscal Conditions study found that 62 percent of cities increased spending on capital projects and infrastructure. That number may continue to grow this year.

Old debate, new players. Are major sporting events a good development strategy?
It’s an age-old question. Is hosting a major sporting event a good economic development strategy? This debate has been playing out in Glendale, Ariz. and Boston, Mass. in recent weeks. Leading up to the Super Bowl, Glendale Mayor Jerry Weiers tried unsuccessfully to get reimbursed the $2.1 million his city spent on security during game week. Meanwhile the city of Boston won the U.S. bid to host the 2024 Summer Olympics, but not everyone is wicked excited about Bostonians handing out the gold medals. A new nonprofit, No Boston Olympics, formed to protest the bid and says it plans to push for a ballot initiative or state legislation that could prevent the Games from coming to Boston. No Boston Olympics argues the city could be left in debt or forced to use taxpayer dollars to support the Games.

Coworking spaces are popping up in new cities.
Affordable, shared workspaces for entrepreneurs (a topic we’ve talked about here also) are launching in new places. DeskHub in Scottsdale, Ariz., recently opened its doors to the community and is the largest coworking space in the Phoenix metro area. Artists, crafters and makers in the nation’s capital can now rent space at the Brewmasters Studio in downtown D.C. to let their creative juices flow in the company of fellow artists. Plans are also officially underway to build an innovation district in Chattanooga.

The Great GASB.
The Government Accounting Standards Board (GASB) proposed a new set of rules requiring state and local governments to disclose details about tax abatements. Over 300 organizations weighed in during the recent comment period, with a decision expected from GASB this summer. While greater transparency and accountability in the use of incentives gets a big thumbs up, concerns abound regarding the administrative burden the rules would impose, and the lack of context in which abatements would be disclosed.  Stay tuned…

Idea of the month: Downtown Instagram walking tours.
Speaking of downtowns, a local photographer in Bluefield, W.V., developed an Instagram walk-around tour of his city, attracting shutterbugs from the area to snap photos of downtown buildings and landmarks. This could be a unique new approach for attracting visitors and showcasing a city’s unique architecture, parks or art.

What we’re reading.
Governing’s new series on gentrification. On a related note, can Starbucks predict where gentrification will happen next? Also, policy ideas from the Kauffman Foundation for how federal, state and local government should support immigrant entrepreneurs.

For a laugh.  
It’s state of the city season. Are you ready? Cupertino’s Mayor Rod Sinks just raised expectations to new heights by jumping out of an airplane with his council colleagues as part of his speech.

Check back here on our blog Friday, Feb. 6, for NLC’s take on what the latest Bureau of Labor Statistics’ numbers mean for local government workforces.

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About the author: Emily Robbins is the Senior Associate, Finance and Economic Development at NLC. Follow Emily on Twitter: @robbins617.

Tying Business Incentives to an Economic Development Strategy

This is a guest post written by Ellen Harpel. Post originally appeared on the Smart Incentives blog.

Construction-in-SingaporeEconomic development initiatives like this construction project in Singapore are more successful when investment incentives align with the values articulated by the overall development strategy. (Getty Images)

Incentives are not just about winning a deal or completing a transaction with an investor. Smart incentive use is always connected to a larger economic development strategy.

Economic strategy

Any project for which incentives are offered needs to be evaluated in the context of community economic goals and strategies. Many communities have an economic development strategy, though perhaps of varying quality, and making sure that an incentivized project aligns with the broad statements and values within that strategy is an important first step. Unfortunately, a surprising number of communities either do not have strategies in place or do not align their incentive programs to those strategies. Community discussions on incentive use focus on the deal, not the reason for the deal. My work around the country has revealed that the public, elected officials and even economic development board members do not see how incentives are connected to the broader economic development mission, seeing them entirely as necessary evils to enable business recruitment.

Program goals

Policymakers are increasingly ensuring that individual incentive programs have clear goals, although we have seen that guiding legislation can be frustratingly unclear, making both implementation and evaluation difficult. Clearly defining the purpose of an incentive program helps ensure it will be used as intended. Otherwise, it runs the risk of being offered to all comers regardless of their capacity to connect to community goals. Communities also often have specific objectives related to supporting target industries or developing individual sectors of the economy. Economic developers may be urged to support small businesses or firms meeting certain demographic criteria. Economic development organizations often work with regional or national organizations and may need to align efforts with their broader strategies. Sustainable development may be a priority. These are all additional strategic factors that should be considered when assessing the basic project benefits that an incentives investment might generate. Good economic development organizations know their communities well and should be able to relatively easily assess whether a proposed investment aligns with community values on these factors, singly or in combination.

Ellen Harpel bio photoAbout the Author: Ellen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. Contact Ellen at or You can also follow her on Twitter at @SmartIncentives.

Cities Focus on Talent, Quality of Life to Grow Local Economies

Instead of focusing singularly on business attraction or workforce development, mayors across the country are taking a more holistic lens to economic development.

Denver-Downtown-ActivityPeople wandering around shops and restaurants in downtown Denver. Getty Images.

In his State of the City speech earlier this year, Mayor Greg Fischer from Louisville shared his mantra for economic development: “In today’s world, companies can’t locate just anywhere – their workforce is not interchangeable. They want to locate where they can find a pool of skilled workers – and a place with the quality of life to attract and retain them, no matter where they are from. So the jobs follow the people.”

Our analysis of annual State of the City speeches finds that many mayors across the country are thinking about economic development in a similar way, taking a more holistic lens instead of focusing singularly on business attraction or workforce development.

The quality of life in a city is an important deciding factor in where residents and businesses locate. Making a city a place where people want to live, then, will also make it a place where people will want to work or start a business.

Demographic trends indicate that this shift in approach to economic development is coming at just the right time. The Kauffman Foundation points to data showing there will be more “thirty-somethings” in the U.S. over the next 20 years than ever before. As Kauffman researchers have suggested, this is an exciting opportunity for cities because the “peak age” for entrepreneurship is late thirties to early forties.

No Time Like the Present

Based on this data there is, quite literally, no time like the present to support small business growth and entrepreneurs. Our analysis of State of the City speeches demonstrates that cities are starting to prepare themselves for this new entrepreneurial environment. Larger cities are seemingly leading the way in developing city initiatives to support start-up growth, but smaller cities are a player in this game too.

Small business is the common business-related topic mentioned by all cities, with 37% of mayors discussing it during their addresses. This does not come as a surprise since small businesses are a key economic driver in a lot of cities, regardless of their size.

Overall, 19% of mayors discuss entrepreneurship in their speeches, with the majority (36%) coming from large cities. However, in cities with 100,000 or less in population, 10% of mayors discuss entrepreneurship, which means this topic isn’t completely off the radar among smaller communities.

Two widespread strategies for supporting entrepreneurship, accelerators and incubators, are not mentioned at all in cities under 50,000 in population, but are discussed somewhat frequently by big city mayors (4% and 18% respectively).

Cities Spearhead Economic Growth

Across regions and population sizes, the cities we analyzed are spearheading some interesting initiatives to support economic growth in their communities.

Providing support to business owners is a theme throughout many mayors’ state of the city addresses. Mayor Bill Lambert in Moscow, Idaho, discussed how he helps support the Palouse Knowledge Corridor, a partnership between two area research universities, economic development agencies, the business community and city government that strives to create economic opportunities in the region.

As part of these ongoing efforts, the city will help host an event called, “Be the Entrepreneur Bootcamp” designed to help entrepreneurs develop business plans and connect with mentors and investors.

Mayors are also pledging to cut red tape at city hall and make it easier for local companies to comply with the city’s regulatory requirements. “The spirit of entrepreneurship is alive and well in Seattle, and we need to make sure the city is contributing to – and not inhibiting – that energy and enthusiasm,” said Seattle Mayor Edward Murray. “This year, the Office of Economic Development will launch a new online restaurant resource guide to help new restaurant owners navigate the local and state regulatory process.”

Workforce development approaches were also highlighted in the city’s speeches. Recognizing that “unemployment is unacceptably high in communities of color, particularly among young men,” Jersey City’s Mayor Steven Fulop will be connecting students to construction apprenticeship programs offered in partnership with local unions and developers as part of the city’s overall goal to increase job placement by 33%. Similarly, in Providence, the city is investing in construction apprenticeship programs through Building Futures and YouthBuild Providence.

The Role of Mayors

A mayor’s role in growing a city’s local economy takes on many forms, from creating well-paying jobs to training a skilled workforce to developing an environment that attracts families and business owners alike.

Economic development was the most frequently-cited topic in our analysis of state of the city speeches, with 98% of mayors mentioning it and 67% dedicating a significant portion of their remarks to the topic. NLC will be releasing more information about this and more topics when we publish our State of the Cities report later this month at the Congress of Cities Conference.

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About the author: Emily Robbins is the Senior Associate, Finance and Economic Development at NLC  and the author of a new report on entrepreneurship and small business growth. Follow Emily on Twitter: @robbins617.

Using Data to Improve Accountability in Economic Development Programs

This post was written by Ellen Harpel, founder of Smart Incentives and president of Business Development Advisors LLC (BDA), an economic development and market intelligence consulting firm. Post originally appeared on the Smart Incentives blog.


Data is one of the key elements of the Smart Incentives 4×4 framework that enables communities to make sound investment decisions. Unfortunately, good data on how well incentive programs work is often lacking. This lack of data hinders both economic development professionals in their day-to-day work and policymakers in their leadership and oversight roles.

Last year one report concluded unhappily, “We simply don’t have the information we need to make good decisions about incentives.” The Pew Charitable Trust’s widely-cited 2012 report, Evidence Counts, found that “half the state have not taken basic steps” to provide evidence of whether incentives work well or not, and “no state regularly and rigorously tests whether those investments are working,” though many states have taken valuable steps to begin to understand and evaluate the impact of their incentive programs.

Here we consider 3 data themes: available resources, challenges in data collection, and organizational advice to improve data management.

1. We have better data than ever on existing state incentive programs and past deals thanks to the Council for Community and Economic Research (C2ER) State Business Incentives Database and Subsidy Tracker 2.0 from Good Jobs First. These resources provide a great start for understanding the incentives environment. Further, many states are striving to improve the quality of reporting on their incentive use, providing new insights into existing programs.

2. We know we still need to improve data collection to assess compliance and outcomes associated with incentive deals, but we first must overcome substantial challenges. These include but certainly aren’t limited to:

  • Applying consistent definitions to the various measure of merit, including how we count jobs (all, new, over a baseline, full-time (by number of hours worked?), part-time), wages and investment
  • Accessing data sources to obtain and validate these measures by project
  • Determining project timing for compliance versus evaluation purposes
  • Tallying the exact cost of each incentive, both on a project and a program basis. This is particularly challenging for many tax–based incentives taken as needed over a multi-year period. Further, should costs be calculated by project? by annual budget impact? by program?
  • Deciding who should collect the data and how the data management effort should be staffed and funded

3. Enabling economic development organizations to address these data challenges requires significant effort, including the following critical steps:

  • Assembling a team with analytical skills as well as subject matter expertise. The team should encompass economic development knowledge, experience working with businesses, political awareness, analytical skills and information system expertise. You’ll probably have to look beyond your own agency to pull together the talent you need.
  • Asking the right questions to guide data improvements by defining the current situation, describing an improved state, focusing on the most important issues that need to be addressed, and agreeing on a desired outcome.
  • Collaborating with other agencies to collect data and share analytics expertise. Development finance entities, tax and revenue departments, and workforce or labor departments are all potential allies for data collection, analysis and verification of incentive use and compliance.
  • Setting expectations at senior levels for analysis and accountability in incentive programs. Staff must know that their efforts to track compliance and performance are important to the economic development mission and the organization’s leaders.

Smart Incentives works every day to provide state and local governments the data and analytics they need to identify what works and to enable sound decisions when awarding incentives. Founder Ellen Harpel is also pleased to be part of the Center for Regional Economic Competitiveness team working with the Pew Charitable Trusts on the Business Incentives Initiative, designed to improve data collection, management and reporting within state incentive programs.

HarpelAbout the Author: Ellen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. Contact Ellen at or Follow Ellen on Twitter @SmartIncentives.

Supporting Small Businesses through Economic Development Offices

This is a guest post written by Jason Rittenberg.

Bakery Square in Pittsburgh is a mixed-use redevelopment project of CDFA member Urban Redevelopment Authority.

Bakery Square in Pittsburgh is a mixed-use redevelopment project of CDFA member Urban Redevelopment Authority.

Incubators. Microlending. Accelerators. Crowdfunding. From rural areas to large cities, from the middle of the country to the coasts, today’s economic development entities — and their jargon — are all-in on encouraging small business finance.

Communities are increasing their support with good reason. Small businesses account for more than 99 percent of firms, 49 percent of employment and 42 percent of payroll in the country.[1] Further, small business lending continues to struggle out of the recession. While overall business lending is up nearly 25 percent from 2008, bank loans of less than $1 million remain down 14 percent over the same period.[2]

So communities are focused on helping small businesses, and from a constituent and need perspective, it makes sense for them to do so. But what does it mean to “help” a small business? For that matter, what is a “small” business? The answers to these questions are actually complex.

The U.S. Small Business Administration (SBA) defines a small business as having fewer than 500 employees, covering 99.7 percent of all firms. However, 90 percent of firms have fewer than 20 employees, and 62 percent have fewer than five. The difference in sophistication, goals and needs of a business with no employees is vastly different from a business with 10 employees, which is again exponentially different from a firm with 200 employees. Infusionsoft put together an infographic in 2012 to help illustrate these differences.

Given this variation, communities looking to support small businesses of any stripe need to think strategically about their economic development goals and needs before proceeding. Development finance programs require non-trivial commitments of resources to be effective and should therefore be entered into only as part of a comprehensive regional strategy. At the organization I work for, the Council of Development Finance Agencies (CDFA), we refer to this approach as the “development finance toolbox.”[3]

In the area of small business access to capital, CDFA has seen a wide variety of city and state programs be successful. Technical assistance, seed and venture capital, credit enhancement, and lending programs — as well as incubators, microlending and other trendy solutions — can all contribute to small businesses in different ways. The keys to success are to match the right program to real community needs and to find the right partners to assist in implementation.

Small business needs, foundational finance programs, and innovative support programs are all being covered as part of the Providing Small Businesses with Access to Capital forum being held in Kansas City, MO on October 8-9, 2014. Economic development, small business development, and other city staff are encouraged to participate in the event to learn about the latest and best practices for encouraging this critical sector of the local economy.

Rittenberg_HeadShot_blogAbout the author: Jason Rittenberg is the Director of Research & Advisory Services for CDFA. He oversees numerous projects, including the State Small Business Credit Initiative Coalition, and is the course advisor the CDFA Intro Revolving Loan Fund Course.




[1] U.S. Census Bureau. (2012). Latest Statistics of U.S. Businesses Annual Data. Retrieved 8/19/2014 from:

[2] Simon, P. and Loten, A. (2014, Aug. 17). Small-business lending is slow to recover. Wall Street Journal. Retrieved 8/19/2014 from:

[3] Rittner, T. (2009). Practitioner’s Guide to Economic Development Finance.

Business Incentive Initiative

This post was written by Ellen Harpel, founder of Smart Incentives and president of Business Development Advisors LLC (BDA), an economic development and market intelligence consulting firm. Post originally appeared on Smart Incentives blog.


Local businesses in New York City’s West Village. Source: Flickr user wallyg

City leaders have many concerns about the cost and effectiveness of economic development incentives in their communities, as we learned from the session on economic development financing tools during last year’s Congress of Cities. A new initiative working to develop best practices for evaluating incentives at the state level will help local elected officials whose communities use state incentive programs for business attraction. It should also provide some guidance for cities striving to assess their own local incentive programs.

The Pew Charitable Trusts recently announced the launch of the Business Incentives Initiative. This Initiative will help improve data collection, management and reporting within state incentive programs in order to “improve decision-makers’ ability to craft policies that deliver the strongest results at the lowest possible cost.”

Pew and the Center for Regional Economic Competitiveness will engage leaders from seven states (IN, LA, MD, MI, TN, OK, VA) to develop best practices for evaluating economic development incentives by:

  • Identifying effective ways to manage and assess economic development incentive policies and practices.
  • Improving data collection and reporting on incentive investments.
  • Developing national standards and best practices that states can use to successfully gather and report data on economic development incentives.

As project manager Jeff Chapman explained in an interview with Bloomberg BNA:

This initiative builds on Pew’s ongoing project to help state policymakers implement ongoing evaluation of economic development incentives. As states work to measure the effectiveness of these programs, they often find they lack the data needed to determine whether an incentive is producing the expected outcome. Further, there is currently no source that has identified and compiled the best practices on how to overcome this obstacle.

All states were invited to submit proposals to participate, and seven were selected. They have agreed to commit top decision-makers from economic development, revenue, and other relevant state agencies to work intensively with Pew throughout this 18-month program. Each of these seven states has also already begun to address the challenges associated with economic development incentive program management and evaluation. The Pew team will work with the states to develop and implement tailored solutions for each state, while also paving the way for development of best practices and training that will be available to all states.

I am pleased to be part of the Center for Regional Economic Competitiveness team working with Pew on this important effort. Our role will be to leverage our economic development and incentives expertise to provide technical assistance to the states.

Here at Smart Incentives, we have emphasized the importance of data, analysis, transparency and accountability in economic development incentive use. The lack of quality data regarding compliance and effectiveness is a significant problem for the economic development field and policymakers trying to do what’s best for their communities. The Business Incentives Initiative represents a notable step forward in enabling smart incentive use in all states.

HarpelEllen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities. 

Contact: or Follow Ellen on Twitter @SmartIncentives.