Utilizing the Economics of Conservation and Preservation

The Power of Place in Economic Growth

tools for grassroots activists

Businesses of today – supported by relatively cheap and reliable communication channels – can base decisions about where to situate themselves on more than proximity to other businesses. In fact, business leaders are increasingly basing these decisions on the quality of life afforded by the location they choose. That explains why economic growth in the American West, where many national parks and protected wildlife areas can be found, is booming. The following story of the West, conservation and preservation, and advocating for development in new areas has been excerpted from Tools for Grassroots Activists: Best Practices for Success in the Environmental Movement (Patagonia © 2016).

In the mid-1970s when my family moved to Bozeman, Montana, we found a university town surrounded by productive agricultural lands. These in turn were encircled by public lands and forested mountains that produced timber for area mills. Bozeman had a small cinder-block airport, and Interstate 90 passed by east to west. We found a place that was friendly but a little wary of newcomers, and thought of itself as an agricultural hub and land-grant university town.

After graduating from Bozeman High School, I fled the constraints of a small town for the larger world. My parents stayed, and I returned over the years to visit. As I did, I fell in love again with the landscape of southwest Montana and noticed the influx of people who did not seem to be just visiting as tourists en route to Yellowstone National Park but were actually living here. In the mid-1990s, I decided to make Bozeman my home again.

I had recently completed graduate school and secretly thought that moving back to Montana might be career suicide. I should not have worried. Bozeman at the time was part of a broader demographic and economic shift in the West that saw a natural resource economy transformed into a thriving human resource economy. As I realized the power of place to attract (and retain) talent, I began to understand that the environment and the quality of the environment now are economic, competitive advantages for today’s more dynamic and productive businesses, and for a growing number of communities across the West.

Change Is Difficult

In 2006, along with several colleagues, I co-founded Headwaters Economics, a think tank focused on improving community development and land management in the West. We set out to help community leaders and others to better understand the new competitive advantage of the West, and to assist them as they considered public policies and priorities that would allow them to succeed in an expanding economy that rewards skills and quality.

There was one problem. Even though the West of our childhoods no longer exists, by and large as a society we pretend it does. While inevitable, change is threatening; it creates un- certainty—and real winners and losers. One response to change is to stick to what we know. Many former timber towns, for example, struggle to envision a new future. Failing this, they fall back on a hope that the past’s abundance and rewards will return.

The landscape and architecture of the West tempt us to misrecognize change as well. We look out on vast expanses of rangeland and assume ranching is the dominant economic activity; or we see retail shops with brick facades on Main Street catering to visitors and assume tourism is the main economic driver.

At the same time, much of the conservation community remains in the past, focusing narrowly on the perils of natural resource industries and seeing businesses of any kind as a threat.

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Change in the West

While it can sometimes be confusing as to whether we are in the old West or the New West, or the “New Old West” to quote one of my favorite Nevada billboards, the economy has moved on.

The West referred to here consists of the eleven western states in the continental United States, a stretch of land from Montana south to New Mexico and out to the West Coast. These states are home to the bulk of our nation’s federal public lands, including multiple-use lands supporting commodity extraction and a range of protected areas such as wilderness and national parks.

During the last four decades, the western economy has outperformed the rest of the US economy in key measures of growth: employment, population, and personal income. During this time, for example, the region created jobs at twice the rate of the rest of the United States.

The reason is that the West has more successfully diversified its economy to include fast-growing and higher-paying services industry jobs—high-tech, finance, and health care—and attracted talent and entrepreneurs who create tomorrow’s companies. This is happening in both large cities and small towns across the region.

In effect, the economy of the West has shifted from a largely natural resource–based economy to a knowledge-based economy. This development mirrors changes in the United States economy as a whole, which is no longer a competitive low-cost producer of basic goods. Today, the region and the nation’s competitiveness centers on the ability to cultivate and attract innovative companies and an educated workforce that produce a more complex mix of higher-value goods and services.

The magnitude of this economic shift has left more than a few people confused. During the last four decades, nearly all net new jobs in the West—more than 19 million new jobs—were created in services industries. Services include low-wage industries such as hotels and food service as well as high-wage industries such as architecture, engineering, and computer programming. By comparison, almost no net new jobs were created in more traditional industries, such as mining, forestry, and agriculture.

These trends have shifted the industry balance in seismic ways. The most recent data indicate that services now account for 72 percent of all jobs in the West, while the rest of the private sector, including traditional natural resource industries, make up about 14 percent of all jobs in the region. Government employment accounts for the remaining jobs.

Both larger cities and more rural parts of the West are experiencing these shifts. Small communities in the region have historically played second fiddle to larger towns and cities, providing raw materials to be processed and sold elsewhere. This extractive relationship still exists, but in fewer places as more towns and small cities connect to the burgeoning services economy. Today, nearly half of all western counties have an economy in which services account for more than 70 percent of all jobs.

In effect, the economic playing field between smaller towns and larger cities in the West has become more level. For the first time, small to midsized towns are successfully competing for higher-value aspects of the global economy, including knowledge-based industries that pay higher wages. These include information, finance, management, professional, scientific, and technical services, among others. Today, four in ten western counties have an economy in which more than 15 percent of all jobs are in high-wage services industries, with almost as many rural as metropolitan counties succeeding here.

A good example of this is Sandpoint, a small town of less than 7,500 people in northern Idaho. This former timber town has morphed into a quality-of-life community, trading on the appeal of Lake Pend Oreille and the surrounding Selkirk and cabinet Mountains. It has attracted retirees and appealed to younger people with families who work in knowledge-intensive industries such as aerospace manufacturing, pharmaceuticals, and software development. These individuals and companies rely on the internet and access to Spokane’s airport in Spokane, Washington, to sustain business relationships. They are building their companies in Sandpoint because it’s a great place to enjoy the outdoors, raise a family, and live in a friendly community.

Despite these encouraging statistics, portions of the rural West are not doing well economically. These places do not enjoy the benefits of connecting to today’s more diverse services economy for a variety of reasons—competitive pressures on remaining traditional industries, limited civic capacity, and lack of amenities (including attractive landscapes and protected public lands, and isolation). As a result, they have more limited opportunities and often rely on struggling traditional industries that are shedding jobs or are locked into a low-cost battle for survival. The economies of these places typically are not growing—the exception can be found in energy boomtowns that ride the swells and troughs of energy markets and new discoveries—even as youth are leaving and show no signs of return.

Location and Quality of Life

With advances in transportation and communications, more people and companies have the opportunity to choose where they will locate, and more of them are choosing places with a high quality of life.

Communities across the West have begun to realize that they can succeed by investing in and marketing their community character and outdoor quality of life. This is critical because, as Enrico Moretti observes in The New Geography of Jobs, “In the twentieth century, competition was about accumulating physical capital. Today it is about attracting the best human capital.”

For a growing number of companies and individuals, this business climate is closely tied to attractive natural landscapes and outdoor recreation. as “footloose” businesses whose success is relatively independent of location, these companies are more sensitive to the preferences of CEOs, and recruitment and retention factors that allow them to compete for and retain talented employees.

One corporate recruiter recently observed that “Increasingly over the years, amenities have become more a part of the discussion with our clients and more important to candidates’ decisions about taking a job. It’s not just what the job is any longer, but where the job is that matters.”

As this logic becomes more pervasive, businesses are emphasizing the quality of place and investing in organizations that protect this competitive advantage. In Montana, for example, business for Montana’s outdoors has joined a growing number of companies—across a range of competitive fields that include advertising, high-tech manufacturing, entertainment, architecture, and more—that are not hesitant to speak out about how the outdoors allows them to actively recruit talent. Their motto is “Reserving our outdoor assets for tomorrow’s entrepreneurs.”

The Value of Public Lands

In this economy, the West has a clear competitive advantage in its scenic natural lands, many of which are publicly owned. The West has more federal public lands and protected public lands (such as national parks and monuments) than any other region of the country. These lands offer hiking, fishing, hunting, skiing, boating, and other recreation, and provide a scenic backdrop to the region’s communities. They are accessible and enjoyed by the West’s residents at higher rates than in the rest of the country. Public lands stimulate tourism and outdoor recreation. More importantly, these lands are one reason why people and companies across a broad range of industries are coming to the region and diversifying the economy.

A growing body of research has analyzed the economic role of federal public lands, including the economic role of protected federal public lands, and established a connection between protected land and robust economies. Recent research by Headwaters Economics found above-average employment and income benefits in communities and counties with nearby protected federal public lands.

During the last forty years, rural western counties with more than 30 percent of the county’s land base in federal protected status created jobs four times faster than rural western counties without federal protected lands. In 2010, rural western counties had a per capita income that was $436 higher for every 10,000 acres of protected federal lands within their boundaries—or more than 10 percent of average per capita income in rural counties across the West.

In 2011 these findings led more than 100 US economists and related academics—including three Nobel Laureates—to sign a letter urging President Obama to “create jobs and support businesses by investing in our public lands infrastructure and establishing new protected areas such as parks, wilderness, and monuments.”

Small business owners understand this logic as well. A recent Small Business Majority poll conducted in Arizona, Colorado, Nevada, and New Mexico found that “Small business owners believe protecting public lands would positively impact small business opportunities, local job growth, state economies and more: 65 percent of owners believe designating new national parks and monuments would enhance local jobs and the economy … and 52 percent agree it would help their state attract and retain new business and entrepreneurs.”

Conservation Takeaways

The environment and environmental quality is now an economic competitive advantage for today’s more dynamic and productive businesses, and for a growing number of communities across the West. As a result, conservation advocates can play an important role supporting economic well-being, and also can benefit from the power of working with new allies, including business and civic leaders, in their efforts to protect the environment.

Suggested guideposts for making progress in this territory:

Be Relevant

Conservation and preservation cannot succeed without broader and more influential support. Americans consistently tell us they care about other issues as much as or more than the environment. In addition, as the environment has become an increasingly partisan issue, the constituency for conservation has narrowed, and leadership has become less effective. Bridging to more mainstream is- sues and building constructive ties with new allies are important to safeguarding a healthy environment.

A good example of linking conservation values to broader values can be found in efforts to increase federal funding for the Land and Water Conservation Fund (LWCF), which protects and enhances natural resources and outdoor recreation opportunities. LWCF partners emphasize how these investments preserve many aspects of America’s history and culture, support a growing recreation economy and sportsmen’s access, provide close-to-home recreation for the nation’s urban populations, and protect working forests and ranches while resolving land use conflicts and saving the US treasury tax dollars.

Do Not Oversell

Protecting the environment by itself may or may not yield economic benefits. Put another way, while protected land and water resources often appeal to workers, businesses, and retirees, conservation and preservation efforts should embrace a broader strategy of encouraging community and economic development through investments in education, transportation, and communications. If the environmental quality argument alone is oversold or taken out of context, it is less likely to be believed and may fall at altogether—harming the credibility and effectiveness of future conservation work.

Know What You Are Talking About

Take the time to learn the issues and research findings before integrating them into a campaign. There are organizations and publicly available data that can assist with developing research to show how natural amenities and a healthy environment contribute to various economic advantages—for a start, see the list of resources at the end of this chapter.

Tell a Story

Information by itself rarely changes the world. Economists may be the last ones to grasp this point. Conservationists, who typically excel at marshaling data in logical ways to buttress an argument, should not make the same mistake. Whenever possible, link solid research to compelling personal, business, or community stories to show how real people benefit from environmental protection.

For example, knowing that most people move to central Oregon because of the spectacular landscape is less compelling than hearing from the founder of Ruffwear, a thriving local company, about why he brought the company to bend and uses the quality of life there as a marketing and recruiting tool.

Let Partners Speak

It can be difficult for conservation and preservation advocates to be credible on economic development matters. Let others who are more respected voices on the economy be messengers. These can be business owners, corporate recruiters, chamber of commerce members, retired workers, etc. they can tell their story and reach a broader audience with a message about the alignment between environmental protection and economic competitiveness.

Culture Matters

When most people talk about economic efficiency and maximizing profit as reasons why they cannot afford to protect the environment, they are really talking about broader values. Few of us are truly rational economic actors. Ranchers, for example, generally do not ranch because it is the best way for them to make the most money— more likely it is because ranching is what they know and love. (Ranchers have been known to joke that they will stay in “business” until the money runs out.) Environmentalists tend to argue that protecting the land is important in itself or, as we argue here, good for the economy. But an appeal to economic self-interest should also consider broader values, such as love of place or the outdoors, or the well-being of children. These values are commonly held and persuasive across the political spectrum.

Know Where You Are

Not all places are alike, or have the same economic opportunities. Despite the broad trends discussed in this chapter that create new competitive advantages for many towns and cities in the West, some places are not doing well. For these parts of the West—whose economies are in decline and where newer forms of economic activity seem unlikely—a conservation approach may avoid economics altogether. Alternatively, it may focus on retooling existing industries (for example, in agriculture or forestry) around better practices and new markets, or even addressing longstanding environmental damage through restoration, which has immediate economic benefits.

Final Words

Conservationists can be savvier about the growing synergy between environmental and business health, and creative about how to deploy this information. It is time to broaden the focus beyond the perils of natural resource industries to work toward solutions with rapidly expanding businesses whose financial bottom line increasingly is aligned with environmental quality.

Outdoors manufacturing and retail businesses have been particularly receptive to partnering with conservation groups to advance mutually beneficial outcomes. The outdoor industry of America, for example, publishes an annual report estimating the economic magnitude of their industry nationally and for each state, and uses these findings to advocate for public policies that protect their business interests, including land and water protection.

This is an important step. However, the larger opportunity lies in grasping that the success today of the US economy as a whole relies on quality. This includes environmental quality, which has become a competitive advantage in attracting talent and fostering innovation for many of the nation’s fastest-growing companies across a range of economic sectors. Now more than ever, protecting the environment is part of a winning economic strategy.

As I write this, I am looking through office windows at mountains that stretch, largely road- less, to Yellowstone National Park. The trees that drape these mountains now have more value left standing than cut and turned into lumber. The businesses in Bozeman took a long time to realize this. It may have taken the high-profile purchase of a local software company by a Silicon Valley giant to bring the point home. But we get it now. And we are talking to our neighbors and elected officials about how to protect and restore the environment that sustains our community.

Excerpted from Tools for Grassroots Activists: Best Practices for Success in the Environmental Movement (Patagonia © 2016). Used with permission.

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