By Matthew Tester, Project Associate.
The Brookings Institution recently convened a forum around the concept of metropolitan business planning, which was presented as a new approach to economic development. The forum served as a platform for introducing the concept and presenting the strategies of three pilot regions which have partnered with Brookings in its development and implementation. Essentially, metropolitan business planning aims to “adapt the discipline of private-sector business planning to the task of revitalizing and restructuring metropolitan economies.” The participants make the case that the business planning model is the right approach at the right time and that the right scale is metropolitan.
First, on the business planning approach: The core components of the metropolitan business planning concept are “look deeply at the assets in your economy, understand your market, develop strategies and products and real executable operational plans” – to which most economic developers say…”duh.” This doesn’t sound like new territory; we do this for a living. But the point is that this process should not result in a plan, but launch an ongoing enterprise that behaves in business-like ways and is accountable for performance outcomes. This approach is an intentional acknowledgment of our austere budgetary environment. Investments must have demonstrable returns. Good returns are more likely if economic development initiatives map clearly to the strengths, qualities, and opportunities of each metro region. The strategy formation phase must be inclusive and intensive, and it must produce a convincing investment. Each of the pilot regions now has in hand a true business plan and even a prospectus for lead strategies identified in the process. The Building Energy-efficiency Testing and Integration (BETI) Center and Network in the Puget Sound provides one example.
Second, on geographic scale: Through its Metropolitan Policy Program, Brookings has long been a champion for the role of metropolitan areas in driving national prosperity. According to Bruce Katz, director of the program, the national economy has become metropolitan in form and function. The vast majority of population, GDP contribution, innovation, and capital are in the top 100 metros. New Growth Theory, Economic Geography, and Institutional Economics provide the theoretical backdrop to a metro-oriented approach – knowledge attracts other knowledge; concentration creates synergies; and enabling environments are crucial. A particular emphasis is placed on the potential for metro areas to focus public investment programs and break down silos. According to Bob Weissbourd, a new government is created every 18 hours (funny anecdote – there are more governments in his home state than barbershops or dentists). As the growth engine of the new economy, metro areas with actionable business plans can push for coordination and simplification among governments at all scales, producing better and more measurable returns on public investment.
According to Weissbourd, metro economics should operate under three principles: a comprehensive and integrative approach; customization to each metro region; and building institutional capacity. The “leverage points” for strategy development are concentrations (occupational and functional); human capital; innovative infrastructure; spatial efficiencies; and institutional infrastructure.
While I respectfully take issue with Brookings styling the concept as something brand-new, the focus on deep regional analysis and acutely tailored strategies is a really fantastic thing, and the emphasis on a business-like approach is appropriate in today’s budgetary climate. The presenters and panelists did a great job tying together the manifold economic realities and imperatives facing our nation into a cohesive set of principles that should guide economic growth going forward. Market Street approves.
Check out video, audio, and text here:
Check out the BETI business plan and prospectus: