Case study: Developing an inclusive growth agenda in San Antonio

24th Jan 2017

San Antonio – a city of approximately 1.44 million people, with around 2.39 million in the metropolitan area – is in Bexar County, Texas, and has an important strategic location as a gateway to Mexico. It has a ‘minority majority’ population – around 55% of the population is of Hispanic or Latino origin.

GDP growth has been strong in San Antonio – 13.8% from 2009 to 2012. It was one of only nine large metropolitan areas in the US to perform above average on growth, prosperity, overall inclusion and inclusion by race between 2009 and 2014. Median household incomes and median hourly wages are lower than the national average. In November 2015, the city’s unemployment rate was 3.8% compared with 4.6% in Texas and 5.0% across the US.

Historically San Antonio has had a low-wage, low-tax and low-regulation economy, but now has an economic strategy focused on growing the economy from within, with a tightly targeted sector-based policy  focusing on better jobs in globally competitive sectors.

Multiple economic centres (a polycentric pattern) and outward expansion have led to a perceived lack of investment in San Antonio’s urban core and created challenges for connecting residents to jobs. The highway system is a barrier to non-car transport.

The pattern of spatial development contributes to economic segregation and difficulties in accessing services, while housing affordability contributes to segregation by income.

Governance

Most day-to-day US policy is devolved to the state governments. Texas is one of a minority of states that does not levy an individual income tax. It allows municipalities like San Antonio to levy taxes on property and sales. In San Antonio the sales tax rate is 8.25%, with 6.25% distributed to the state of Texas and the remaining 2% covering city, county and special district tax.

San Antonio has a Council-Manager system of municipal government. Voters elect the Mayor and the Council (there are ten councillors each representing a district). The City Council acts as the city’s policymaking and legislative body.

The city’s Economic Development Department works with partner agencies to foster growth and development. The non-profit San Antonio Economic Development Foundation leads on economic competitiveness. The Workforce Solutions Alamo Board serves as the governing board for the regional workforce system, a network of service providers and contractors that brings people and jobs together.

Strategy, vision and leadership

The mayor’s vision of San Antonio is “a globally competitive city where each of us has the opportunity to prosper”. Various strategies guide San Antonio’s development. SA2020 is a vision setting goals for improving San Antonio by the year 2020. The process was underpinned by the largest engagement exercise in the city’s history, involving nearly 6,000 people.

Discussions were informed by the question: ‘In the year 2020, what do you want our city to look like?’ The 11 ‘cause areas’ that make up SA20207 are: arts and culture; civic engagement; community safety; downtown development; economic competitiveness; education; environmental sustainability; family well-being; health and fitness; neighbourhoods; transportation. In each cause area, a number of different indicators prioritised by the community are used to measure progress. The indicators for economic development are:

  • increase per capita income
  • increase growth in target industries
  • increase entrepreneurship
  • increase professional certificates
  • expand STEM economy
  • reduce unemployment.

This illustrates a demand-side emphasis on ‘growing the economy’ and then fostering inclusion by linking residents to such growth.

SA Tomorrow is a plan to guide San Antonio to 2040. It consists of three linked plans covering transportation, sustainability and a comprehensive plan. Equity is an explicit component of SA Tomorrow, which aims to ‘provide benefits to all our current and future residents’. The emphasis for spatial planning is on ensuring that growth is efficient. This involves focusing denser growth in 13 live/work/play centres providing a range of housing types and prices (with the aim of creating stable, mixed-income communities), and enabling easier transport planning and infrastructure provision.

As part of its participation in the Global Cities Initiative, San Antonio has developed a Trade and Investment Strategy 2015  – a ten-year plan for connecting the city with economic opportunities around the world. For the long-term economic benefit of the community, the goal is to establish San Antonio as a leading location for developing and attracting globally competitive businesses in ‘local industry specialisations’ through a targeted trade and investment strategy. By helping globally competitive industries grow, the availability of good jobs can be increased. There is recognition that it is not possible to thrive unless all resources are utilised, hence there is an emphasis on complementary youth mentoring, digital inclusion and adult literacy programmes.

Design, implementation, monitoring and impact

One issue following the SA2020 visioning process was that indicators had been agreed without checking whether underlying data sets were available to measure the ‘current reality’, progress and desired outcomes.

A consultation exercise with ‘content experts’ critically reviewed the indicators, reducing 65 indicators to 59, endorsed by a community vote. A data dashboard was launched in 2014 to keep residents informed of progress and encourage them to get involved.

San Antonio has adopted the SA2020 goals, and interviewees reported that funders “have shifted the way that they are funding things based on the indicators”. The Mayor’s Office recognised a need to be held accountable for progress, so the organisation SA2020 has become a 501(c)3 organisation to fulfil this role and act as a catalyst for change.

Key themes from the San Antonio experience are:

  • the use of the 2020 indicators to get residents and stakeholders to accept the ‘same set of facts’ to help guide discussion, and
  • the importance of good underlying data and intelligence to inform strategy, develop indicators and measure progress. Work is underway to develop a shared data network within and between city government and partners.

Exemplar themes and initiatives

Two themes and initiatives from San Antonio are of particular interest to UK cities: first, sector-based initiatives and associated workforce-development initiatives; and second, Pre-K 4 SA – an initiative to invest in pre-school education funded by local taxes.

Sector-based initiatives

Project QUEST (Quality Employment through Skills Training) began in 1993, aiming to reskill low-income, disadvantaged workers for good jobs in high-demand occupations. It targeted a cluster of in-demand, wellpaying, and growing occupations, and worked with the community college system to develop degree and certificate programmes suited to these occupations.

It was based on four principles identified by residents of disadvantaged neighbourhoods and the business community. The programme must:

  • tie in strongly with the occupational demands of local employers
  • target training only for those careers that offer good pay and advancement opportunities
  • incorporate intensive client services to help economically disadvantaged participants overcome financial and personal barriers to skill acquisition
  • leverage the training resources already operating in the community.

QUEST links low-income individuals to training and links employers to its graduates. Its Applicant Information Management System has been used extensively to track outcomes and to demonstrate to the city that its investment is more than recouping itself in terms of increased tax revenue and decreased drains on other types of city-funded social services.

During the past 21 years, more than 80% of its entrants have graduated from the  programme, and 86% of those who graduated were placed into higher-paying occupations (Benner and Pastor, 2015).

A more recent initiative is the Talent Pipeline Task Force  – a mix of employers, workforce development leaders, chambers of commerce, and post-secondary education and social service providers. It was convened to close the skills gaps in three main industries: healthcare and biosciences, IT and cybersecurity, and advanced manufacturing.

The Task Force also agreed to a middle-skills strategy, targeting jobs that require more than a high school diploma and less than a bachelor’s degree, as the core focus of its work to engage educators and industry to work in partnership. The Task Force developed career pathway documents to illustrate the training, skills and credentials individuals need to move from entry level to high-skilled jobs in the targeted industries and related occupations. While the number of people employed in target industries is currently on track to meet the SA2020 goal, the population is projected to grow by 1 million by the year 2040 and industry needs continue to grow disproportionately to the skill attainment of the workforce.

In a similar vein, SA Works is an industry-led coalition concerned with fostering experiential learning. It was set up by the mayor to connect employers with upper secondary and post-secondary systems. It focuses on:

  • identifying skills gaps to maintain and increase competitive advantage in target industries, making it easier to attract and grow competitive businesses
  • preparing the workforce for jobs that actually exist, by developing opportunities for experiential learning at secondary and post-secondary levels, including paid internships, and
  • targeted interventions for unemployed and underemployed adults, focusing on addressing barriers to employment.

Pre-K 4 SA

Pre-K 4 SA (Pre-kindergarten for San Antonio) is a full-day pre-kindergarten programme with experienced teachers, a high-quality curriculum and bilingual education options, which also offers free after-school care until 6pm, plus meals and transportation. It caters for 3,700 children.

It grew out of the Brainpower Taskforce, which brought together education and business leaders to identify the best use of money if part of the local sales tax was pledged to a specific cause for eight years. The Taskforce recommended that developing high-quality pre‑kindergarten services for four-year-old children would be the most effective way to improve the quality of education in San Antonio.

There is no universal Pre-K education for four-year olds in Texas and the children most likely to miss out are those from families with incomes just above the poverty line, who are excluded from many government assistance programmes. Pre-K 4 SA sets eligibility criteria by income to target this group.

Through Pre-K 4 SA, the Chamber of Commerce has backed a long-term early intervention programme, recognising the importance of a ‘good start’ in education for the future competitiveness of the San Antonio economy.

Conclusion

San Antonio is a fast-growing city that is consciously planning to shape future growth, by focusing on carefully selected sectors with the potential to provide quality jobs. With a largely home-grown ‘minority majority’ population, it is seeking to address inclusion through a primary focus on competitiveness in global markets by targeting specialisation in key local sectors.

The idea is to grow quality jobs (both from within the San Antonio business base and through targeted inward investment) and open up opportunities for the local population to access them – through investment in education and skills at all levels, and with a particular focus on sector-led training. The approach may be seen as primarily ‘demand led’ – with ‘supplyside’ initiatives targeted explicitly to that demand.

For more information and references, see our report and appendix.