ECONversation Explores Small City Economics
The Atlanta Fed's latest ECONversation was about starting conversations.
During the live August 24 webcast, Will Lambe, senior adviser on the Community and Economic Development (CED) team, discussed his research on the economies of small cities. Nearly 400 registered to view the discussion between Will and Charles Davidson of the Atlanta Fed Public Affairs department.
Lambe described the CED's Small City Economic Dynamism Index. The index ranks 245 metropolitan areas with populations between 50,000 and 500,000 on 14 measures of demographics, economics, human capital, and infrastructure. The South is home to a larger number of such places than any of the other three census regions, Lambe pointed out. And a bigger share of the South's population—about a fifth—lives in small metro areas.
New tool analyzes philanthropic investing
Lambe and Mels de Zeeuw, a research analyst in CED, built the index. They continue to meet with community leaders throughout the Southeast to spur conversations centered on two issues. One, where economic momentum is strong, they focus on trying to help ensure that growth and development create opportunities for all segments of the population. Second, where economic momentum is weaker, they discuss strategies to help attract investment and create demand for housing and locally produced goods and services.
Investment from philanthropic organizations is often critical, especially in distressed communities. To better understand where philanthropic dollars flow and do not flow, and why, Lambe, de Zeeuw, and Keith Wardrip of the Philadelphia Fed are developing a tool called Following the Money.
The tool will be formally released next month. So far, that research has found that in drawing philanthropic money, small cities tend to be at a disadvantage compared to larger metro areas that are home to more nonprofits. However, Lambe said he and his colleagues found that poorer areas generally attract more philanthropic investment than more affluent communities.
Capital from foundations and other nonprofits can be important because those investors generally take more risks than public entities and for-profit investors, Lambe said. So philanthropic funders can attract other dollars and test new approaches to community development finance.
Following the Money and the Small City Economic Dynamism Index are rich with data and other information. However, there are no simple answers to ensuring that economic opportunity is evenly spread among cities and populations within cities. "We still have a lot of work to do to figure out how to effect change at scale in smaller cities and larger cities," Lambe said.