When developing a place-based strategy for a community or town, many challenges can arise. From regulatory challenges, to securing adequate financing, to establishing community trust and buy-in, to determining metrics for performance and evaluation, there is no shortage of footfalls as one strives to realize a place-based vision.
While each of those issues could be its own article, at a basic level, understanding business risk and diversification gives us the tools to recognize a well-built, functioning place-based strategy.
Business risk is “the exposure a company or organization has to factor(s) that will lower its profits or lead it to fail.” (Kenton, 2020) Risks can be from outside the organization or within it. We create business plans as the first step to identify sources of risk.
Diversification is a “risk management strategy that mixes a wide variety of investments within a portfolio” (Segal, 2020). The concept is to place value in different kinds of areas that strive-to, on-average, perform in a positive fashion and lower overall risk.
In 2010, Ann Markusen, now Professor emerita of the Hubert H. Humphrey School’s Project on Regional and Industrial Economics, collaborated with Ann Gadwa to a lodestone piece in the creative industry and placemaking. Their piece outlines the strength of the nation’s creative sector and its synergy with the design sensibilities of placemaking. They note how placemaking has nudged a shift from the monolithic arts organizations of yesteryear to diverse, multi-pronged arts strategies.
While there are several reasons that participatory, citizen-involved efforts also benefit the arts, for the moment there are lessons to for those of us looking to build placemaking ecosystems in our communities.
By drawing multiple parties in, we diversify the risk of emerging ventures. If one part of the strategy falters, another can step-in. Diversity of a strategy also belies large participation. Imagine each of part of your strategy as small, contained business models – hundreds may exist on a single street. That statue on the edge of Main has an underlying value model, even if not a formal business. It is an asset, it must be maintained and so forth.
One example in South Dakota is the Washington Pavilion of Arts and Science located in Sioux Falls. It is a wonderful cultural asset to our state and region. That said, if one were to map the assets of Sioux Falls and begin formulating a placemaking strategy, it would not be wise to look at the relative size and budget of the Washington Pavilion and assume its role in a strategy should be proportional. Rather, we would look to assemble a broad, diverse constituency, diversifying our risk. If the Pavilion falls into financial hardship or changes strategic direction, it does not cripple our larger plan.
So, be broad, vision-wide, and focus on multi-pronged, diverse strategies that work to a common goal. You alone, or your organization, or even your multi-million-dollar arts center, is not a placemaking strategy. Gather your crowd and chart a course. The diversity and complexity of your systems could be the difference between a short-lived project and one that will sustain.
For a full description of placemaking, feel free to reference What is Placemaking?.