April 22, 2025
Economic development has traditionally relied on top-down solutions such as attracting big businesses through tax incentives. But too often, these efforts create wealth that is exported to corporate headquarters. Community needs and priorities get shortchanged when local voices go unheard. Research from Pew suggests that tax incentives to attract investment are not an effective tool to help the small businesses that lead economic growth and job creation. This has been especially true in rural communities, tribal areas, and other places in the United States where underinvestment in business creates economic stagnation.
Traditional economic development approaches also haven’t done a good job of shrinking disparities between very wealthy and poor communities. The EIG Distressed Communities Index (2018 to 2022) shows that when compared to less prosperous communities, prosperous areas averaged twice the rate of increase in business establishments and two-and-a-half times the rate of job growth. Underinvested and distressed areas showed fewer jobs and businesses at the end of this four-year period than at its start. To support local employers and improve the economic conditions of distressed areas, we need a new planning approach.
Action research provides a strong alternative. At its core, action research involves continuous cycles of learning and action, allowing communities to develop solutions tailored to local needs. For those working in economic development, this approach helps ensure our efforts result in equitable and sustainable growth.
Action research is different because it puts communities at the center of economic development. This means genuinely including people who have historically been left out of mainstream economic opportunities, such as the disabled and youth. By deeply engaging with community members at every step, we tap into their knowledge, experience, and dreams to improve economic outcomes for the entire community. Action research isn’t about doing things for communities; it’s about doing things together.
Community at the Center
Figure 1 shows how action research works: economic developers who practice action research follow a simple cycle of looking, thinking, and acting. First, together with stakeholders, the action researcher looks closely to understand community needs and resources. Then, they think carefully about what they’ve learned. Only after looking and thinking do they take action.
But these professionals don’t stop there—they repeat the look-think-act cycle continuously to learn and improve their approach and to test it with the community. With each cycle, solutions get better, stronger, and more effective at actually building wealth and opportunity for local people.
Five Key Ideas
Action research might sound new, but its principles align closely with practices economic development professionals already use—whether they’re called human-centered design, agile planning, or participatory development.
Here are five key ideas behind action research that economic development professionals should consider embracing – and hypothetical ways these practices might be implemented in a community struggling with the challenge of youth unemployment:
- Community-Driven Development: Decisions are made with communities, ensuring projects meet their actual needs. This strengthens local ownership and leads to sustainable change.
Imagine the community holding meetings where youth, families, and local leaders share ideas about what the community needs most. They decide job training for youth in the community is more important than attracting an outside factory that might not hire locals. They specify that the training must reflect current and future employment opportunities.
- Co-design and Co-creation: This means inviting all stakeholders, especially marginalized groups, to actively shape plans and solutions. It sparks creativity, innovation, and builds trust.
Imagine that together, young people, business owners, and elected officials design a training program focused on skills youth want and local businesses need, like digital marketing or renewable energy installation. Because everyone participates, creativity and trust grow stronger.
- Equity-Focused: Action research prioritizes fairness and inclusion by addressing systemic inequities directly. The approach demands inclusive decision-making, ensuring no parts of the community are left behind.
Imagine what happens when a community can see that its minority youth historically have had fewer job opportunities as reflected in employment data. A special effort is made to invite them into planning discussions. The invitation addresses barriers like transportation and internet access, ensuring engagement by all affected youth.
- Iterative Processes: Simply put, we look, learn, and try, making improvements as we go. Each round of action deepens our understanding of what’s possible and effective.
Imagine the community launching a short pilot program and quickly gathering feedback from participants and employers. Insights lead to training adjustments and changes in employer outreach. These improvements are then tested through a new cycle of learning. Multiple action research cycles lead to continuous program improvement.
- Positionality and Reflection: Understanding how our often unconscious biases influence our work helps us make better and more inclusive decisions. Such personal reflection ensures that we genuinely support communities in bringing their ideas to fruition – not our own.
Imagine that the organizers regularly reflect on their own assumptions—such as whether they’re favoring certain skills or businesses. Programs genuinely reflect community needs and preferences, not what others think is best.
Action Research with Root Change
Action research for development isn’t just hypothetical. Check out a few real-world examples of how Root Change is supporting development projects that deploy action research in the field:
In the United States, action research is the guiding framework used by the Economic Recovery Corps (ERC),a multi-year program supported by EDA and led the International Economic Development Council (IEDC) alongside a partner coalition, which is cultivating the next generation of economic developers while tackling economic gaps faced by distressed communities across America. Root Change supports ERC Fellows in using action research to tackle community challenges—like improving downtown areas or promoting outdoor activities. ERC’s 65 Fellows have started important projects in 42 states, including nine Tribal Nations, two U.S. territories, and five multi-state collaborations. These projects are demonstrating the power of action research to transform local economies.
In Malawi, Root Change facilitates the Tizidalile Community Independence Initiative (CII), engaging families in a transformative, peer-driven model to leverage their innate talents, strengths, and resourcefulness. Contrary to conventional development approaches, CII refrains from providing services or advice, opting instead to establish a framework that empowers families to define their own goals and foster social networks that reinforce their progress. The primary objective is to uncover the strategies families use to uplift themselves and their communities. These efforts empower communities and improve their ability to support local economic growth.
In Cambodia, Root Change organized social labs with local youth in Phnom Penh. Over four months, twelve teams of ambitious young people came together to address some of their community’s most pressing challenges. The projects that youth designed spanned critical issues like education, employment, teen drug use, waste management, and city transportation issues. Through teamwork and quick experiments, the program encouraged new ideas and strong collaboration, helping communities build more effective and lasting development strategies.
Forward Together
As we continue to build better and more sustainable economic systems, action research gives us practical tools to create lasting, community-driven change. Together, we can develop resilient economies where everyone has the opportunity to thrive.
Interested in learning more? Connect with us to learn more about Root Change’s innovative approaches to development.
Photo Credit: IEDC
