Learning from city leaders: building inclusive economies

This piece is part of the #Built4All Listening series. Read our other pieces on creating a dynamic market ecosystem, building public infrastructure, and closing the data and digital divide.

In March of 2020, the United States was at the end of the longest economic expansion in human history, lasting for 128 months. This 10-year period capped off several decades of tremendous economic growth, which lifted billions out of poverty and led to record improvements in health, literacy, nutrition, living standards, technology, and innovation.

When COVID-19 reached the U.S., however, a truth that was just below the surface came roaring to the forefront: the benefits of economic growth were not fairly distributed. The pandemic’s harsh economic shocks were felt more keenly in populations already at risk: Brown and Black communities, low-wage workers, and small businesses. The COVID-19 pandemic and resulting "K-Shaped" recession showed us how fragile the ‘wins’ of economic growth are for middle and low-income earners in the US. The summer protests of 2020, sparked by the murders of George Floyd, Ahmaud Arbery, and Breonna Taylor, were a further reminder that our systems were not designed equally for all Americans. Whether in enfranchisement, policing, or economic opportunity many U.S. institutions were intentionally designed for the benefit of the few to the detriment of the many.

Local governments have the power and scale to fight these exclusionary trends and build more inclusive economies through policy and initiatives; however, it can be overwhelming to tackle everything at once. It is difficult enough to create and execute an effective, comprehensive strategy to undo centuries of harm caused by exclusive policies. It is even more challenging to do so while responding to a global pandemic. To learn more about how local governments are thinking about inclusive economies, the challenges they’re facing, and what resources would be most helpful in overcoming those barriers, the Centre for Public Impact (CPI) launched a nationwide listening series with local governments.

Our approach

At CPI, we saw the stifling of individual economic mobility as proof of an imperative - and an opportunity - to reimagine our existing paradigms and address worsening instability and exclusion. In response to the dual crises of the COVID-19 pandemic and racial injustice in 2020, the Centre for Public Impact partnered with the Mastercard Center for Inclusive Growth to publish Built for All: A Global Framework for Building Inclusive Economies. 

The Built for All framework specifies 18 outcomes for philanthropy, business, and governments to reimagine and rebuild the economy for the flourishing of all people and the planet. Our Inclusive Economies team is always eager to go from insights to action, so we asked the experts and local leaders who are doing the work about their approach to economic inclusion and how we could best support them. During January and February of 2021, CPI’s Inclusive Economies team held 15 interviews with 30 public servants in local governments across the United States. 

Our goal with this ‘listening series’ was to understand city governments’ most significant roadblocks to building inclusive economies and explore how CPI and other changemakers can best support them. We focused on creating honest, reflective spaces (using visual sticky boards to make the experience interactive), and structured the conversations around answering the following research questions:

1. How do local governments decide which issues to prioritize when building an inclusive economy?

2. What are the greatest challenges or roadblocks local governments face creating inclusive local economies?

3. What resources do public servants need to create more inclusive economies? 

4. What paradigms do we need to change in order to move toward inclusion?

5. What are your ‘dream projects’ - programs/initiatives you would like to try but have never had the right resources/partnerships to do so? 

The outcomes governments are focused on

We first asked each interviewee(s) how their local government defined economic inclusion. 

As many cities iterated, it is difficult to work towards a common goal when you aren't aligned on a common definition of economic inclusion. We provided them with the Built for All definition and outcomes of an inclusive economy to align their team during the conversation, and hopefully create a common language surrounding economic inclusion moving forward.

Using our standardized list of Built for All outcomes, we asked interviewees to select which of the 18 outcomes aligned most closely with their current top goals or priorities. To dive deeper into efforts taking place within specific local governments, we also asked each city to walk us through an existing or planned initiative focused on one of these priorities. The most popular initiatives we discussed during the interview focused on the following outcomes:

Based on the voting results above, we were able to identify two overarching trends in city approaches and challenges: 

1. COVID-19 has hyper-focused local governments on making sure residents have access to the training they need for more secure, better-paying work.

2. Remote work has prioritized the outcome of, ‘Technology, data, and digital networks benefit everyone’. But cities are struggling to leverage data and digital to efficiently and effectively distribute public services and put solutions into action.

The barriers governments face: an overview

Alongside determining already-existing plans and approaches to building Inclusive Economies, we asked cities about the biggest barriers preventing or hampering their efforts. The results were illuminating: 

While not mentioned as key barriers, cities also flagged a number of additional challenges to building inclusive economies as being "very important". These include providing entrepreneurs with access to capital, resident access to quality education, government voice and authenticity, COVID-19, implementing digital technology, supporting residents to build individual and community wealth, low trust within government, the health of the local economy, and the ability to personalize and adapt best practices.

The barriers governments face: root causes

We further analyzed the barriers by theme, determining any underlying root causes that may be contributing factors. Ultimately, we landed on seven root causes that created or exacerbated barriers to building inclusive economies:

1. Risk-averse culture within government does not prioritize innovation or collaboration 

The most common barrier we heard was an internal one - a risk-averse government culture that makes it difficult to do things any way other than “the way it has always been done.” While we heard many root causes of this behavior, from incentive structures that reward ‘checking the box’ to lack of space for reflection on current practices, the result is the same - policy and program stasis that reinforces the status quo. Interestingly, this finding held true to a larger body of CPI work, our Fail Forward research, which suggests that when governments seek to improve their external impact, they may first need to look inward at their internal culture.

2. Historic exclusion from power has led to a distrust of government

Many interviewees also noted an issue of low resident feedback on programs and policies. Local governments are beginning to recognize and reckon with the fact that their power structures have historically prioritized the wellbeing of high-income white residents, often at the direct expense of marginalized groups. As a result, many governments today find themselves with a legitimacy deficit that must be remedied by restoring and earning trust from historically marginalized or underserved community members. Interviewees expressed a focus on addressing the injustices of the past and taking action to repair relationships with community residents.

3. Lack of coordination across stakeholders can duplicate or undermine efforts

Another common theme was the frequent disconnect between how various stakeholders thought about inclusive economic development. Inclusive economic development must enact protective measures for existing businesses and work to diversify the city's existing industrial mix in the long run. Existing economic paradigms, however, frame growth as a zero-sum game. This discourages strategy and data sharing within and across sectors and can result in disparities in education, workforce development, and economic development strategies that ultimately provide few accessible pathways to high-growth industries (i.e., good jobs), particularly for minority communities.

4. Structural and informal deterrents to coordination across various government levels

Interviewees also frequently spoke of bureaucracy and partisanship limiting collaboration across levels of government, ultimately further damaging trust and legitimacy with residents. Compounding this challenge is the nature of election cycles, resulting in inconsistent approaches to economic inclusion across mayors’ and governors’ terms. To successfully overcome these barriers, government leaders must articulate clear visions and openly collaborate with those of different viewpoints, experiences, and partisan leanings. 

5. Few bridges between social capital networks limit access to resources and innovative problem solving

A further theme we heard regarded social barriers to accessing resources, such as complex processes, lack of culturally competent and easy-to-read communications, and weak relationships between the government and the community. Decades of cronyism and prioritizing the perpetuation of privilege intentionally excluded BIPOC from building social capital within institutions with power. Many interviewees were excited about using the government as a connector to resources and a means to fill existing market failures, but were clear-eyed that they needed to build trusting relationships with both the communities they seek to help and the ‘exclusive’ institutions they aim to break into.

6. Inability to leverage data and technology to involve the community and evaluate programs and policies

The inability to leverage data and technology came up frequently as an important enabler (or deterrent) for innovation and change. As the world moved online during COVID-19, communities were pushed to make digital transformations earlier than expected. Cities are accordingly scrambling, but still seeing positive results including increased resident participation, breakdown of silos between departments, and improved access to government resources. A major area of uncertainty for cities in this new digital world was the best way to collect data and what, exactly, they should be measuring. A common insight from interviewees was that cities should intentionally collect and analyze community-centered data in order to understand the impact their work has on residents and identify areas where they can make targeted improvements according to needs. Key to these efforts is ensuring they are connecting with and collecting data from residents without access to the internet.

7. Balancing resources between immediate COVID-19 response and long-term goals

As one might expect, the unique challenges and shifted priorities resulting from COVID-19 was a frequent topic of discussion. A consistent takeaway was that COVID-19 exacerbated the existing needs of residents, particularly the needs of those who were already disadvantaged, such as Black and Brown small businesses. Another theme was the need for speed: the importance of going from new ideas to implementation quickly was a much larger concern than previously. Looking ahead, cities were frequently concerned with how to get “back on track” with some of their long-term improvement projects, which had been put to the side during the pandemic. 

Cities also recognized the opportunity for major systemic change, one of the bright spots of an extremely challenging time. However, cities are unsure they can act fast enough to take advantage of the opportunity to make systemic changes. According to interviewees, the recently passed American Rescue Plan aims to enable cities to use this moment to reimagine how they interact with and support residents and each other.

The barriers governments face: a regional comparison

To determine if there may be any geographic trends that could be predictive, we also examined data by U.S. region. Click the pins below to learn about regional trends and contribute learnings from your city (inputs from cities outside of the U.S. are welcome!):

Work in city government? Add your experience to this map by inputting your information here! (Map last updated 5/20. Total responses: 30)

In addition to these specific regional focuses, we also found certain themes were a common area of focus across regions. Especially during COVID-19, when reaching residents was essential to administering tests and vaccines, local governments struggled to tell the story of how they’re meeting the challenges of today and working toward a better future. Further, as our previous research has shown, cities across the nation confirmed that no region is immune from the mix of political will and gridlock that decreases legitimacy and trust.

What helps? Assets and resources helpful for building inclusive economies

In addition to identifying the focus areas of local governments and the challenges they faced, CPI also sought to understand which resources have been the most helpful to their initiatives. Overall, the answers reinforced the importance of supportive relationships, strong leadership, and the ability to discuss and test ideas.

Encouragingly, some of these answers are direct corollaries to the above barriers, showing that some cities are already finding ways to overcome them.