Rural Wealth Creatoin

An Approach for Creating Wealth in Rural Regionsin Rural Regions

Deborah Markley Wayne FawbushManaging Director CRE Program OfficerManaging Director, CRE Program OfficerCoordinator, Wealth Creation The Ford FoundationResource Team

Wealth? Isn’t it all about jobs?Wealth? Isn t it all about jobs?

• Our “jobs focus” hasn’t led to sustainable economic jprosperity or quality of place in many parts of rural America

• Creating quality of place requires the creation of wealth –b dl d fi dbroadly defined– Healthy, skilled people

– More resilient environment that contributes to sustained prosperity

– Growing businesses that are reinvesting in place

– Innovation in business, governments and non‐profits

– Stronger more inclusive leadershipStronger, more inclusive leadership

– Demand‐driven infrastructure that supports competitiveness

– Public capital that leverages private and philanthropic resources

2

Why is this so important TODAY?Why is this so important TODAY?

• Current public sector funding environment is challenged!• NADO –

“There will be a pressing need for regional development organizations (including those designated as EDA Economic g ( g gDevelopment Districts) to become more engaged and aware of regional innovation strategies.”

• Regional innovation strategies require private sector engagement, cross‐jurisdictional collaboration, cross‐agency collaboration

• Constrained traditional resource environment requires similarConstrained traditional resource environment requires similar skills

• These skills are being built as part of wealth creation strategies supported by the Ford Foundationstrategies supported by the Ford Foundation

3

Outline for WebinarOutline for Webinar

• Intro to Ford Foundation’s Wealth Creation ApproachIntro to Ford Foundation s Wealth Creation Approach to expanding livelihood opportunities –Wayne Fawbush

• Exploring two tools behind this approach

– Value Chains

– Creating multiple forms of wealth

• Discussion – hearing from youg f y

4

Ford Foundation IntentFord Foundation Intent• To have a positive impact on high‐poverty communities in

l A i b i h l h irural America by using a systems approach to wealth creation

| Financial Assets| US, 20105

Why a Systems Approach?Why a Systems Approach?

• Systems approach connects practitioners at the community y pp p ylevel and makes resource providers more effective by focusing work on common goals.

| Financial Assets| US, 2010 6

Questions we are ALL asked/askingQuestions we are ALL asked/asking

• What do we actually do?What do we actually do?

• Where do we find the

resources?resources?

• How will we know if our

work is successful?work is successful?

• Who will actually benefit?

• How is the effort• How is the effort

sustained over time?


Characteristics of Ford’s WorkCharacteristics of Ford s Work

• Focus on regionsFocus on regions

• Invest in clusters of people and organizations working on the groundworking on the ground

• Build stronger value chains

• Create and measure multiple forms of wealth

8

Focus on regions


Invest in clusters of people and organizationsorganizations


Build stronger value chains

production aggregation

retail


Create and Measure Multiple Forms of Wealth

Type of Wealth Strategy

Forms of Wealth

Individual How will your strategy impact the stock of skills and physical and mental healthiness of people in a region?

Social How will your strategy impact the stock of trust, relationships, and networks that support civil society?

Intellectual How will your strategy impact the stock of knowledge, innovation and creativity?

Natural How will your strategy impact the stock of unimpaired environmental assets in a region?

Built How will your strategy impact the stock of fully functioning constructed infrastructure?

Political How will your strategy impact the stock of power and goodwill held by individuals, groups, and/or organizations?

How will your strategy impact the stock of unencumbered monetary assets at theFinancial How will your strategy impact the stock of unencumbered monetary assets at theindividual and community level?


Guiding Principles of a Wealth hCreation Approach

• Wealth is created and “sticks” in low wealth rural areas.• Wealth is tied to place by value

chains developed within sectorschains developed within sectors.• Wealth‐based development

is demand driven.• Measurement is integrated into

the entire process.• Investment fuels wealth creation.Investment fuels wealth creation.• Strategically flexible while

doing no harm.


Key Value Chain Lessons f d’ kfrom Ford’s Work

• No single organization can do this work alone –No single organization can do this work alone requires collaboration

• Sustainable development requires asking a simple p q g pquestion – what do we produce here that is in demand in other places?

• An effective tool for making that connection is a value chain

• How you work to build that value chain does make a difference

14

What is a Value Chain?What is a Value Chain?

• Compared to “Supply Chain” – Value Chains emphasize relationships among the participants in the chain, from producers to consumers

• Healthy Value Chains – provide social and economic benefit to all players in the chain while providing greater protection for ecosystems and naturalgreater protection for ecosystems and natural resources; “win‐win”

• Process – bringing people together across the value• Process – bringing people together across the value chain so they can see how their self‐interest can align with benefits to others along the chaing g

15

Value Chain ExampleValue Chain Example

Proposed Solar Value ChainMayor –

Electricity Consumers

Cotton PlantMayors –

Delta towns

Solar Farm owned by

City of Cotton l

Entergy CorpAR Rural Electric

Coops

in Cotton Plant

Plant, AR

AR D t f Financial

AR Renewable Energy Assn

AR Dept of Energy

Financial Partners

Stellar Sun

alt.ConsultingArkansas

Ground Connection

16

Value Chains as a Tool for LDDsValue Chains as a Tool for LDDs

• Focuses on building supply in response to demandg pp y p

• Intentionally connects rural and urban places in a region, creating stronger relationships in support of development

• Links lower wealth and higher wealth individuals/ organizations and regions, creating opportunities for investment along the value chain, particularly from the g , p yprivate sector

• Focuses on assets defined broadly, including the / i f l hi i l l huse/preservation of natural, historic, cultural assets that are

so important in many rural regions

17

Investing in Value ChainsInvesting in Value Chains

• Once you’ve articulated a value chain that offers potential in your region, engaging people across the chain requires identifying value propositions

• Different way to partner – not asking them for something but offering to help them achieve their goals – Why would a low‐wage employer in Savannah partner with a social service

provider to help employees access services? reduced absenteeism, lower turnover rates increased productivityturnover rates, increased productivity

– Why would a rural outsourcing company invest in workforce training program at a community college? access to skilled workforce, increasing the pipeline of skilled workers

• Value chain becomes a way to attract new investment to a region –engages the private sector, driven by external demand, driven by finding that “win‐win”

18

Creating Multiple Forms of WealthCreating Multiple Forms of Wealth

One of the principles behind Ford’s approach is intentional p p ppfocus on creating (or at least not destroying) seven forms of wealth – Wealth Matrix

C f thi h I ’t it h d h t d Cons of this approach – Isn’t it hard enough to produce economic benefits in most rural areas from community economic development efforts?

Pros of this approach – If you are clear about value propositions – and alert to defining them – creating economic benefits (and financial wealth) can happen at the same timebenefits (and financial wealth) can happen at the same time that you are building social capital and taking care of the environment, for example.

19

e.g., Solar Value Chaine.g., Solar Value Chain

• Financial – Fees to town from electricity sale– Income from installation and maintenance jobs

• EnvironmentalEnvironmental– Increased clean energy use by utilities

• IndividualNew skills for local residents trained to do solar– New skills for local residents trained to do solar installation and maintenance

• SocialN f ki h h b fi f– New way of working together to capture the benefits of producing clean energy in Delta communities – model of other communities

D N H P i i lDo No Harm Principle20

DiscussionDiscussion

• What do you see as the potential for value chain y pdevelopment in your regions? Where do you see your organizations fitting into a value chain?

• What are the sectors that show the most promise• What are the sectors that show the most promise for value chain development?

• How do you see the work you are doing alreadyHow do you see the work you are doing already contributing to the creation of multiple forms of wealth?Wh d h h ll b ildi• What do you see as the challenges to building value chains and focusing on wealth creation in your regions?y g

21

Contact InformationContact Information

Deb [email protected]

www.energizingentrepreneurs.org

Wayne [email protected]/wealthcreation.aspxwww.yellowwood.org/wealthcreation.aspx

22

Rural Wealth Creatoin

Documents

Transcript of Rural Wealth Creatoin