‘Bottom Up’ Economic Development Gains Traction

by Mark Muro | November 21, 2011

States across the nation are increasingly recognizing the crucial role that regions and metropolitan areas play in their economies. Just last week, Nevada leaders nodded their heads a lot during the release of a big report there about how states should “aid and abet” regional efforts to develop smart sector and cluster strategies to boost growth.

Moreover, in just the last year no less than three states--Colorado, New York, and Tennessee--have each launched well-considered and ambitious “bottom-up” economic development strategies that aim to place regions at the center of their economic development planning, service delivery, and execution.

In each case, new governors have taken a fresh approach to state-local relations in economic development by seeking to tap and unleash regions’ dynamism.

In Colorado, Gov. John Hickenlooper has moved to construct a state economic plan out of regional ones and so asked every county in the state to put together a summary of the vision, strengths, and weaknesses of its local economy.   These summaries were then rolled into 14 regional statements that were aggregated into the “Colorado Blueprint”--the state’s economic development strategy.

In New York, Gov. Andrew Cuomo has rejected Albany’s tradition of imposing economic development strategies on its regions and moved to empower regions by helping them come together to build and execute regional five-year strategic plans. In this fashion, the state has established 10 regional economic development councils--public-private collaborations tasked with developing regional strategic plans focused on leveraging the particular strengths of each region. In each case, regional co-chairs appointed by the governor, one each from the business and academic communities, are required to work with a diverse mix of regional leaders from major industries, small businesses, higher education, community organizations, and labor. To incentivize energetic planning the state intends to provide the best plans a larger share of a $200 million pool of capital funds and tax credits it will be making available to the regions. In this fashion the state will both strongly improve regional planning and collaboration and provide new resources to support locally developed initiatives.

And finally, in Tennessee, Gov. Bill Haslam’s Jobs4TN plan aims to strengthen the state economy by moving to unleash and support the entrepreneurial energies and dynamism of the state’s regions by aligning state resources in the service of regional priorities. Along these lines, the Haslam administration is moving to prioritize key industry clusters, establish regional “jobs base camps” to support regional coordination, and investing in innovation through the INCITE initiative. Central to INCITE will be the funding of a regional business accelerator in each of the nine regions identified in the Jobs4TN plan. Going forward, the Department of Economic and Community Development will place a regional director in each of the nine regions to work with local partners to develop regional plans that align with existing funding sources at the state and federal levels.

Simply put, “bottom up” is becoming the new top approach in state economic development. More and more, state leaders are recognizing not only that regions are the real locus of growth and change, but that state government can only do so much in renewing the economy. For that reason, I predict that more and more states are going to realize that it’s not just good politics but also good practice to put regions in the lead. When they do, we will begin--finally--to see the onset of truly new model of economic development in America.

 

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