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Prof. Scott Campbell Urban Planning 539 University of Michigan. Overview: Economic Development Policies. Typologies of ED policies. Place-based vs. industry-based vs. occupation-based, etc. e.g., what are you emphasizing?
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Prof. Scott Campbell Urban Planning 539 University of Michigan Overview: Economic Development Policies
Typologies of ED policies Place-based vs. industry-based vs. occupation-based, etc. e.g., what are you emphasizing? a friendly business climate; agglomeration economies; a good offering of local amenities to attract a highly educated workforce; low-cost labor and land; a tight network of innovative firms; aggressive economic development tools (e.g., IRBs, TIFs); proximity to universities, research parks, airports, etc.; active neighborhood-based involvement; protectionism; free-trade; to name just a few.
Choices / Priorities in ED Policies • How do you define the public interest? • How you view the relationship between the public and private sectors, and one’s willingness to work within the market, be entrepreneurial and/or pragmatic. • What tools do you use? • Where do you stand on the equity versus efficiency debate? • Where do you stand on the policy intervention versus market incentive debate? • How much risk can you handle?
Three Waves of Economic Development • Source: Blakely, Edward J and Ted K Bradshaw. 2002. Planning Local Economic Development Theory and Practice: Third Edition. Sage. Page 45: Table 2.3
Another historical view…. Fitzgerald, Joan and Nancey Green Leigh. 2002. Economic Revitalization: Cases and Strategies for City and Suburb. Sage. pp. 10-26
Multiple Strategies and ... • Boosterism, Place Marketing • Investing in comparative advantages • Human capital development • Developing markets • Creating clusters, agglomeration economies • Infrastructure (physical, technical, social) • Smokestack chasing, Business attraction: taxes, etc. • Partnerships • Multiple Goals • Employment • Higher wages • Lower poverty • Reduce inequality • Increase human capital • Increase living conditions • Job attraction and retainment • Capacity building • Increase multipliers • Sustainable growth
Susan E. Clarke Gary L. Gaile, The Next Wave: Postfederal Local Economic Development Strategies, in Blair and Reese, 1998. (originally in EDQ in 1992) • Theme: the rise of the entreprenurial, risk-taking, partnership-making local state • Changes: • a shift away from state and federal funding • a rhetoric of devolution, local control and local entrepreneurship. • A blessing in disguise? More local funding means more local control. [166] • This study: from 1978 to 1989: did federal cuts affect the level of local economic development efforts. and if funding sources shifted to localities, were the localities more risky or cautious?
So: initial data suggests that cities using these ED tools are faster growing, with lower taxes, fewer government employees and government expenditures. [NOTE: could this be a spurious relationship? That is, other factors are influencing both variables?]
Trends • a shift from traditional federal sources (e.g., UDAG, EDA) to public-private partnerships, revenues from redevelopment projects, TIF, revolving loan funds, one stop permit shopping, below market rate bonds, enterprise zones, trade missions abroad, etc. [see table 13.2, page 169] [see also Table 13.3, p.170] • with the federal withdrawal, the local setting is more competitive, fragmented • emphasis on entrepreneurial, market based strategies [167] • a shift from wealth creation rather than subsidize locational decisions or employment strategies. • Greater tolerance for risk: public capital used for its investment potential. A view of economic development projects as a "portfolio" (some are winners, some are losers). • Shift to entrepreneurial interest in generating new businesses, not just retaining old ones.
More Trends • More specialized, custom-tailored deals • Use of linkages • With the creation of all these new specialized (dedicated) funding tracks (e.g., TIFs, enterprise zones, etc.) the result is: funding stays within economic development, rather than getting put into general revenues. [171] • A shift from social criteria to market feasibility [173] • The reemergence of downtown as a locus of development • Greater use of non-profits
Reese, Laura A., and Raymond A. Rosenfeld "Yes, But . . . : Questioning the Conventional Wisdom About Economic Development." Economic Development Quarterly , Vol. 15, No. 4, November 2001, pp. 299-312 • Gloucester • Cornwall • Economic development policy making is largely about economics and politics, • local government structure matters in determining policy processes and resultant policies, • fiscal and economic stress force cities to approve costly incentives for private businesses, • the composition of local governing regimes largely determines policies, • cities with similar governing regimes will have similar approaches to economic development, • businesses are a critical part of most local economic development regimes, • businesses will always push for incentives to lower their costs of production, • local economic development policies and processes will vary depending on the extent of business and/or citizen input into the decision-making process, and • cities employing a broad array of economic development techniques or most incentives allowed by state law are “shooting at everything that flies” and lack rational focus in their economic development efforts. • Cadillac • Oakville • Allen Park • Romulus • Coshocton • Fairborn • Kettering
Reese, Laura A., and Raymond A. Rosenfeld "Yes, But . . . : Questioning the Conventional Wisdom About Economic Development." Economic Development Quarterly , Vol. 15, No. 4, November 2001, pp. 299-312 • Gloucester • Cornwall • Cadillac • Oakville • Allen Park • Romulus • Coshocton • Fairborn • Kettering
Reese, Laura A., and Raymond A. Rosenfeld "Yes, But . . . : Questioning the Conventional Wisdom About Economic Development." Economic Development Quarterly , Vol. 15, No. 4, November 2001, pp. 299-312 • Gloucester • Cornwall • Cadillac • Oakville • Allen Park • Romulus • Coshocton • Fairborn • Kettering
Reese, Laura A., and Raymond A. Rosenfeld "Yes, But . . . : Questioning the Conventional Wisdom About Economic Development." Economic Development Quarterly , Vol. 15, No. 4, November 2001, pp. 299-312 • Gloucester • Cornwall • Cadillac • Oakville • Allen Park • Romulus • Coshocton • Fairborn • Kettering
Reese, Laura A., and Raymond A. Rosenfeld "Yes, But . . . : Questioning the Conventional Wisdom About Economic Development." Economic Development Quarterly , Vol. 15, No. 4, November 2001, pp. 299-312 • Gloucester • Cornwall • Cadillac • Oakville • Allen Park • Romulus • Coshocton • Fairborn • Kettering
“Assessing Readiness for Economic Development Strategic Planning: A Community Case Study” Christine M. Reed; B. J. Reed; Jeffrey S. Luke JAPA 1987 Beatrice, Nebraska