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1. Explore regional wealth building

Explore Regional Wealth Building

Wealth is a word that can mean different things to different people. For many, wealth simply means money—and it’s something that only a select few have in abundance. But wealth can mean much more than money.

For example, if you live in the Rocky Mountains or along the upper shores of Lake Michigan, you and your neighbors share a wealth of natural beauty and amenities—this wealth may be the reason you choose to live where you do. Men and women with long experience working in local industries have a wealth of skills and creativity. People who have attended college or specialized training have a wealth of knowledge. Towns that have a range of community-wide activities and active civic groups have a wealth of connections. Young children with access to affordable, preventive pediatric care might count good health as a type of wealth.

Wealth means different things in different contexts. And what it takes to build wealth includes other critical factors. That’s why, in WealthWorks, the goal of economic and community development is not just wealth, it is wealth building for lasting livelihoods. So, to start, here is a common understanding of the term wealth building and what it means for WealthWorks.

Wealth building in a region means taking action to increase all three of these:

  1. The quality and quantity of wealth—­embodied in eight different types of capital.
  2. The local ownership and control of that wealth by a region’s people, places or firms.
  3. The livelihoods of people, places and firms in the region, including moving those on the economic margins toward the mainstream.

WealthWorks’ definition of wealth building starts with the core belief that every place has wealth. Even if it is not currently in use, that wealth can be identified, deployed and increased to improve the lives of residents. Here are just a few examples:

Notice again, in these examples, wealth is not just about money, but instead represents different types of capital—like natural resources, culture and know-how. When owned or influenced, either individually or collectively, by residents of a region, this capital can be deployed by residents to shape, sustain and improve livelihoods.

WealthWorks helps communities do this by identifying, deploying and investing in existing regional wealth, strengthening local or regional ownership and control of it, and ensuring that many in the region—always including low-income people, places and firms—participate in and reap benefits from economic and community development action. In short, WealthWorks seeks to build regional wealth.

Why WealthWorks? Its focus on regional wealth building creates new possibilities for economic and community development. It helps widen the development focus beyond the core of profit, income and job creation today—the typically stated targets for development—to include the essential factors that will sustain profit, jobs and income into the future. WealthWorks’ wealth-building strategy produces wealth that sticks because it shows how to invest in and increase influence over local assets to produce benefits for the region both today and tomorrow.

To introduce and explore WealthWorks’ potential, this module defines the core concepts and goals of wealth building: wealth, ownership and livelihoods. Then, we explore how you can begin to think about wealth-building in your region.

Wealth: The eight capitals

The eight capitals: intellectual, financial, natural, cultural, built, political, individual and social.

To build a region’s wealth, WealthWorks considers not just financial assets, but includes the stock of all capitals in a region. This approach takes into account all the features of a city, town, countryside or region that make it a good place to live, work and visit. These might include: a strong sense of community; good infrastructure (e.g., affordable broadband, good roads, health care); well-trained workers with the right skills to be productive in local businesses; unspoiled natural beauty (e.g., lakes, streams, hiking trails, parks) or natural assets like wetlands that control flood waters; inclusive, open government; a few strong sectors with well-paying jobs and career possibilities.

Each of these represents a component of a type of capital. Some components of capital—like the ones listed above—are more immediately recognizable than others. Some are less visible because they are in disrepair, not used, or taken for granted. Such “underutilized resources,” if identified and invested in, could contribute more to the region’s wealth. For example, a vacant lot considered an eyesore today could, with imagination and investment, become a productive community garden or recreational space tomorrow. Underskilled but willing workers could, with investment in training programs for skills that local firms need, become the region’s strongest asset.

Regional ownership and control

Regional ownership and control can take many forms. However, it is the local or regional aspect of ownership and control that marks it as a true wealth-building strategy.

A growing number of economic and community development practitioners are concerned with how to “make wealth stick.”

Classic examples of wealth not “sticking” surface all the time in the hallway conversations about development. In one common case, rural communities lament when they create and offer their high school graduates college scholarships to far-away universities; this builds the youth’s individual capital, but if the young people never return, that capital leaves the region. In another, regions complain when generous public incentives are awarded to large firms to locate there, but the firm is not locally owned, participates little in community life, only offers its lowest-wage jobs to locals, or moves away when a better location deal lures them to a different region.

In short, wealth-building is not just about increasing wealth—that is, the quantity and quality of your stocks of eight capitals. It must include making sure those stocks of capital stay in place and that people, firms, organizations and communities in the region can make decisions about how they are used and invested in the future. In WealthWorks, we call this essential ingredient of wealth building regional ownership and control.

Lasting livelihoods

How can this economic development strategy be altered so that those on the margins can participate in its design, and so that they will benefit from it?

The allure of wealth building is its capac­ity to improve lives. For that reason, the last essential component of wealth building is lasting livelihoods.

You might well work hard to increase stocks of capital, along with local ownership and control, in your region. But if low-income people, places and firms in the region are not doing better or are not well poised to do better, you have not met the WealthWorks test for wealth building.

Why is this so important? It’s because improving livelihoods for low-income people, places and firms is simply good economic strategy. If they stay low-income or fall further down the economic ladder, they have less to spend in your region, fewer family resources—like ready transportation, good health, time or network connections—that enable them to participate in and contribute to the community, and they may create strains on scarce public resources. If they do better, they spend more in the region, their children do better, and they contribute more time, resources and ability to community activities. As low-income people move toward and enter the economic mainstream, everyone does better.