Collaboration and Leadership is Key According to Federal Reserve Bank Study

New York Times Columnist, Thomas Friedman recently wrote, “Now we have record productivity, wealth and innovation, yet median incomes are falling, inequality is rising, and high unemployment remains persistent.”In the new economy, there is global competition for jobs and innovative technologies are replacing positions in manufacturing and in the professional ranks as well.

The Federal Reserve, Collaborative Leadership and Jer. 29:7

In the midst of all this change, we are called to “Seek the peace and prosperity of the city to which I have carried you into exile. Pray to the Lord for it, because if it prospers, you too will prosper.” Jeremiah 29:7

When the Federal Reserve studied the way cities prosper economically, they found that the key is not geographic location, industry mix or demographic composition. The key to prospering economically as a city is collaborative leadership.

In a Community Affairs Discussion Paper “Reinvigorating Springfield’s Economy: Lessons from Resurgent Cities” authored by Boston Federal Reserve Researchers, Yolanda K. Kodrzycki and Ana Patricia Muñoz studied 25 mid-sized cities from 1960-2009. Most of these had populations between 100,000 and 250,000 during the period of 1960-1980, although some were larger in 1960 before shrinking in population. They identified 10 resurgent cities that were doing better than the rest according to the following criteria:

  • Median family income
  • Change in median family income ranking since 1960
  • Poverty rate
  • Percentage point change in poverty rate since 1980
  • Percent chang in population since 1960

“The most important lessons from the resurgent cities concern leadership and collaboration. Initial leadership in these cities came from a variety of key institutions and individuals. In some cases the turnaround started with efforts on the part of the public sector, while in other cases nongovernmental institutions or private developers were at the forefront. In all cases, the instigators of revitalization in the peer group cities recognized that it was in their own interest to prevent further deterioration in the local economy and they took responsibility for bringing about improvement. Regardless of who initiated the turnaround, economic redevelopment efforts spanned decades and involved collaboration among numerous organizations and sectors.”

The ten resurgent cities identified in the report were: 

  • Evansville, IN
  • Fort Wayne, IN
  • Grand Rapids, MI
  • Greensboro, NC
  • Jersey City, NJ
  • New Haven, CT
  • Peoria, IL
  • Providence, RI
  • Winston-Salem, NC
  • Worcester, MA