In analyzing McKinsey’s recent report, Toward Action: A G20 Agenda for Sustainable and Inclusive Growth, here’s a breakdown of how it fits—and doesn’t fit—with the realities of local economic development:

Key Insights:

The report emphasizes a need for globally aligned, top-down strategies to drive sustainable and inclusive growth. While these goals may be important on a broad scale, real change in local economies requires a practical, hands-dirty approach that recognizes individual communities’ unique needs and challenges —something that broad agendas often overlook.

Why We Should Be Cautious:

Top-down frameworks, even with the best intentions, often risk imposing solutions that don’t reflect the specific dynamics of local economies. The G20’s goals for inclusion and sustainability are important, but they need to adapt to regional differences in workforce structure, local industries, and available resources. For smaller communities, especially, the “ivory tower” approach of high-level agendas rarely connects with the challenges they’re dealing with every day.

The emphasis on sustainable and inclusive growth often leads to interventions from global entities or large corporations. However, we’ve seen at Street Economics by BusinessFlare that true community wealth-building happens through local ownership and reinvestment. If outside players control development, capital often gets extracted from communities rather than reinvested into them. This can undermine local businesses and disrupt the social fabric of a community.

Programs designed at the global level may fail to account for practical, on-the-ground realities, such as housing challenges, underfunded schools, and local infrastructure needs. Sustainable growth can’t ignore these elements to be truly inclusive. Every community has a unique character, economic ecosystem, and set of values that a global agenda might miss, leading to ineffective or even harmful outcomes. This unique character is the critical element of local economic engagement, as described in Gut Sandwich and Governing for Economic Development.

Many large-scale initiatives have metrics that prioritize fast economic metrics (like GDP growth) over long-term community resilience. However, where we work, economic health isn’t just about job numbers; it’s about quality of life, engagement, and providing opportunities in the community. Policies that don’t prioritize these elements risk increasing costs, increasing inequality, or encouraging displacement.

For real economic impact, solutions must start locally, where people understand their community’s unique strengths and challenges. By focusing on local entrepreneurs, fostering small businesses, and working with local governments to create sustainable plans tailored to specific places, we can promote growth that sticks and benefits everyone.

In summary, while global agendas like McKinsey’s report may present important themes, real change requires starting from the bottom up, not from the top down, localized strategies that involve, engage, and respect the people in the communities being “developed” are what ultimately drive long-lasting, inclusive, and sustainable growth.