As I drive through my city, I see that almost all of our economic development eggs have been placed in one basket. This basket- healthcare, and particularly one firm- is historically considered safe. But what would happen if, suddenly, the market upended? Do our local officials understand enough about the market built around the one gargantuan firm dominating our area to plan adequately? Do they have a plan for what would happen if the healthcare regulatory environment changed and the market nationally was freed up? Would the dominant firm be unaffected, and would our job and tax picture stay the same?
Admittedly, a crippling blow to this industry, and this firm, is a low-probability risk. But low-probability is not no-probability, and it’s hard to watch a city once again throw its entire weight in a single industry, if not a single entity, like we did with our now nearly-nonexistent rail industry. We’ve got to learn from our past, and at the very least we need to start entertaining a discussion on economic risk planning.
Economic risk planning, or evaluating localized economic networks for their potential weak zones and areas where they could lose jobs, tax revenue, or whatever metric a city values in its development, is often overlooked, likely because it can be absolutely terrifying. Across rural America, especially, where resources are thin and opportunities often thinner, it is easy to overlook or avoid. Nobody wants to paint a bleak picture, even when that picture has to be painted before positive growth can be kickstarted.
This reality is especially unfortunate because economic risk planning is just as valuable and meaningful, and should be just as obvious, as risk planning in cybersecurity, disaster relief, and supplier management across the commercial and government world. It has its apparent benefits- being ready for actual disaster, for one- and ‘hidden’ wins, such as opening opportunities for useful thought exercise and creative thinking.
It may be scary to plan through the scope of economic disaster, but starting the discussions around ‘what-ifs’ are almost always guaranteed to be incredibly productive. Not only will a city be better prepared when and if disaster does strike, they’ll certainly find linkages, nuances, and facts about their own area they never would have learned otherwise. What could we do with a newfound depth of knowledge about our areas?
Plan against our economic risks, for one. But the possibilities are nearly endless.