Stimulus funds poised to magnify impact of Economic Development Administration's new equity focus

Source: Smart Cities Dive | By Chris Teale

The EDA has for the first time prioritized equity in its strategy as it looks to invest in underserved communities and prepare them for the jobs of the future.

After a boost from coronavirus rescue packages, a federal agency is redoubling its efforts to invest in underserved communities in urban and rural settings and prepare them for the future of work.

For the first time since its founding in 1965, the U.S. Department of Commerce's Economic Development Administration (EDA) this year added equity to its investment priorities. Dennis Alvord, the acting assistant secretary of commerce for economic development, said the EDA will support a "diverse range" of activities with its grants to encourage an equitable recovery from COVID-19.

It comes after the EDA received $1.5 billion in supplemental funding from the CARES Act and $3 billion from the American Rescue Plan. Its budget is typically much less — in FY 2021 it was $346 million. It represents an exciting opportunity for EDA, Alvord said.

"[The extra money is] coming at a time where the need is really significant to help our communities bounce back quickly and to really do two things: put Americans back to work as rapidly as we can, but also build the foundations for long-term economic development and long-term economic growth in the country," Alvord said.

A new focus on equity

With COVID-19's uneven impacts highlighting disparities between communities, the EDA has renewed its commitment to work with those who have been left behind.

The administration said it will prioritize investments that directly benefit underserved populations, including women, Black people and other communities of color, or communities that have not enjoyed economic prosperity, like those on tribal lands and in high-poverty counties and rural areas.

"We're aware of the fact that even with our focus on economic distress, there are still populations and areas in the country that have not prospered evenly in the past," Alvord said. The projects EDA funds through its grant-making process to further that goal could be broad, he noted.

Already, the EDA has distributed $1 billion in grants from the CARES Act. Those funds have supported hiring economic recovery coordinators for communities, providing small business loans and making $4.2 million in infrastructure improvements in North Richland Hills, Texas.

"We're aware of the fact that even with our focus on economic distress, there are still populations and areas in the country that have not prospered evenly in the past."

Dennis Alvord

Acting Assistant Secretary of Commerce for Economic Development

The EDA has operated without authorization since 2008 but has received appropriations from Congress each year. The House Transportation and Infrastructure Committee's Subcommittee on Economic Development, Public Buildings, and Emergency Management held a hearing last month on reauthorization.

Alvord said reauthorization is necessary as so much has changed since 2008, especially how technology shapes communities and has contributed to a widening chasm between haves and have-nots.

Get smart cities news like this in your inbox daily. Subscribe to Smart Cities Dive:

Email: Sign up

"The nature of the economy has changed many times over that time period," Alvord said. "And we have seen once-thriving industries morph and change at times, we've seen a variety of new industries and companies come online that were not even in existence at the time of our last reauthorization."

The future of work

That focus on an equitable recovery will also include helping to prepare residents of traditionally underserved communities for the jobs of the future, Alvord said.

Preparing for the future of work has been a focus for communities that have been reliant on fossil fuels. For example, last November Pittsburgh Mayor Bill Peduto and mayors from Kentucky, Ohio and West Virginia unveiled a proposal dubbed the "Marshall Plan for Middle America."

Meanwhile, many cities outside the usual high-tech hotbeds of Silicon Valley and New York City have been positioning themselves as new homes for innovation and technology, including Cincinnati, Atlanta and Syracuse, New York.

EDA has already made moves to encourage workforce development. Earlier this year, it awarded $2 million in grants to boost local science, technology, engineering and math (STEM) talent and workforce readiness through its STEM Talent Challenge.

"Together, we can make regions outside of the established tech hubs more competitive, help bring high-speed internet to millions of Americans and create employment opportunities and infrastructure projects for communities that have been historically underserved," subcommittee chair Rep. Dina Titus, D-Nev., said during the reauthorization hearing.

A more diversified economy also helps communities be more resilient in the face of natural disasters and emergencies, Alvord said.

"If we look at the areas that are significantly impacted by natural disasters, many of them have very strong tourism-based economies, but they may not be highly diversified economies," he said. "If there are instances in which those natural disasters disrupt those economies, the entire base is undermined, whereas a more diversified economy may be able to bounce back more quickly."

Calls for more broadband internet deployment

Lawmakers and EDA officials agree on the need for greater deployment of broadband internet. The digital divide has been especially pronounced during the pandemic, which forced millions of people to rely on the internet to continue many of their daily functions.

The EDA will continue to play an important role in using its grant-making process to help fund projects around the country to help close the digital divide, Alvord said. For example, EDA provided $1.5 million to the New Mexico Department of Information Technology for technical assistance it will provide to government entities looking to expand broadband infrastructure and services.

"EDA has a very important role in helping to create the conditions to make sure that businesses have access to the broadband that they need, and that entrepreneurs have access to broadband so that they can spread new economic development initiatives and efforts," Alvord said.

During the administration's reauthorization hearing, Rep. Daniel Webster, R-Fla., said internet access is a major difference-maker, especially in rural communities.