A “New” Idea on Jobs and the Economy: Go Local

We know from polling and focus groups that the Administration’s basic message on the economy (where’s the love America, we got you out of the economic ditch with one hand while fighting with the Tea Party on the other) is not cutting it.   The current Obama call for more roads and bridges infrastructure and long-term R&D also leaves Americans flat.  I gather the President may get a taste for that on his bus tour this week.

So what to do with grumpy voters and a dysfunctional Congress?

The Administration said yesterday that it is looking for “new” ideas.  That’s a pretty high bar -- so let me instead offer a new lens given the on-the-ground realities we see out there as our Next Economy Partnership Project interviews entrepreneurs, voters and community leaders about what’s missing from the debate on Washington.  

The answer is simple: Go Local.   The solutions we need for job creation are bubbling up in communities and the public strongly supports a national job creation strategy, implemented locally and bottom up.

While voters are skeptical that government spending alone creates jobs, they know it plays a key role in attracting private capital to create new industries like the Internet and clean energy. 

Through this new lens, the welcome role of the federal government – and Presidential leadership -- is to help local communities build on their unique competitive strengths, and the current top-down nature of federal infrastructure, economic development, and workforce programs aren’t doing the trick. 

In essence, just as we need a smart macro strategy to accelerate private investment we need a new “micro strategy” to catalyze 21st century business growth. 

Here’s the funny part: the more we describe to voters what this will involve in nerdy detail – from investing in new “innovation infrastructure” to creating low-cost mechanisms like community job creation councils that give citizens a seat at the table -- the more excited they get that we are moving in the right direction.  

So how can we go local, do more for less and build the new partnerships and mechanisms we need to drive our economic recovery now, much like the WPAs, TVAs and so on did in the 1930s?

1-    Animating Idea: “Regions Rise Together” -- Not “Race to the Top”

By allowing local communities and states to best decide their needs, the federal government can focus on the overall results a program is supposed to deliver.

Nothing will pass in Congress now, but come 2013, it is clear that there will be a group of bi-partisan Governors and business leaders who will want to move towards new performance-based government and flexible block granting of their money.  Forget time-consuming grant competitions for small amounts of experimental funding programs designed by Washington bureaucrats.  What we need is a new Acceleration Agenda.

Picture this: a new generation of post-partisan leaders will want to bundle what few federal resources are left (for workforce training, infrastructure, economic development, energy investment etc) and create the outcomes they want to create jobs their way.   Interested regions will petition the federal government to get more flexible funding and fewer mandates, and the competitive value of the “race to the top” concept can be offered up as bonus funding for those that deliver on their promises – not a zero-sum competition pitting states and regions against each other.   

2- Federal Role In The New Framework: Catalyze and Certify What’s Smart

We can boost up bottom-up economic success by lifting up the small business owners, the Governors, the Mayors, the innovators and other community leaders who are busy pouring the wet cement on a new American foundation, beyond Pennsylvania Avenue.

How?   Encourage regional infrastructure planning, collaborative best practices and public-private partnerships designed to accelerate bottom up innovation and replicable local success stories.  Innovation zones could then get certified for special support or funding based on such factors as:

•    Completion of collaborative business plans with wide community involvement
•    Presence of public-private partnerships
•    Smart sustainability project investment criteria.
•    Locally-sourced manufacturing that focuses on local suppliers

There are a number of small programs already advancing aspects of this vision that the President can cite: such as Startup America and the Jobs and Innovation Acceleration initiative.

3- Redefine 21st Century Infrastructure: Not Just Roads and Bridges -- New Innovative Mechanisms

We currently spend over $140 billion on federal economic development programs that are very top-down, stove-piped and inflexible.  We could do more for less if we gave communities and regions more flexibility to invest in what they though they needed to spur local job creation -- and tied it to results.

Some ideas to reform economic development and empower local communities include:

•    Local job creation councils -- Groups of local business people and civic leaders come together to steer federal funding to local priorities in designated Growth Zones and self-identified clusters while meeting clear accountability and performance goals. Such local community councils are better able to deploy local assets and overcome partisan gridlock.  

•    Solution centers -- While web applications and open data are critical advances we are seeing emerge from the Obama administration, sometimes (like those Esurance ads) people need intermediaries (translation, a human). One stop centers for federal and state economic development would offer direct frontline connections and support ranging from rural and small community loans (USDA), to free entrepreneurship training, to new SBA programs targeting the equity needs of small businesses and startups that deliver two-thirds of net job creation.

•    Innovative finance and flexible federal funding -- By allowing local communities and states to best decide their needs, the federal government can focus on the overall results a program is supposed to deliver. The newly proposed BUILD Act, which is designed to leverage private capital to dramatically reduce the taxpayer costs of infrastructure projects and spur state infrastructure banks like California’s Infrastructure and Economic Development Bank, is a perfect example.  

Summing Up

No one has a magic bullet to turn around an economy with 14 million unemployed, 14 million homes underwater and 46 million American on food stamps.

But voters of all political stripes believe that a national effort to accelerate smart local job creation strategies and build out the missing bottom up implementation mechanisms we need to raise our economic game in the 21st century infrastructure is the right path.  Bi-partisan business leaders are on board, as are Governors and Mayors. 

Instead of talking about how the stimulus saved America and focusing on what he and Congress might do, President Obama could find a warmer welcome in local communities if he painted a new picture of how the federal government intends to be a smarter partner with local business and entrepreneurs who are already creating the seeds of Economy 2.0.   This bottom-up approach was the hallmark of his campaign.  Now it’s time for it to the hallmark of his Administration.