WealthWorks for Your Region: An Introduction
Communities across the United States are trying new approaches to regional economic development—and succeeding.
One new approach—WealthWorks—focuses on building lasting wealth for regions. But wealth means much more than money. Building lasting wealth means growing multiple capitals—a strong sense of community, good infrastructure, a well-trained workforce, unspoiled natural beauty, and inclusive and open government.
Example: The natural beauty of Michigan’s Upper Peninsula was underutilized capital in a region losing both population and mining and timber income—until Northern Initiatives pulled together stakeholders to leverage their natural capital to build a more diverse and resilient economy for the region.Photo courtesy Happy Photo Guy via Creative Commons license
WealthWorks focuses on three outcomes in doing economic development differently. The first is investing in and expanding eight capitals: social, political, cultural, built, intellectual, individual, financial, and natural assets. Practitioners strive to build the stocks of many capitals while doing harm to none.
Example: By focusing on the growing demand for green building, Appalachian Sustainable Development was able to increase the region’s financial capital, individual capital of workers trained in new skills, and built capital in the form of showcase architecture like the new facility at Heartwood, Southwest Virginia’s Artisan Gateway, while maintaining its natural capital of hardwood forests through sustainable forestry.Photo courtesy Criedhammer via Creative Commons license
WealthWorks practitioners also consider how the assets their efforts generate are owned. Who has the capital? Who benefits from its use? Strategic ownership and control mechanisms spread the capital widely and root it locally.
Example: The Deep South has a strong agricultural history, but too many resources are concentrated in the hands of a few. Now the Deep South Wealth Creation Network is bringing together local farmers, traditionally land-rich and cash-poor, to help them access larger markets, engage young people and redefine farming as a path to prosperity.Photo © Kertis Creative
Finally, doing economic development differently requires attention to those people, places and businesses that need it the most. WealthWorks means improving the wellbeing of residents, but particularly those at the economic margins.
So how do you begin to build this lasting wealth? The challenge for you as an economic and community development practitioner is to identify a market opportunity that is right for your region.
What’s a market opportunity? A market opportunity is documented demand for a set of products or services that—with the right set of investments and connections—your region could produce and that has good potential to generate wealth-building results.
Example: In recent decades, farms in the Arkansas Delta have had to grow larger in order to survive, making it difficult for small-enterprise farmers to compete. But Communities Unlimited, a regional CDFI, realized that the growing demand for biofuels represented a new opportunity. And farmers could grow camelina—an oil-rich seed providing a new bioenergy source—during their off-season without compromising their existing growing schedule, adding to their bottom lines.Photo © Kertis Creative
You identify demand by examining existing and emerging sectors in your region, particular products or services the region is producing or wants to produce, and the needs of your regionally rooted buyers.
The obstacle faced by Communities Unlimited—and the Arkansas Green Energy Network that Communities Unlimited helped launch—was the cost of refining biofuels. But when a small-scale biofuels micro-refinery was developed at a local community college, it provided an affordable means to refine both farmers’ camelina crops and waste vegetable oil into biofuels for local markets.Photo © Kertis Creative
To narrow your selection further, consider which market opportunities are best suited for your region—meaning they will harness the most local energy, solid wealth-building potential, and capacity to scale into bigger and better results.
The next step is to connect the capitals you’ve identified to the market opportunities you want to pursue first. A WealthWorks value chain helps you make that connection.
A WealthWorks value chain is a coordinated network of people, businesses, organizations and agencies that addresses a market opportunity to meet demand for specific products or services—each advancing individual self-interest while together building rooted local and regional wealth.
Example: Kentucky’s Clean Energy Value Chain is made up of rural electric cooperatives, local utilities, small businesses—particularly grocery stores—and homeowners. During their pilot project stage with just four rural electric cooperatives, the value chain was able to save local businesses and consumers more than $2.5 million in costs, while creating 32 jobs for contractors, 18 of which went to low-income contractors.Photo © Kertis Creative
A coordinator serves as the backbone of a WealthWorks value chain, weaving together the efforts of everyone involved. The coordinator can be an organization, a public agency, a team of interested partners, or a business.
Example: In the Arkansas Delta, Communities Unlimited pulled together a network of more than 20 community stakeholders—state and federal agencies, four regional colleges and universities, small-firm entrepreneurs, green energy enthusiasts, energy associations, and community leaders—to form the Arkansas Green Energy Network. With Communities Unlimited as coordinator, DeWitt has quickly become the hub of a 10-county waste vegetable oil recycling district.Photo © Kertis Creative
There are three primary types of partners in a value chain, and they each play different roles. Demand partners are the buyers. Transactional partners are the sourcers, producers and distributors. Support partners provide the transactional partners with technical support and assistance.
Example: The Carolina Textile District is a manufacturing value chain network dedicated to revitalizing the textile industry in a sustainable way. To do so, they created a Client Intake System to coordinate demand partners, brought in local companies with underutilized capacity as transactional partners, and pulled in support partners like Catawba Valley Community College’s Manufacturing Solutions Center for technical assistance, financing and other resources.Photo courtesy Appalachian Transition Fellowship via Creative Commons license
In the process of constructing a value chain, there are frequently gaps, bottlenecks or underutilized resources. To build wealth, the community or region must fill gaps, address bottlenecks, or bring underutilized resources into productive use.
Example: The Deep South Wealth Creation Network began by mapping the pieces of the value chain they had in place—every step it took to get crops produced, processed, transported and sold. They then looked for gaps in the chain, especially ones they could address better together. They brought in experts from Tuskegee University to help Network farmers get GAP certified and adopt growing protocols to meet buyers’ standards, they turned an old gas station/convenience store into a facility to wash and bag produce, and they brought local youth into a “Green Team” staffing operation that goes farm to farm.Photo © Kertis Creative
In WealthWorks, investment includes any use of a capital for wealth-building results. Applying an underutilized resource to fill a gap in the value chain is a wealth-building investment.
Every partner in a WealthWorks value chain is an investor, expecting to receive something for their effort. The benefits may be direct—“What’s in it for me?”—or broader—“What’s in it for the region?”
The final step is to gauge your wealth-building impact (more on that to come), and then cycle back to see how your efforts have changed your initial assessment of capitals and opened new market opportunities.
WealthWorks is producing better results for low-income places, people and firms. And it’s being implemented across sectors—in manufacturing, housing, energy, forestry, tourism and agriculture. The practice is applicable to different kinds of economies and different kinds of business. Follow the links below for more information.