RVARC staff recently attended a training held by the USDA at the Greenfield Training and Education Center on new review processes for assessing the environmental impacts of USDA funded projects. This training followed adoption of a new set of environmental policies and procedures on the part of the USDA Rural Development Agency (the Rural Utilities Service, the Rural Business-Cooperative Service, and the Rural Housing Service) that went into effect on April 1st of this year. These regulations meet the requirements for the USDA to “assess and consider the impacts of proposed federal actions…to the human environment in accordance with the National Environmental Policy Act (NEPA), Section 106 of the National Historic Preservation Act (NHPA), Section 7 of the Endangered Species Act (ESA), and other applicable federal, state, and local environmental laws.” (RD Instruction 1970-B, Exhibit C)
The new rules can be found under code 7 CFR 1970, and replace previous regulations 7 CFR Part 1794 and 7 CFR Part 1940-G. The rules simplify the review process, bringing reviews for all services and projects under the same regulations. Recipients of assistance from the Rural Development Agency will find their project classified as following one of three review paths. Projects will require documentation in the form of Categorical Exclusions (CE), Environmental Assessments (EA) or Environmental Impact Statements (EIS). An applicant to a Rural Development program is responsible for consulting with agency staff to determine which track they should follow early in the process. They are also responsible for contacting relevant state and Federal agencies as appropriate. Applicants should be aware that the USDA environmental review process does not replace other required review processes at the state or local level, and should contact the relevant officials accordingly.
The USDA Rural Development programs offer valuable opportunities in the form of grants and loans to localities, businesses, and individuals. More information about their programs can be found here. RVARC staff is happy to provide more information to the public about the new review process as requested.
Coworking spaces such as the Grandin CoLab allow small businesses and startups to pay a monthly fee in order to use shared space within the facility. In many ways this is similar to an individual joining a fitness center. This idea is that business startups and home (garage) based businesses get to a point where it is not useful from a professional image or branding perspective to invite clients, partners or investors to meetings over the kitchen table or out in the garage anymore. A more polished business presence is needed in order to scale-up to the next level. This describes a target market for coworking spaces, however, what is really going on under the hood from an economic development and transportation planning perspective?
Essentially coworking spaces allow members to share the high fixed-costs that are associated with a nice, well-done commercial space in a central commercial location in an urban area. All businesses face two types of costs: fixed and variable. Startups may have heretofore dealt with fixed costs by running their business out of their home or garage. However, when it comes to graduating to a commercial space, the high fixed costs can be daunting for a small business which may not be able to easily get conventional commercial financing. Coworking spaces solve this dilemma beautifully with their membership model that shares fixed costs widely among many startups. This allows for entrepreneurial business development that otherwise might have been stymied by high fixed costs thus developing the regional entrepreneurial ecosystem.
Interestingly the observation that high fixed costs can have a dampening effect on entrepreneurialism and business creation dates back to the planning classic “The Death and Life of Great American Cities” by Jane Jacobs where she observed that one benefit of the so called “urban decay” of the 1960’s was that it kept rents (i.e. fixed costs) low so that small businesses would have a place to develop. Thankfully, coworking spaces are the exact opposite of “urban decay” and can provide high end and urban edifying amenities that can be affordable due to shared fixed costs in a commercially viable urban setting.
Coworking spaces also provide “Economies of Agglomeration” which is a fancy way of saying the benefits that a business gets by being near other businesses. This can can be thought of as crosspollination of ideas and/or as spillovers from businesses in close proximity being each other’s’ customers and suppliers. Essentially co-working spaces produce internal economies of agglomeration within the one building. And, the building itself can be located in a downtown or village center and member benefits can benefit from the next level of agglomeration effects that come from being in a mixed-use urban context.
As far as transportation is concerned it is precisely these agglomerating and concentrating effects of coworking spaces that encourage businesses to locate in urban areas where transportation already exists. This is in stark contrast to situations in the past where businesses would sprawl out further and further looking for cheaper rent. Also, the new transportation services such as car sharing, think Zipcar, ridesharing, or vanpooling which also benefit from users sharing the fixed costs of vehicle ownership are good complements to the coworking model. Such services as well as public transportation can be conveniently located nearby. Any dollar that an entrepreneur saves on transportation costs can be plowed back into growing their business.
Disclaimer – In this blog post I have specifically referred to a successful coworking space in Roanoke, Virginia called the Grandin CoLab (http://www.grandincolab.com/). The concepts are generalizable and would apply to any coworking environment. This post is not a public sector endorsement of one particular private coworking environment over any other.
There are a lot of opinions and some misconceptions about economic development out there in popular discussion. Economic development is very important. So, we should think through how it relates to transportation infrastructure. Many people think of economic development in terms of its historic roots in real-estate development. This is only a partial and incomplete picture of a dynamic and important topic. Essentially economic development has three interrelated components:
- Economic Efficiency – is necessary but not sufficient. This means that economic efficiency alone will not guarantee economic development. Many proponents proclaim that all you have to do is to cut out a regulation here or tax there, and you get economic development via increased efficiency. These “cut” approaches may be a good first step in cases of waste or economic distortion, but they will not necessarily guarantee growth or development. In fact, a status quo economic process that is seen as self-evidently “efficient” may suffer from a “rest on your laurels bias” and new improvements may not be pursued to a collective chorus of “if it ain’t broke don’t fix it.”
- Investments in transportation infrastructure may, on the other hand, help us become more economically efficient by allowing private sector businesses to reduce inventories, use just-In-time manufacturing approaches and better leverage logistics and supply chain efficiencies. Expanding public transit can also expand the labor pool for businesses by allowing people to get to work at an industrial park that was previously inaccessible by transit. Future automated and self-driving technologies, both passenger and freight, may have a big impact on improving economic efficiency. Along these lines, we can think of improvements in the transportation of information (i.e. broadband) as having a beneficial and complementary role to investments in physical transportation infrastructure.
- Economic Growth – is also necessary but not sufficient. Growth can come at the expense of quality of life or even economic improvement. It can be the result of everybody working longer hours and not having time for family or other pursuits. If inflation isn’t taken into account, growth can simply be the result of inflation without any real increase in goods or services. Like economic efficiency, real “inflation adjusted” economic growth can provide us the fuel we need to arrive at economic development. In this regard investments in transportation infrastructure can help us access national and global markets. One example involves pursuing a Small Community Air Service Development Program Grant to access a new air service hub such as Denver of Dallas from the Roanoke-Blacksburg Regional Airport. Another would involve developing a regional intermodal freight center to connect rail with trucks and service increased container shipments through the soon-to-be expanded Panama Canal to the Port of Virginia. This would allow us to take advantage of our geographic comparative advantages, which is a fancy way of saying further leveraging our strengths.
- New Process, Technology or Business Model Development – This is the “development” part of economic development, the secret sauce. This is where a new way of doing business or a new technology helps us become more productive. We develop new “strengths,” new comparative advantages and new industry clusters. This is often where standards of living improve. So how can transportation infrastructure help us with the “development” component of economic development? One idea is to promote the region as an urban test bed to test market new technologies such as automated vehicle systems. This would allow us to develop industry clusters around the new technologies and add new skills and strengths to a diverse regional economy. We already have the Smart Road down at the Virginia Tech Transportation Institute (VTTI). Why not extend that technology development cycle to position the Roanoke Valley as the live test bed for the next generation of transportation technologies?
So the next time that someone tells you that they have the silver bullet for economic development, you will know there is more to the story. Economic development takes long-term investments in transportation and broadband infrastructure, so that we can get to the intersection of economic efficiency, economic growth and new process development which is “Economic Development.”
A well-traveled public transit system can resemble a networking session at a conference. Plenty of opportunities for networking and information exchange.
Economic development relies on economic efficiency, economic growth and process/technology development. Typically, none of these three are sufficient in isolation for economic development, but all three are necessary to some degree or another in combination. Let’s take a look at each one in turn:
- Economic Efficiency – The neoclassical model of economics presupposes, among other things, that all relevant information for market decisions and market opportunity is readily and freely available. In the complex world that we live in this is easier said than done. This is especially true if we are isolated and alone for our commutes. Carpooling, vanpooling and public transit offers the possibility to network and make connections. You can think of this as your own mini-conference or business meeting on the way to work.
- Economic Growth – Economies can often grow when business and economic activity between suppliers and customers increases within a given geography. In general the ability for a business to capture benefits when it locates among other businesses is called “Agglomeration Economies.” When the supply chain relationships between numerous businesses are concentrated and well defined we often call them “Clusters.” Public Transportation can serve such industrial clusters by opening up a wider labor market to the businesses involved. Sometimes those who are in the market for a prevailing wage, let’s say $10 per hour for argument sake, live in another part of the urban area from where such jobs are offered. For instance, these jobs may be in an economic development or industrial park and job candidates may not have reliable transportation to get between the two. When this happens we say that there is a “spatial mismatch.” Public transportation can help businesses grow by addressing this spatial mismatch and delivering the employees that a growing business needs. Please see the recent RCIT/Blue Hills Transportation Survey Analysis Report for more on these topics.
- Process and/or Technology Development – The economist Joseph Schumpeter articulated the concept of “Creative Destruction” by which new business processes and technologies displaced older less efficient processes and helped lead to economic development through entrepreneurialism. New process and technology ideas often come about through deep reflection on experience and/or by the cross-pollination of ideas by people in different businesses and industries. Often the process is a combination of both in mutually-supportive economic environments. Public transportation can provide the time to read, reflect and think that is important to this process. This is easy to observe in large urban areas such as the Washington DC metro area where many catch up on reading or work on the metro. Likewise, public transportation can provide the fertile ground for the cross-pollination of ideas through networking and conversation similar to that experienced at a conference. Finally, public transportation can be a place of creativity in general as is being demonstrated in the ongoing “Art by Bus” project.
Who knew that public transportation could accomplish so much for economic development? The benefits can accrue even if you only carpool, vanpool or take transit once a week. A longer list of employer benefits can be found here.
Business books and business classes at universities focus on the importance of providing value to external customers and clients. Without customer value there is no business. In the transportation planning context providing value means focusing on transportation systems that get people to work, appointments and play. Economists call transportation a “derived demand” meaning that people use transportation to accomplish a primary activity such as showing up to work. In that sense, the transportation system’s ability to provide value to citizens rests in part on the Roanoke Valley continuously improving as a livable and dynamic place to work, do business and enjoy life.
In a separate and complementary planning effort, the Partnership for a Livable Roanoke Valley contracted with Virginia Tech to perform a statistically valid telephone survey of 1,030 citizens of the greater region. “Economic development, job creation and keeping jobs in the area” was the top priority of survey respondents with 92% of the 1030 respondents rating this as a regional top priority. The Livable Roanoke Valley survey a good proxy for estimating what citizens and stakeholders in our region value. In our development of the next regional long-range transportation plan, this means planning for transportation facilities and systems that:
- promote economic development – such as freight facilities improve business logistics and supply chain connections or bicycle and pedestrian facilities that are valued by knowledge workers;
- promote job creation – such at public transit services that expand the available workforce for businesses by providing access to employees who may not have been available without the service; and,
- keep jobs in the area – such as passenger rail facilities and services that expand access to customers outside of the region.
In short, transportation planning should focus on the concept of “Ladders of Opportunity” for individuals to access employment and services.
The Livable Roanoke Valley will have a summit on June 25, 2014 to capstone the multi-year planning process. Please plan on attending, more information can be found here: http://rvarc.org/attend-the-livable-roanoke-valley-summit-on-june-25th/
Please join us for a half day Summit to unveil the final Livable Roanoke Valley Plan. The Summit will feature a keynote address by Bill Shelton, the Director of the VA Dept. of Housing & Community Development and community leaders that have agreed to champion initiatives in the areas economic development, workforce, health, and natural assets. By attending to the event you will receive a bound copy of the plan, as well as a networking breakfast and lunch. You can view the completed plan and supporting information at www.livableroanoke.org.
7:30AM Networking Breakfast
8:30AM Welcome and Opening Remarks
Wayne Strickland, Executive Director of the Regional Commission
8:45AM Keynote Address
Bill Shelton, Director of the Virginia Dept. of Housing & Community Development
9:15AM Livable Roanoke Valley Plan – Strategies and Champions
Lisa Garst, Chair of The Partnership for Livable Roanoke Valley
10:15AM Featured Economic and Workforces Development Initiatives
High Speed Broadband – Kevin Boggess
Regional STEM-H Programs – Jonathan Whitt
Xperience – Thomas Becher
Industry Sector Partnerships – Zenith Hamilton
11:15AM Featured Health and Natural Asset Initiatives
Stormwater Banking Program – Mike McEvoy
Fruit and Vegetable Prescription Program – Brent Cochran
Alternative Transportation – Jeremy Holmes
Community Dental Clinic – Eileen Lepro
12:30PM Networking Lunch
Meet the Champions