Equation for Economic Recovery
By Laura Lewis Marchino
The COVID-19 pandemic-related economic shock is new for all of us, but its impacts have similarities to past economic crises. There is a 2017 book, Coping with Adversity: Regional Economic Resilience and Public Policy, that assesses over 1,500 disasters between 1978 and 2014 and how impacted communities responded. This includes events such as the downturn of the steel industry, the Great Recession, the 1980s savings and loan crisis, and numerous weather disasters.
History suggests that economic shocks are unavoidable. Look at our own state: the decline of mining /energy industries, manmade disasters like the Gold King Mine Spill in San Juan County, weather events like floods, drought, avalanches, and the ongoing wildfires.
The good news is there is no “secret sauce” for economic recovery and it is based on core economic development practices.
When studying those 1,500 disasters, researchers looked at how each community recovered and what common components were present in the communities that were the most successful.
Recovery = T + I + E +BRE or Recovery equals talent plus infrastructure, plus entrepreneurship, plus business retention/expansion. This equation is the formula for economic recovery and resilience success.
Talent development was important before COVID-19 and will continue to be so. Recovery occurs when talented people build/rebuild great companies that generate new jobs and new wealth for a community. This means that continued and expanded investments in workforce and education programs are essential. Yes, there will be new ways of working such as more remote workers, and according to the Colorado Demography Office, recruiting remote workers is now a top focus for rural counties throughout the country.
Entrepreneurship is also key in the recovery equation. Can someone who wants to live in our community find a job, and if not, create their own? Many communities have co-working spaces, accelerators, incubators, and the business support tools to grow their entrepreneurial landscape. In today’s changing world, jobs are following people rather than people following jobs so easing the transition to open and grow a business is critical. Post COVID-19, this means assisting with ownership transitions. Many business owners, primarily baby boomers, are thinking now would be a good time to retire. Instead of closing these businesses, we need to help new entrepreneurs take over. New owners tend to be more innovative, see new opportunities and have new ideas and energy.
In terms of infrastructure, the COVID-19 crisis has made it clear that broadband is the missing amenity and closing this gap needs to be top priority for any underserved location. Making sure there is affordable housing and strong education opportunities are also important.
Finally, there is business retention/expansion. In recovery we need to invest in strengthening local companies already in business. Small businesses are more likely than large businesses to fail after a major disaster. Existing businesses are already invested and committed to a community and it is cheaper to retain companies then to recruit new ones. If every business were able to support one additional employee, communities would see tremendous benefits.
Our rural region is already resilient but focusing on the Recovery Equation, based on 40 years of research, will help guarantee we will not only recover but be one of the regions that thrive.
