Giving Compass' Take:

• David Feinerman reports on Ohio's SkillUp service, which uses an organizational-needs assessment to help local business leaders talk about what is and isn’t working for their businesses and articulate their priorities.

• How can donors help businesses invest in the right talent?

• Here's how philanthropists can help small and local businesses. 

How do you create an agile and growing economy? There is certainly no simple or straightforward path, but my assertion is “one business at a time.”

A region’s economy is comprised of many businesses, each of which must be nurtured to help them succeed. But businesses are run by people, and as Nobel Prize winner Richard Thaler has shown, people behave in predictably irrational ways. Thaler’s research finds that people tend to value what they have, prefer the status quo, and fear and avoid loss.

Studies show that while business leaders value strategic initiatives, they tend to underinvest in the necessary skills or fail to provide adequate resources to achieve success. This problem is exacerbated by already-burdened management teams—when faced with the possibility of increasing their workload, managers may avoid change and “protect what they have,” as Thaler has suggested.

These emotions are unavoidably human, but they can also be restrictive—for individual businesses, employees, and the overall economy.

Read the full article about helping businesses invest in talent by David Feinerman at Brookings.