ARTICLE

Envisioning a Virgin Islands economic development strategy

What is relevant when producing an economic  development strategy?

A meaningful strategy is a visioning exercise that defines a community’s economic aspirations based on its values.

The strategy harnesses existing or realistic opportunities to available resources and pursues desired outcomes.  It considers those desired outcomes in the context of community values and aspirations.

No one person or even a small group of community members should try to define those aspirations.  The process requires bottom-up development.  Aspirations should represent the broadest possible expression of community stakeholders as well as engage the community in its development. Too often the process is highjacked by special interests and reflects limited community-wide subscription.  In these instances stakeholder groups as well as the community itself is unwilling to make the required commitment to see the strategy to fruition.

Stakeholders– government, various economic sectors of the community, civil society, community institutions and organizations—all need to be involved in defining what is in their respective and, by extension, collective best interest. Success is achieved when relevant stakeholders know they have a role in developing the final product. 

The action plan, the essential element of any development strategy, identifies specific goals that when achieved reflects success. 

The plan component, objectives, lays out the path that gets you to where you want to be.  The action plan, needs to be concrete, measurable and cumulative.  Component elements of the plan can and should be pursued concurrently.  Each addresses a specific objective. Individually pursued, these aggregate and address the longer-term ambition that the strategy outlines. 

Plans should not be static.  There should be an ongoing process that evaluates progress and makes changes to best address unfolding reality.  And, elements of the plan should be realistic and achievable.  Success provides the impetus to subsequently tackle more ambitious plans.

Another important consideration is having a circumscribed time period for the development strategy. The limitation of any visioning initiative is that it is done from the perspective of what is known. 

In the context of a strategy development, the term ‘long term’ may seem paradoxical because long-term thinking in this respect is at best 5-8 years.  Anything beyond that time frame is unlikely to be responsive to tomorrow’s needs.  The period visioned and addressed should, therefore, be long enough to allow for evaluating successes, but short enough that it only targets challenges and sets goals reflective of reality.    

Most action plans will also address needed capital investment in infrastructure.  Whereas the development strategy focuses on a more limited time horizon these capital investments represent truly long-term commitment of resources to community development, which go beyond a given strategy’s time horizons.  Investments in infrastructure are foundational and when well planned and executed benefit and support not only current but also future strategies and action plans. 

Finally, any effective development strategy must be actively managed.  With the passage of time ongoing adjustments and modifications will be required.  Understanding when changes  are needed increases the opportunity for successful outcomes. 

Active management also provides the community the needed eye on how effectively action plans are  implemented.  Management provides the community a vehicle that ensures challenges are addressed as these arise and that stakeholders are well informed.  Management, therefore, requires transparent processes and procedures for monitoring and addressing implementation as well as for timely communicating with community stakeholders.

Below are ten critical elements for developing a responsive economic development strategy.

  • Understand the strengths, weaknesses, opportunities and threats (SWOT) of the community
  • Identify and engage community-based focus groups to advise on draft statements of principles, which will help define the strategy and the related action plans
  • Develop statements of principles that address:
    • Community values
    • Business and industry
    • Desired and required community enhancements including social services
    • Infrastructure needs
  • Develop companion action plans tied to achieving particular objectives, each plan element being specific and having measurable outcomes.  These action plan elements should address:
    • Business and industry attraction, retention and growth
    • Workforce availability and preparedness
    • Community physical and social improvements
    • Government responsibility
    • Non-government stakeholders responsibility
    • Resource commitment (public and private)
  • Obtain community feedback on statement of principles and action plans
  • Obtain government executive and legislative buy-in
  • Designate lead agency for monitoring and reporting progress against plan
  • Designate a private/public oversight and management advisory board to oversee implementation
  • Define and promulgate monitoring and public communication protocols
  • Require transparency and consistency of reporting on progress and achievements

Specific to the Virgin Islands, strengths, weaknesses, opportunities and threats are previously identified in numerous recent analyses and below restated.

 

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
       
·      US Dependency ·      Limited land mass ·     Build off of existing petroleum storage facility presence ·      Natural disasters (i.e., hurricanes, seismic activity )
·      US law ·      High cost of potable water ·      Build off of existing distilled product manufacturing  ·      Government insolvency and related erosion of government services
·      Effective air transportation system ·      High cost of electricity ·      Build on nascent financial and management services industry ·      US tax law changes
·      Effective marine cargo transportation system  ·      Productivity of workforce ·      Exploit diverse and rich historical legacy in tourism product ·      US recession, depression, disinflation or inflation
·      Strategic geographic location ·      Small size of workforce ·      University presence and select research capability ·      Government imposed restrictions on air, cruise,  yacht  or ship movement
·      Adequate vehicular road system ·      Aging workforce ·      Access to US financial system and capital markets ·      Work actions impacting transportation providers (cargo, cruise and air)
·      Technology readiness– broadband connectivity and www. access •     Limited health care resources ·      Preference US/ USVI customs zone ·      Civil unrest and/or degradation of personal and property security
·      Telephone and mobile wireless connectivity •   Limited public transportation ·      Jones Act exemption ·      Inability to maintain responsive utility services (electric, water, waste management)
·      Private K-12 education  ·       K-12 public education system ·      EDC tax incentive program ·      Environmental degradation
·      University of the Virgin Islands and RT Park ·      Availability of affordable housing ·      Opportunity Zone financing ·      Banking failure or operating restrictions
·      Tropical climate ·      Seasonal hurricane exposure ·      Renewable and alternative energy production  
·      Population diversity ·      Seismic zone   ·      Product recycling   
·      Easy access to ocean sports and activities ·      Access to broad based arts and culture offerings     
•     Readily available, privately owned petroleum product supply and storage capacity ·      Small civic and community organizations, foundations, institutions    
·     Distilled product  production and storage facilities ·      Dependence on imports of food and consumer goods    
·      Competitive hospitality offerings ·      Absence of raw of intermediate products for use in manufacturing or production    
  ·      Cumbersome business regulatory environment    
  ·      Insufficient investment in infrastructure and economic development    
  ·      Ciguatera fish poisoning    
  ·      Cost of property and business insurance     
  ·      High cost of doing business     

Ensure the appropriate stakeholders are included in the plan development and implementation.

  • Education providers ( schools and university)
  • Health system providers
  • Public safety providers
  • Utility providers
  • Transportation providers
  • Community and non-profit organizations and neighborhood associations
  • Business associations including hotel and retailers, professional groupings, chamber of commerce
  • Government agencies
  • Media

Specific to the Virgin Islands, rigorously explore opportunities for growth and expansion in economic areas where the community has already made headway and are logical extensions of those areas or where the opportunity for serving local and regional markets exists. 

  • Tourism diversification (history, culture, boating, yachting, deep sea fishing, sports, marine adventure, ecotourism)
  • Visitor segmentation (regional and non-US based tourism)
  • Culinary arts and culinary services
  • Knowledge-based hospitality management services (consulting and outsourcing)
  • Recreation
  • Maritime services related to tourism
  • Niche technology sector startups and expansion phase businesses
  • Financial and business management services
  • Craft spirits industry
  • Domestic food production, animal husbandry and aquaculture (where economically efficient)
  • Light manufacturing advantaged by proximity to existing petroleum or distilled product production and storage and/or VI/ US Custom status
  • Regional transshipping intermediary services
  • E-commerce

Take stock of what the community offers or needs to offer to attract and/or retain a skilled workforce and by extension business and industry.

  • Safety
  • Education and work-force skill development
  • Environmental responsibility
  • Inclusivity of economic opportunity
  • Pride of place
  • Community identity
  • Arts & culture
  • History and architecture
  • Entertainment and sports
  • Supportive and more efficient business regulatory environment

The answer to what is an appropriate economic development strategy is most effectively answered by how that strategy is developed.  And, that process requires broad based community involvement, a realistic time frame, concrete action plans with measurable outcomes, commitment of resource to achieve defined end results, and effective and transparent management. 

 

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Home Forum Envisioning a Virgin Islands economic development strategy

Viewing 5 posts - 1 through 5 (of 5 total)
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  • #15484
    Justin Moorhead
    Keymaster

    A meaningful economic development strategy is a visioning exercise that defines a community’s economic aspirations based on its values.

    [See the full post at: https://underthemarkets.com/economic-strategy-action-plans-virgin-islands/]

    #15592
    Justin Moorhead
    Keymaster

    I was recently asked what prompted this particular discussion. It resulted from a proposal issued by the VIEDA soliciting proposals for an economic development strategy for the Territory. The studies requirements are extensive, which suggests to me that it will be awarded to a large consulting entity. There have been several relatively recent studies completed on the Virgin Islands. There is a wealth of information in these. A review and use of the data assembled by those studies (with some updating as needed) in the context of a broad locally developed consensus vision of where we the Virgin Islands want to be as an economic entity, will reduce time and cost and help produce the action plan we need.

    #15664
    Miguel Quinones
    Participant

    First of all I would like to thank the author for taking the time to develop a proposal and participate in the Under the Markets collaborative effort to lead the Virgin Islands into a better future. The author’s economic development strategy vision is comprehensive, very detailed, supported by past and current statistics, and very similar to the strategy I will propose. At this time, the VI EDA has selected “Camoin 310” to follow along a similar path to provide the services for an RFP for the development of the Vision 2040 Economic Development plan focused on the following 5 economic pillars: Services, technology, energy, agriculture, manufacturing. They intend to gather feedback from as many Virgin Islanders as possible, including the diaspora as part of the process.

    The desired outcomes of the consultancy are:
    1. Creation of promotional website and a database to store the data gathered from the surveys.
    2. Detailed demographic profile including: population, household income, wealth and credit levels, the impact of poverty, education levels, property values and trends in property ownership, skills gaps, joblessness, underemployment, and race, among others for up to the past ten years.
    3. Analysis of the economic base.
    4. Market and Industry Cluster analysis for the each of the 5 pillars:
    a. Specific industries and business types and consider their strengths, weaknesses, opportunities and threats (SWOT);
    b. Improvements and actions that will accelerate business attraction and recruitment of such development; and
    c. Territorial and federal programs or other programs that will be developed or implemented including, but not limited to, entrepreneurial development, business incubation and strategies for any special new industries.
    5. SWOT analysis – Analyze strengths, weaknesses, opportunities and constraints of the territorial economy. The review must include social, demographic, economic and physical factors.
    6. Community Engagement Awareness Strategy.
    7. Outreach Campaigns
    8. Evaluation Framework for process and results against key metrics and benchmarks.
    9. Vision 2040 Economic Plan (A transformative 20-year economic development plan and a targeted competitive industry analysis by January 15, 2021.)

    Quoting a recent St. Croix Source newspaper article, the Governor stated that “We’re not always going to agree and not always going to be on the same page, but enough of us have to be committed to making the type of Virgin Islands we want to see, and to understand that in order to have the things we want, we have to make sacrifices in other places,”.

    Camoin 310 and EDA plans to engage residents multiple times in different venues looking for vast engagement. Engagement is vital to the success of any strategy and so is the political will to carry out a long term plan during difficult plans.

    The proposed approaches are very good, just falling short in the lack of proven implementation frameworks that can help the projects and programs build momentum and stay on track. Additionally there are side effects from being small developing islands which promote unintended inequality and social issues like community push back or dismissal. One of the prevailing causes of the financial calamities of the Territory is the largely extractive financial model in play. WAPA’s LEAC pays around %39 of their revenues to foreign fuel suppliers, plus financing costs, plus equipment purchases. Most of the food consumed in the Territory is imported that money also leaves to pay producers and transporters. The same happens with manufactured products, building materials, vehicles, airfare, etc. On top of all that we are often hiring non-local consultants to create studies that are required by Federal grants which end up collecting dust. In contrast we get to keep revenue from services, taxes, and the profits from some of the goods sold. The currency multiplier effect is probably very low, but more research on the topic is necessary to validate the hypothesis. In order to achieve resource neutral economic growth the Virgin Islands must improve the quality of services offered to increase the tourism market demand and work on local food production and exports which require a small footprint. I will not explore the details because I suggest we decide upon the course where we want to head first.

    To the extent of the economic analysis, I will mostly on a high level roadmap and not on the specifics. Ideally, Virgin Islanders should commit to the facilitated effort of creating a regenerative vision that encompasses the historical, geographic, cultural, ecological, and developmental nuances of the four islands in preparation for the upcoming planning efforts. The regenerative vision defines a holistic approach that takes into consideration the interests of ALL the stakeholders, residents, businesses, government, and the environment with the intent of creating a more fulfilling future decoupled from infinite growth and the negative impacts of Climate Change. The regenerative approach will also help transcend the conflicts of interests from vested interests and improve buy in from residents. Once the vision is completed we can then move to the implementation strategy that can withstand the resistance to change, lack of political commitment, conflicts of interest, financial barriers, and more.

    The next step is to translate the vision into an actionable plan as recommended by the author as well as designating a team to manage the effort. As a regenerative systems thinker I try to optimize best practices when suitable to take advantage of the existing knowledge bases, community support, funding mechanisms, and standardized metrics. My first thought was to use the United Nations Sustainable Development 2030 Goals (UN SDGs) framework used around the world and most importantly by other Caribbean islands. Unfortunately, the current National leadership has not given UN SDGs the necessary importance as we confront the impacts of climate change caused by infinite growth despite that most scientists and many academics are sounding the alarm. A recent article from Brooking Institution discusses some of the benefits of the sustainable development agenda, how they “reflect and reinforce America’s values” and how they are a “comprehensive and useful framework for U.S. action locally and globally”. The US government tracks its’ UN SDGs status at https://sdg.data.gov/. I have included the UN SDGs as reference for clarity.

    https://photos.app.goo.gl/bfiXBxrES3uxF9c97

    After further research it made more sense to use the Doughnut Economics model in which, Kate Raworth synthesizes socially centered aspects of economic development and developed a visual approach which illustrates social development against ecological resource uses and how we must be conscious about the planetary implications and growth limitations. The graphic representation of the metrics and indicators use simple visuals which make the development framework’s message shine through. The message of living within our planetary budget boundaries is represented by concentric circles which define the social and ecological metrics. The generally National model can be ported to City Portraits using the methodology created by the Doughnut Economics Action Lab. In theory it could even be broken down by district based upon the needs identified during the vision exercise.

    https://photos.app.goo.gl/aZPewR3ucR1bryAQ7

    The one aspect that the Doughnut City Portrait is missing is the long term continuous improvement. The regenerative Virgin Islands Vision can be used as input for a continuous improvement management process designed to carry on the torch for decades to come and protect the plan from ending on a shelf with so many other studies and plans. The Plan, Do, Check, Act continuous improvement process mimics the cyclical natural feedback loops and is composed of the following steps: “Plan” to break down the vision into specific, measurable, achievable, relevant, and time bound objectives and processes to meet the goals; “Do” to implement these objectives and processes; “Check” to monitor and measure the results of the implementation, and “Act” to make corrections and aim for higher goals.

    In 2016, the International Standards Organization tailored the Plan, Do, Check, Act cycle to the specifics of sustainable development and came up with the ISO 37101 – Sustainable Development In Communities standard. My recommendation is to implement the ISO 37101 Sustainable Development in Communities standard as a tool to achieve the regenerative Virgin Islands Vision. Specifically, the ISO 37101 standard, relies on a highly committed team which is selected in the beginning which then puts in place the management system which takes into account the pillars of sustainable development (economic, social, and environmental aspects). The outcomes of the process are improved the sustainability, smartness and resilience of strategies, programs, projects, plans and services that are under the direct responsibility of the community; preservation and improvement of the environment and resilience; optimization of resource usage; use a systematic approach to engaging all interested parties; efficiency increases; and fiscal attractiveness of the community. The most important feature of the ISO 37101 standard is that not only will it use a community developed vision, but it can also addresses the political commitment from the onset.

    https://photos.app.goo.gl/u6eQtkZnHK9fQCoCA

    The Doughnut City Portrait metrics can be aligned with the indicators from the ISO 37101 standard to create a robust, comprehensive, future-proof, and transparent management system that can help the Virgin Islands become a regional leader.

    #15678
    Lloyd Gardner
    Participant

    Four months to produce an economic development plan should make for an interesting plan, to say the least.

    My main concern is the lack of articulation of the connections between economic growth and development. What kind of community are we trying to build? Without an agreed vision of who we want to be as a people and a community, it is possible to pursue economic development strategies that do not support the social development aspirations of the community. There are clear signals in the areas of health, criminal and social justice, and education that indicate that the pathways between economic activity and social development have to be more clearly delineated and actively pursued.

    Then there is the issue of the capacity and discipline necessary to translate an economic vision/strategy to economic growth to social development. That capacity includes managing three streams of activities simultaneously: (1) the current recovery process, and ensuring that current investments facilitate pursuit of long-term development goals;(2) the long overdue process of improving public sector decision making and service delivery; and (3) transitioning to a new development path.

    #15690
    MPepco
    Participant

    Interesting.

    There are probably two reasons for this plan: to punch-out a federal funding requirement, and to be viewed as doing something meaningful in the wake of the pandemic. Covid will change tourism, the backbone of our economy, for the foreseeable future with direct impact on businesses, jobs and government revenues.

    Why the need to get this done in 4 months? Take the time and do it right. This is not an inexpensive initiative and the emphasis should be on the best plan rather than meeting a schedule.

    I do agree that absent consensus around community values and vision a truly representative plan is impossible to achieve and get implemented.

    On the Vision 2040 roll-out zoom call someone asked whether this will be just another study that future administrations ignore. Without community and legislative buy-in it will be shelved, probably by this administration and those that follow. There would be less of a chance of this happening if the Governor and the Legislature both support developing the plan and, once completed. the legislature committed local dollars to implementing recommendations and established an ongoing public/private management and oversight structure.

    The survey doesn’t allow for gathering the information I believe needs to be obtained.

    As an example, the choice of just 5 jobs/services for the community limits the range of opportunities I believe the community needs to consider. The question of whether an individual will be living in the Virgin Islands at a future date requires follow-up to identify what informs the answer. Depending on age and other factors responses will differ. Its important to know this. The question of what Caribbean country is more prosperous or attractive attempts to identify a community worth emulating. The Virgin Islands is more prosperous than most because of federal funds. Alternatively, most other Caribbean countries have greater leeway to give preferences to local residents. Being part of the US means the VI must do things consistent with U.S. law. Finally, looking at role models regardless of geography is a better approach. Singaporeans had to look beyond other Southeast Asia or Asia itself to identify elements that met that country’s development aspiration.

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