Study examines OKC’s economic resiliency; cites barriers for some

In a study by consulting firm EY for the Alliance for Economic Development of Oklahoma City, researchers examined the city’s economic resiliency or capacity to emerge from the pandemic with a stronger, growing economy and to experience fewer, if any, adverse effects from future disruptions, whether natural or economic.

According to a draft of the Oklahoma City Community Economic Recovery & Resiliency Study executive summary, a more resilient economy in Oklahoma City is one that “features a diversity of growing industry clusters, support for startups and small businesses, and equitable access to opportunities for all people in Oklahoma City.”

In developing the study, EY worked with several stakeholder groups to better understand the number and variety of tools and programs currently available in OKC’s economic development ecosystem, as well as existing needs and opportunities. Many of those same stakeholders cited several barriers to economic inclusion and resiliency while trying to accomplish or fulfill their business goals or objectives, including culture, skills, social mobility and communication barriers.

EY compared Oklahoma City to 19 peer cities by using 20 different benchmarks. What they found was that OKC typically fell somewhere in the middle of the pack for a majority of those benchmarks, including median household income (ninth), share of residents with a bachelor’s degree or higher (15th) and adults below the poverty level (10th), and number of minority-owned businesses (ninth). The city did not fare as well in other benchmark categories such as entrepreneurship and innovation, for example, though venture capital is showing strong growth.

Cathy O’Connor, president of the Alliance for Economic Development of Oklahoma City, said during the pandemic, a lot of data came out from different studies and reports about how more women- and minority-owned business were being impacted by the pandemic than other types of businesses.

“We really wanted to see where Oklahoma City stood with that data and with that issue, and wanted to figure out where Oklahoma City was within that landscape. How well are we doing or how poorly? And then look at what women- and minority-owned businesses are encountering that are making it more difficult for them to succeed here,” O’Connor said.

One piece of data that came out of the study showed Black people make up 13% of the city’s population but own only 2% of businesses. Minority-owned businesses also have fewer employees, lower sales and smaller revenues than business owned by whites. O’Connor was not particularly surprised by that data, however.

“I do think that having the data is really important, at least as a starting point,” she said.

Once all of the aforementioned factors and other data were gathered, researchers then concentrated on organizations, initiatives and programs focused on three primary topics:

• Innovation and entrepreneurial support
• Inclusive access to capital
• Comprehensive placed-based revitalization

In addition to some economic development tools the city, state and other partners have at their disposal to help create a more resilient economy, including tax increment financing (TIFs), MAPS funds, Strategic Investment Program, Quality Jobs Program, tax credits and block grants, Ernst & Young identified a variety of “conceptual recommendations” aimed at making those existing programs more robust, able to fill gaps and increase inclusivity. However, developing those concepts may require additional funding from the city, the study said.

The study also provides a listing of financial tools the Alliance, the City and other partners could use to improve access to capital for specific purposes and for specific people groups. One of those recommendations is what the authors referred to as the “OKC Resiliency Fund,” which could provide flexible financing to small and mid-size businesses, thereby fostering a more-inclusive economy and reducing or even totally eliminating some of the barriers entrepreneurs of color have faced in recent past.

“One of the big things is developing new incentives or targeting our strategic investment program to certain areas of town and certain kinds of companies in the future. Those are some things we can begin to do now and begin to work on,” O’Connor said.

Placed-based investments – meaning those investments made to address the needs of marginalized communities – are also strategies the study recommended to accelerate economic growth, provide more support for small business and enhance equity outcomes.

Oklahoma City has a great opportunity to become a world leader in entrepreneurship, the study concluded, and should consider developing programs and initiatives that provide direct support to small business owners, aspiring entrepreneurs and real estate developers with a focus on providing service to historically disadvantaged populations.

This story originally appeared in the November 2021 edition of the VeloCity newsletter.