Four Insights on Engaging Businesses to Make Local Economic Growth Inclusive
Cities and regions across the country are facing challenges as the pandemic worsens, including insufficient affordable housing, inefficient public transportation systems, and inequitable access to employment and educational opportunities. Traditionally, the responsibility for addressing these barriers has fallen primarily to governments, with critical support from nonprofit and philanthropic partners. But these crises call for a deviation from business as usual.
Evidence suggests cross-sector collaboration can be a powerful way to address large-scale challenges. Businesses are often absent from cross-sector conversations, but they have unique ideas, resources, and influence that could contribute to impactful change. Rethinking businesses’ role in supporting inclusive economic growth that tackles barriers to opportunity for residents represents a paradigm shift in how governments and communities view businesses.
This shift is already underway, with urgent calls for businesses to help address inequity (PDF) and an increasing number of business leaders recognizing the need for a new level of engagement. Our new brief explores how meaningfully engaging businesses in collaboration with other sectors is playing out in practice. Observations from local partnerships across the country offer four insights on how local leaders—from government, to philanthropy, to the private sector, to the community itself—can better engage local business leaders in these efforts.
- Form follows function, and local conditions and needs should determine the most appropriate model. The structure of partnerships is driven by a combination of what currently exists, what’s needed, and what’s possible in a given community. Stakeholders can identify these conditions through questions about the local landscape, answered in collaboration with residents and other local leaders:
- What are the highest-priority issues, and who has a stake in them?
- How aware of and receptive to economic and racial disparities is the business community?
- What is the appetite of business leaders to invest in tangible actions?
- What are the strengths and weaknesses of existing cross-sector collaboration?
- What are the most-needed community assets?
- Strong champions can articulate businesses’ role in addressing inequities. Effective champions understand local inequities, know the unique role businesses can have in addressing them, and can identify where and how the business community can best contribute. Champions can help convince risk-adverse or skeptical stakeholders (such as board members) to leverage the resources of the wider business community and involve more than just handful of passionate CEOs.
- Business leaders may be more likely to support an agenda for shared prosperity if it is presented in ways that resonate with them. Adopting a focus on shared prosperity—that is, the inclusive economic growth of a city or region—reflects a departure from how most business leaders have seen their role and the role of the private sector in society. It’s important to speak the language of the business community, such as by building a locally relevant business case for shared prosperity, focusing on issues where private sector partners can add value, and that are aligned with business motivations (such as building talent pipelines), and securing “quick wins” that demonstrate the value of business engagement.
- Success metrics keep stakeholders engaged, reveal whether partnerships are having an impact, and hold partners accountable. Both at conception and throughout the engagement process, partnerships should know what their goal is and what sort of community they want to help realize. Success metrics create a “north star” to guide work, track progress, and ensure members are on the same stage about impact. As a rule of thumb, good metrics meet these three criteria:
- measurable (is there reliable data on them that can be collected?)
- meaningful (do they provide information on something partners really care about?)
- associable (is it reasonable to conclude that the partnership contributed to them?)
These insights may help local leaders launch and sustain business engagement to foster inclusive economic growth, but establishing a successful partnership requires time to build trust among members and other stakeholders, a clear and compelling shared vision, and business leaders’ willingness to engage on difficult topics they have historically avoided. For a growing number of public, private, philanthropic, and community leaders in cities across the country, this investment is increasingly worth making.
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