Economic development: Putting the pieces together

Ever wondered who’s in charge of economic development in Asheville and Buncombe County? It’s a good question, but the answer is not so simple.

In fact, there are literally dozens of players—some big, some small—that help shape the area’s economy. They include governmental agencies such as the city’s Office of Economic Development, quasi-governmental agencies such as AdvantageWest and the Land-of-Sky Regional Council, and nonprofits that run the gamut from the Asheville Area Chamber of Commerce’s Economic Development Coalition for Asheville and Buncombe County to Mountain BizWorks to HandMade in America. And even that just scratches the surface. Numerous other players—such as A-B Tech and UNCA, not to mention community-based financial institutions such as the Self-Help Credit Union—also fill key roles.

All of them have vital parts to play. But as Asheville and environs grow, it becomes increasingly critical that the various players know one another, what their roles are—and, most importantly, how they can collaborate and sync their diverse agendas to ensure that local economic-development efforts remain strong and effective well into the future.

That’s the idea behind a new study that aims to identify, organize, coordinate and help focus the region’s assorted economic-development organizations. But it’s just the start of a broader effort to get all the puzzle pieces in place and create a coherent blueprint for the future. The long-term goal is to create a sustainable economy that plays to the area’s strengths in the arts, health, tourism, entrepreneurism, agriculture and technological and commercial endeavors in such rising fields as climate and environmental sciences and advanced manufacturing.

The $55,000 Economic Development Organizations Study, created and funded by Buncombe County and the Asheville HUB Alliance, is being conducted by the University of Central Arkansas’ Strategic Growth Institute, assisted by the Washington, D.C.-based International Economic Development Council. Together, they’ll assess the total framework of the area’s multiple economic-development organizations.

The study, says HUB Executive Director David Brown, will recommend specific measures and strategies to improve these groups’ effectiveness and ability to work together. And its evaluation of the current situtation in Asheville/Buncombe County and analysis of national “best practices” will form the basis for future recommendations by the county and other HUB Alliance members. Once the study is completed (sometime in September), Brown will help facilitate a consensus-driven process to further refine the recommended model and develop an implementation strategy, he says.

“All of these groups have set their individual agendas. They all have advisory committees, they all have boards, and they can obviously have more effect if they share in and support each other’s agendas,” Brown explains.


What bad times? Asheville Metro Business Research Center Director Tom Tveidt and his staff have just released newly compiled economic data for the region. And despite the very tough times being seen in many parts of the nation, the date suggests that the Asheville metro area (Buncombe, Henderson, Haywood and Madison counties) continues to buck a number of trends.

For starters, the annual home-appreciation rate here stood at 4.5 percent through the first quarter of 2008, says Tveidt. That surpasses the state’s 4 percent pace and the nation’s overall 0.3 percent decline, he notes. The figures, released by the Office of Federal Housing Enterprise Oversight, rank Asheville 40th among all 273 metro areas listed by the agency, in terms of one-year appreciation. Asheville has the fifth-highest annual appreciation rate among the state’s 14 metro areas. And its five-year appreciation rate (51.5 percent) ranked third in the state, topping the N.C. (31.9 percent) and U.S. (38.9 percent) rates.

Meanwhile, despite the slow pace of job growth through the first four months of 2008 in both the nation and state, employment in the Asheville metro area is up by an average of 3 percent. That translates into slightly more than 5,000 net new jobs over the past year. By contrast, the state is up 1.5 percent and the nation 0.5 percent. In fact, Asheville’s current pace is well above its average annual growth rate over the last decade (1.4 percent). As the summer tourist season heats up, however, most new jobs have been in the relatively low-paying hospitality sector, according to the N.C. Employment Security Commission.

Although it sheds no direct light on current economic reality, the latest available data shows that exports from the Asheville metro area rose to $664.9 million in 2006, up 12 percent ($72.8 million) from the previous year. According to information released by the U.S. Department of Commerce, the largest product group was machinery, accounting for about 35 percent of local exports. Other major export groups include paper, electrical equipment, transportation equipment and textiles.

“One of the first objectives of the study is to enable the separate agencies to collaborate even more than they have been in the past,” he says. “The second objective is to encourage those agencies to collaborate on issues related to the ‘new economy’—issues that are probably best reflected in the HUB’s vision plan.”

That spirit of collaboration has become the new paradigm for the city’s Office of Economic Development, says OED Director Sam Powers. The new trend veers away from competition and toward enhanced cooperation and network building, a defining feature of the so-called “second-curve” economy.

In the “first-curve” economy, hierarchical organizations focused on managing costs dominate. In the second-curve economy, business models focus on creating networks and value webs.

As Henry Chesbrough notes in his book Open Innovation (Harvard Business School Press, 2003), the old industrial model of innovation has given way to this new network-building approach. These developments carry profound implications for regional economies. Regions that have thick, open networks will be more prosperous, Powers predicts: They will learn faster, spot their opportunities faster, align their resources faster and act faster.

Powers’ office, he says, “is taking our lead from open-source development, an effective innovation engine developed in the software industry. Open-source development is based on voluntary communities of people contributing to common and often complex projects. The OED is actively working with numerous other regional organizations and networks to build quality, connected places to attract and retain our people, jobs, investment and innovative businesses.”

The current study aims to make that way of thinking and acting the new local norm. But that’s not to say that the transformation hasn’t already begun or that local groups are failing to collaborate, stresses Brown.

“We have to recognize that we already have substantial coordination of our economic-development efforts through the Economic Development Coalition,” he notes. “Our thinking is that our efforts are really quite good at this moment, but that we have the wind behind us. We’re highly rated on all the studies in all dimensions, whether that’s tourist destinations or places to move to or, indeed, even new jobs. We come out toward the top of most lists. So we have really been quite successful doing what we’re doing. However, the wise community takes that moment when things are going well, like now, and says, ‘How do we keep updating, keep modernizing to sustain this effort when we aren’t quite as high?’ I think [the study] is an important community effort, and I think we’re on top of it.”


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