Economic Development During Uncertainty
As the COVID-19 virus continues to spread, we are experiencing a level of heightened uncertainty that is generating a lot of questions, concerns and fears. In the midst of this, many thought/opinion-leaders are drawing comparisons to global tragedies from history. Surely, we can draw insights from these comparisons that help us comprehend what is happening now. Many are also using the information made available to them to make predictions about the impact of the virus on our social, economic and political futures. Our friends and neighbors reactions vary from the calm and rational to the full-blown conspiracy theory. Much of this activity is helpful, some of it is not. Misinformation abounds and it isn’t just contained to social media platforms.
During these times, local and state governments face a number of pressures for action. The most immediate pressures are, of course, concerning public health and safety. At CivicMinded, we are not experts in public health or epidemiology, and we encourage everyone to give thoughtful and serious attention to the information provided by your local public health officials. I, personally, have been exceedingly impressed with the valuable insights and information that has flowed from my own local public health agency, the Springfield-Greene County Health Department. The guidance they are recommending is clearly drawn from relevant expertise and is well communicated. I am grateful for their service to my community.
There are other functions of local government that do not have direct responsibility for managing the spread of a communicable disease, but do have direct and indirect impacts on a variety of other important aspects of community that remain vital during and following this period of time. Of particular interest to me are those functions relating to economic development.
As you are already, I’m sure, very keenly aware, the outbreak of COVID-19 has not only infected the bodies of those who have contracted the virus, but also the minds of many who have not. The global pandemic we now face is not only biological, but also economic. The economic reaction has not so much to do with the virus itself as it is to do with how we process the information about the pandemic in our minds. As you can plainly see in just a cursory review of market performance over the past several weeks, the minds of investors and consumers have changed drastically in response. The change in mind can be adequately characterized in a single word, fear. This fear, like the virus, is also communicable and has caused important changes in our behavior. It may be that not all of these behavioral adjustments are unhelpful, but in my experience fear never produces anything healthy, on balance.
As economic developers who are, presumably, to some degree responsible for securing economic health and activity for our communities, how should we respond? What actions should we take to shore up our economic development and our ability to prosper? No doubt, many economic development professionals are monitoring these conditions and are already lamenting the passing of the flourishing development activity of the past few years. Others may be wondering and speculating about the “economic impact” of the virus, anticipating declining revenue and capital investment in the vein of an economic recession. Those of us who worked in the field during and following the Great Recession may be recalling those events and translating them into our present situations.
While some of this speculation, if thoughtful and deliberate, can be helpful, I want to encourage us to adopt a mindset toward economic development in times of acute uncertainty based on the following tenets:
Do not let fear dictate your direction. Speculation about terrible impacts to your community’s marketplace will not help you avoid those impacts. If anything, they will hasten their arrival.
Remember that there is no such thing as a local economy. While your local community’s marketplace of businesses and consumers is special and unique, the economy in which it exists is at least as large as your metropolitan statistical area (and probably even larger). Think regionally and scan for opportunities to manage risk by sharing resources and information. Do not allow fear to push your community deeper into a competitive, zero-sum game mindset, as this will only fracture your capacity for sustained economic success.
Neither the virus, nor any particular economic outcome, changes the fact that your community is filled with people who have specific knowledge and interests that can generate prosperity. While economic recessions and depressions have been characterized by tragedy, they are also always the birthplace of many new and renewed ideas for productivity. These opportunities exist in your community, encourage people to seize them.
Focus on identifying and leveraging the capital you have access to right now. Lamenting reductions in capital investment will not cause them to return. Instead, focus on identifying capital resources that do exist, and are accessible to you right now, and leverage them for success.
Stay positive. This event will not be another Spanish Flu or Great Recession. It will be what we make of it. The COVID-19 outbreak will only define our economic development to the extent that we accept that definition and allow it to shape our response.
The COVID-19 outbreak has already hurt many people through its effects on those infected, but also in the hearts and minds of many who are not infected, but are worried about it. Being thoughtful, caring, and helpful is always important and this pandemic presents an opportunity to showcase the value of our enormous capacity to help each other. This opportunity exists not only within the scope of our public health agencies, but other public services as well.
Whether we fail or succeed in these moments, as in moments past and those ahead, will be determined between our ears. Stay informed, stay healthy, and stay helpful.
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