October 5, 2011 Forum

Reinvigorating Neighborhood Economic Development

It’s said that all politics are local, and certainly, to some extent, the same can hold true for economic development—the community level is where it has its roots.  A compelling example of that formed the thrust of the second innovation forum in early October with discussion of the Evergreen Co-op Initiative, a job-creation strategy under way in Ohio that may find application in Atlanta.

Ted Howard, Steven A. Minter Fellow for Social Justice at the Cleveland Foundation, noted that Cleveland had seen its population shrink with regional decline of auto manufacturing, leaving some 60 percent of households unemployed or underemployed.  Further, economic development models hit a dead end, he said, noting that the recent real estate meltdown wiped out 25 years of effort.  Training programs produced skilled workers, but there were no jobs awaiting them because companies had closed or moved.  With buy-in from city government and anchor institutions such as the Cleveland Clinic and VA Medical Center, the Evergreen Co-op Initiative was launched in 2009 to address generational poverty, to create jobs, to narrow the wealth gap and to try a different model for economic growth, one that stands on community building and has leadership from poor neighborhoods as well as large companies.  “It’s a laboratory for a new kind of economic development,” said Howard.

The Evergreen Co-op Initiative, which focuses on the city’s Greater University Circle (GUC) district, was inspired by a model in Mondragon, Spain, a community that has seen much success in job/business creation, sales and investment, according to Howard, adding that several Cleveland civic leaders visited Mondragon to see the achievement first-hand.

Evergreen companies are owned by their workers, who reside in the GUC, and they are cost-competitive, said Howard.  “For this to work, it must be sustainable in the market,” he noted.  He concedes it remains a work-in-progress.  “We’re learning new things every day.”

The first enterprise was the Evergreen Co-op Laundry designed to serve the needs of area health care facilities, ranging from hospitals to clinics to nursing homes.  Another, Green City Growers, is an enclosed, 4.7-acre hydroponic greenhouse producing lettuce for local consumption.  A third, Ohio Solar, serves anchor institutions and weatherizes area homes.  Other possibilities include printing, recycling and data collection enterprises.  Workers earn a decent wage and receive health benefits, and all companies contribute a percentage of their profits to a revolving loan fund that helps new firms get started.  Emphasis is on “green” practices.

Long-term, said Howard, the effort would like to create 5,000 jobs, firmly anchor local capital, promote asset accumulation, stabilize neighborhoods and develop a replicable model for national impact.

The session’s discussant, Alicia Philipp, president of the Community Foundation for Greater Atlanta, reported that a year-and-a-half ago more than a dozen of her colleagues visited Cleveland to see what elements of the Evergreen Co-op might work here.  Subsequent discussions with representatives of Emory University, Piedmont Health Care and other large institutions, as well as entrepreneurs, venture capitalists and community leaders, elicited “a resoundingly positive response.”  Neighborhood stability is a very important factor, she added.  Atlanta doesn’t have the same geographical factors as Cleveland, said Phillipps, but it does have expertise in workforce development, an entrepreneurial spirit and available land.  “We can make this happen in Atlanta,” she said.

The Innovations in Economic Development Forum is presented each semester by Georgia Tech’s program in Science, Technology and Information Policy (STIP), a joint initiative of the university’s Enterprise Innovation Institute and School of Public Policy.  Free and open to the public, it brings together faculty, researchers, students, economic developers, and policymakers to discuss leading-edge ideas and practices in economic development and innovation policy.  For upcoming forums and videos and presentations from past forums go to the STIP website at stip.gatech.edu.