On Thursday July 5, the White House convened a Forum on Citizen-Based Innovation to discuss how civic engagement creates jobs, promotes economic resilience, and strengthens communities.

NCoC research exploring the connection between civic participation and economic resilience helped frame the event conversation. The research brief, "Civic Health and Unemployment: Can Engagement Strengthen the Economy?" was presented by our Executive Director, David B. Smith, and is available for download at http://NCoC.net/unemployment .

The goal of this White House Forum was to identify effective strategies to extend the reach and scale of citizen innovation. Throughout the program, representatives of government, media and civil society highlighted stories, case studies, and programs that are building community and putting citizens at the center of addressing social problems.

Read the transcript of David Smith's speech below or watch the event (David Smith's speech begins at 48:00).

Speech for The White House Social Enterprise and Opportunity Series
Delivered on July 3, 2012 by
David B. Smith, Executive Director, National Conference on Citizenship

Over the past several years, there have been many rooms full of problem solvers. City Councils, County Supervisors, Governor's Cabinets, regional Federal Reserve Banks, and the President's own Economic Advisors; everyone coming together to look for ways to turn our economy around.

In these local conversations, I can assure you that ideas such as moving sports stadiums downtown, recruiting a new research center, attracting the latest technology conference, or launching a new tourism campaign have been suggested as means to invest in the local economy and create jobs.

In how many of these rooms do you think the word volunteerism, neighborliness or nonprofit ever came up? Surely not enough. Financial capital is always at the table, human capital is often included, but social capital is mostly overlooked.

While each of these ideas have great merit, the latter is less expensive by an order of magnitude and will not only reduce unemployment today, but it will build economic resiliency for the future.

This past fall, NCoC in partnership with Civic Enterprises, CIRCLE, Harvard's Saguaro Seminar, and the National Constitution Center published a report showing the strong correlation between civic health and unemployment.

In short, cities and states with high levels of civic health in 2006 rebuffed the economic collapse and unemployment crisis better than their less-engaged counterparts. This was true even when controlling for numerous economic variables -- including housing inflation, presence of oil and gas industries, and workforce with professional degrees.

Not only did these findings hold up, but we were able to go a step further and show the magnitude of how civic health indicators connect with unemployment. Our data shows that a community with 4% more residents working together to solve community problems will have a 1% lower unemployment rate. Public meeting attendance had the second highest correlation, followed closely by volunteering.

Our data is not without its limitations, so to date, we've been able to show the strong correlation, but we lacked the evidence to prove true causation. However, thanks to the support of the Knight Foundation, we are further investigating this connection and will release new findings in a couple months.

How does civic health lead to economic resiliency?

We propose (and are now further investigating) six hypotheses:

1) Human Capital Hypothesis: Participating in civil society can develop skills, confidence, and habits that make individuals employable -- skills such as team building, critical thinking and problem solving.

2) Networking Hypothesis: People get jobs through social networks and engaging in one's community expands your number of ties.

3) Information Hypothesis: volunteering, attending meetings and interacting with neighbors spreads information -- ultimately helping to match employers in need of talent with labor seeking employment.

4) Trust Hypothesis: participation in civil society builds trust, and high levels of trust in the business community facilitates economic transactions.

5) Good Government Hypothesis: communities with higher levels of citizen engagement are more likely to have good government, in turn attracting business who look for stable institutions before planting roots.

6) Attachment Hypothesis: as the Knight Foundation and Gallup found through the Soul of the Community project, communities with high levels of attachment have greater economic growth. We look at highly attached communities as places with fertile soil upon which civic health can easily take root, and lead to greater social, human, and financial capital growth.

New Findings

I mentioned we are again working with our great Civic Health Working Group (including gurus like John Bridgeland, Bob Putnam, Bill Galston, Peter Levine and many others) and will have more in-depth results to launch this September at our 67th Annual Conference.

One quick sneak peak: we are going deeper on the role of nonprofit organizations in communities. We are finding that the presence and growth of the nonprofit sector plays a critical role in the underlying economic health -- showing that the density of nonprofits in a city could account for up to 1.5% of its unemployment rate.

We are digging deeper into this, but this makes complete sense as we know there are over 1.4 million nonprofits in America, employing 10.7 million Americans, making up over 10% of the workforce and channeling almost $300 billion in investment into communities each year.

This further backs up my colleagues' points that social innovation plays a critical role in both solving our social problems and our economic problems.

Call to Action

Moving forward, my charge is this:

We must not allow social capital to be absent from the juntas forming around our nation to address our grave economic needs.

1) We call upon our friends at the regional Federal Reserve banks to join us to further explore this correlation and ensure civic health strategies are included in all regional economic development plans.

2) We call upon our friends on the Council of Economic Advisors to join us to ensure social capital growth is part of the President's strategy to improve the economy.

3) We call upon our friends who serve as Governors and Mayors of our great states and cities. Please ensure that you are targeting your civic health indicators in the same vein you are thinking about tax base, attracting corporations, and building infrastructure.

4) Finally, we call upon our friends at Census and the Bureau for Labor Statistics and encourage you to collect more data focused on the civic health of our communities. We collect terabytes of information related to our commercial transactions in this country; please invest just a fraction of those resources into better understanding and monitoring our social transactions. Both are essential to building a vibrant and thriving nation.

As the President said in this year's State of the Union Address, "No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team."

Just as we built the interstate highway system and the Internet together, providing channels for citizens and business to explore, expand, and connect, we now call upon each of us to invest in a solid foundation of social capital upon which our neighborhoods, states, and economy can thrive.