The Metro Outlook 2.0 Model

Develoment of the model

Metro Outlook 2.0 provides an integrated frameworkfor understanding and improving regional economic competitiveness. It does this by providing a high-level model of the interrelationships between the three major systems affecting the performance of metropolitan regions — the social system, the economic system and the natural system.

Modeling regional performance as a "system of systems" demonstrates the complex, organic nature of metropolitan areas and how actions in one system may, over time, have completely unintended consequences in another. 

The Metro Outlook model is built from the bottom up. It focuses on how individual decisions, when aggregated, contribute to a region’s attractiveness and ultimately, its economic competitiveness.

We start with the context for individual decisions — the social system — which is shown below.

The basic driver of the Metro Outlook model is simple: individuals and families seek communities that improve their chances for a higher quality of life. From this, all else emerges. 

One large component of a community’s quality of life is its institutions. The performance of its schools, its governments, businesses and nonprofits contributes to the perceived value of living in one community versus another. 

These institutions play a dual role. They not only deliver services to residents, but are also the vehicle by which the community makes decisions on how to improve itself.

Many of the resulting policy and spending decisions are targeted at improving the institutions themselves. These decisions typically direct investments to two areas — people and place.   Investment in people (like schools, health care and job support) raises the level of human capital in the community, while investment in place (like roads, sewers, housing and community centers) raises the level of physical capital. 

As wealth (i.e., human and physical capital) rises, these policy and investment decisions make the community even more attractive to individuals and families, starting the cycle over again. (Note: like the original Metro Outlook model, this diagram should be seen as a cylinder where the lines on the right edge connect to those on the left.) 

Over time, people gain experience working together and, if successful, the level of trust among community members builds. Such trust provides a reservoir of good will known as social capital.

Communities characterized by high levels of social capital are better able to agree on policy and spending decisions, allowing them to act more strategically over time, improving their institutions and their community’s attractiveness still further.

Of course, the resources for the spending decisions need to come from somewhere, and they come from the economic system>>.

 

Previous: Why Create a Model? | Next: Economic System