For several years, the NADO Research Foundation has trained EDD staff and partners on a wealth creation framework known as WealthWorks that seeks to build multiple types of capitals or assets in a community or region. This approach, recognized as a best practice in EDA’s CEDS Content Guidelines, emphasizes support for local ownership and control of businesses and assets in order to root wealth in a region. It is also intentionally inclusive, seeking ways to incorporate a variety of voices as planners and owners, not only as intended beneficiaries or consumers. A handful of EDDs are using wealth creation in CEDS and other EDD regional planning efforts, demonstrating that this approach can influence EDD operations, including improving consideration of equity and access when designing stakeholder participation or even procurement and hiring. Through the Economic Development District Community of Practice (EDD CoP), made possible through an award from the Economic Development Administration, the NADO Research Foundation is coordinating with EDD practitioners and other rural and regional development practitioners to incorporate this wealth creation model where appropriate.
Wealth creation is an approach to economic development that connects a region’s assets to market demand in ways that build rooted wealth for local people, places and firms. It brings together a range of public, private and non-profit sector partners who have self-interest in the outcomes and an openness to discovering shared or common interests.
A region’s wealth is made up of stocks of eight capitals, meaning the quantity and quality of the components of those capitals in the region. These are Individual (skills and health), intellectual (knowledge, creativity and innovation), social (trust and relationships), cultural (traditions, ways of doing), natural (natural resources), built (physical and information infrastructure), political (voice and power), and financial (monetary resources).
Local ownership and control is about “making wealth stick.” Wealth creation is about making sure a region’s capitals stay in place and that people, organizations and communities in the region can make decisions about how they are used and invested.
Wealth creation is ultimately about improving lives. Improving livelihoods for those on the economic and social margins is good economic strategy. As they move toward and enter the economic mainstream, everyone does better. People, places or firms achieving lasting livelihoods when they increase upward mobility, increase resilience and increase future prospects.
A wealth creation value chain is a network of people, businesses, institutions, and non-profits who collaborate to meet market demand for specific products or services – each advancing individual self-interest while together creating greater local wealth. Value chains build multiple forms of wealth, keep that wealth local and build lasting livelihoods.
Focus on capitals. The entry point for wealth creation is using eight capitals to understand the variety of assets a community or region has. There are many ways to gather this information, including an asset inventory, a SWOT analysis (or alternatives), and ways of measuring progress and understanding outcomes.
Sector specific approaches. EDDs have brought players in an industry sector together to figure out pathways to “coopetition,” or ways of cooperating that rise above competition to benefit the sector and the region as a whole.
Building value chains in sectors. This is about bringing partners together around an industry sector, mapping out the value chain system, determining where the gaps lie and strategizing collaboratively about how to fill them.
For more information about wealth creation, visit nado.org/eddcop or contact Melissa Levy, Regional Development Researcher/Wealth Creation Specialist at [email protected].
This resource is offered through the Economic Development District Community of Practice (EDD CoP), managed by the NADO Research Foundation to build the capacity of the national network of EDDs. To learn more, visit: www.nado.org/EDDCoP. The EDD CoP is made possible through an award from the U.S. Economic Development Administration, U.S. Department of Commerce (ED22HDQ3070106). The statements, findings, conclusions, and recommendations in this resource are those of the author(s) and do not necessarily reflect the views of the U.S. Economic Development Administration or the U.S. Department of Commerce.