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Investing in America: How Companies are Prioritizing Economic Development in the U.S.

Words by 3p Contributor
Data & Technology

By Whitney Dailey

Americans celebrated our nation this month with flags, parades and fireworks, but companies are showing their American pride in a slightly different way. The business trend over the past 20 years may have been focused on globalization and our increasingly connected world, but some companies have decided to concentrate on efforts a little closer to home.

Americans, more than any other global citizens, want companies to prioritize economic development, over issues such as poverty and hunger or the environment, according to the 2013 Cone Communications Cone/Echo Global CSR Study. U.S. citizens are also more likely than the global average to want companies to address quality of life locally (43 percent versus 37 percent global average) and nationally (38 percent versus 35 percent global average) over global issues (20 percent versus 28 percent global average). This all adds up to a strong message to companies to reinvest in the U.S. – and a few major companies are heeding the call.

Creating a stronger economy through entrepreneurship and education

A strong economy often starts with the basics – education and small businesses. In fact, small businesses employ more than half of the private-sector workforce, and many argue that an educated workforce can create a stronger economy.

To make sure America’s small businesses continue to be job creators, a number of organizations have reinvested in the “little guy.” Boston Beer Co.’s founder Jim Koch went back to his roots to help out other entrepreneurs when the craft brewery started the “Brewing the American Dream” program. The initiative provides training to entrepreneurs and micro-loans through Accion. The program has created or saved 1,900 jobs since its founding in 2008. Starbucks, another longstanding supporter of job creation in the U.S., raised more than $15 million with its “Create Jobs for USA” program, doling out small business loans in partnership with the Opportunity Finance Network.

As the U.S. continues to trend toward a more service-based economy, with 4 out of every 5 jobs resulting from service industries (e.g., telecommunications, financial services, computer services), the right education and job training are crucial. That’s why a number of organizations have invested in equipping the next generation with the skills to succeed in this field. STEM, or the fields of science, technology, engineering and math, has been a major focus and natural fit for a number of organizations, only reinforcing President Barack Obama’s $3.1 billion investment in STEM-focused job training.

At the forefront is Time Warner Cable’s Connect-a-Million Minds* initiative. The five-year, $100 million commitment recently achieved its goal of connecting 1 million students to hands-on math and science activities through grants, volunteerism and custom curricula. SAP and IBM have also invested in education programs to fill the 430,000 tech-related jobs that will be created in the next four years.

Greasing assembly lines and igniting innovation hubs

Beyond education and small business loans, companies are looking to manufacturing and innovation as ways to kick-start commerce. Walmart, a company with revenue representing 3 percent of the U.S. GDP, is looking to reinvigorate America’s assembly lines through a $50 billion commitment to purchase American-made products over the next 10 years. This is in addition to a new five-year, $10 million fund to provide grants to innovators seeking to create new "processes, ideas and jobs that support America's growing manufacturing footprint." Starbucks has also made commitments to spur production on U.S. soil, opting to purchase ceramic mugs in Ohio instead of abroad and building its own factory in Atlanta, Ga., to produce its Via instant coffee line of products.

Aiming to build the economy through new ideas and concepts, Cisco is working to ensure cities have the adequate infrastructure to promote economic growth. The Cisco Smart + Connected Communities program works with city governments to “use intelligent networking capabilities” to create more livable and innovative cities. Kansas City is the latest community to take part in the program, working with Cisco to transform the city into a lab for entrepreneurial development. Patagonia followed the entrepreneurial trend with its own in-house venture fund, distributing capital to startups with similar social or environmental values through the “One Billion and Change” program.

Insights into action: What companies can do to reinvest

Re-shoring” is the new business buzzword, with U.S. Secretary of Commerce Penny Pritzker stating, “There’s no better time to invest in the United States.” Economists have identified two driving factors for the move: proximity to demand and proximity to innovation. But there are other benefits to consider when investing in the U.S., including gaining crucial license to operate, as well as improving reputation and fostering trust among American consumers. Companies looking to zero-in on the U.S. economy can take a page from the first-mover playbook with these five tips:

  • Focus for Impact: Economic development can be a big pill to swallow. Focus your company’s impact in a targeted area within the economic development umbrella – whether it’s STEM education, micro-loans, creating smarter cities or something brand new.

  • Look in your Backyard: The easiest place to start making an impact might be in your company’s own community. For Boston Beer Company this meant targeting food, beverage and hospitality small business owners in the New England area; as the program gained traction, the company expanded to the entire U.S.

  • Make it Mutual: Investing in the U.S. economy doesn’t have to be a charity act. Savvy companies are investing in the American workforce, while planting the seeds for the next generation of educated employees, such as how SAP and IBM invested in tech education to fill the future employee gaps.

  • Consider Closer: Instead of defaulting to overseas options, consider comparable solutions in the U.S. during your vetting process. Beyond simply price, don’t forget to factor in other benefits for producing or sourcing locally, such as tax breaks, reductions in shipping costs and the ability to more closely oversee production standards. Understanding that business models and supply chains are complex, consider the value proposition of supporting local communities. It’s worth a second or third look.

  • Frame Your Story: Economic development is a big umbrella under which many companies’ social or environmental initiatives can fall. Think about the CSR work your company is doing already – whether it’s focused on health and disease, education or otherwise – and how it can be framed as improving the economic viability of communities or the nation.
*Cone Communications client

Image credit: Tony Cyphert, Flickr

Whitney Dailey is a senior research associate at Cone Communications on its Research & Insights team, where she works on the development and distribution of industry-leading research studies, including the 2013 Cone Communications/Echo Global CSR Study. Her expertise in corporate social responsibility, sustainability and social media helps to guide thought leadership at the agency as well as the creation of a number of CSR-related tools. Whitney has a personal interest in sustainable food systems, urban gardening and sustainable sites. She holds an MBA in Environmental Management and Entrepreneurship from the University of Massachusetts, Boston and a BA from the George Washington University. She tweets at @WhitneyDailey.  

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