View
217
Download
1
Category
Tags:
Preview:
Citation preview
The fundamentals of regional economic development
Edward W. (Ned) HillDean, Levin College of Urban AffairsCleveland State University
Edward W. (Ned) Hill 2
This is economic development and it’s a zoo
Edward W. (Ned) Hill 3
Taming the economic development zoo: Six Parts of Formal Economic Development Practice
Take away: Six short run practices that dominate practice. The supply side of the regional economy is not formally a part of the practice of economic development—but that is where the long term benefits reside.
The Great Buffalo Hunt
AttractionDeepen the base of export
products
(Exogenous Growth)
Protecting Endangered
Species
ProtectionismPolitical crisis to save
existing jobs
(Lemon socialism)Trapping Foxes
ExpansionLower operating costs
Invest in resource base (Squeezing the middle
lines of income statement)
Searching for Gazelles
Mistaken Tech Strategies
Search for fast-growth firms
Breeding Rabbits
EntrepreneurshipProduct Development Process
Innovation (Endogenous Growth)
Feeding Ostriches
AvoidanceBury your head in the sand while expecting change to take place
Edward W. (Ned) Hill 4
Why practice economic development?
o Job creationo Better incomeso Improved tax baseo Wealth creationo Less cyclicality in employmento Greater diversity of the economic base
Lesson: Employment is derived from product demand
Lesson: In economics desirable outcomes are frequently a byproduct of market activities. The best route to those outcomes is often indirect
Edward W. (Ned) Hill 5
1. Don’t be a victim
o Be realistic without being pessimistic
o Change policies and attitudes that can be changed
o Respond to opportunity within a strategic framework
Edward W. (Ned) Hill 6
2. Economic development is about products; Not jobs
o Employment is derived from product demand
o End users do not purchase technologies, they purchase products and services
o A regional economy is a portfolio of products and the technologies they embody
Edward W. (Ned) Hill 7
2. Economic development is about products; Not jobs
o The Product Cycle is real and affects strategy and implementation
o Competitive advantage changes over time as the region’s product portfolio ages
Edward W. (Ned) Hill 8
3. Productivity growth is the basis of sustained higher incomes
o The measure of economic development success is change in per capita income.
o Increases in earnings come from increases in productivity
o Understand what productivity means:
Value added per hour worked
Edward W. (Ned) Hill 9
4. Economic development is practiced through the income statement of the business
o Do you represent the world’s best place to operate the business? o Gross revenue—the top lineo Expense items—the middle lineso Labor and talent
o If not, then the business is there either through historical accident and inertia, or because of the CEO’s personal housing investment
Edward W. (Ned) Hill 10
5. Economic development is generative; Not redistributive
o Asset-based; not need-based
o Encourages community development, but is not community development
o Short term economic development policy uses your regional assets—your land, people, and talents
o Long term economic development policy invests in your regional assets—changes the quality and cost of land, people and talents
Edward W. (Ned) Hill 11
6. Build economies from areas of strength, while intentionally addressing areas of weakness
o Practice the habits of growth
o The politics of managing decline results in redistribution, not regeneration
o There is no soft landing in the American economy
o There must be some bricks and mortar transactions. You need visible successes
Edward W. (Ned) Hill 12
7. The economy is regional; the world is competitive
o All regions have effective competitors
o All municipalities have effective competitorso Both within and outside of the regiono Includes the traditional central city
o Markets will beat politics into submission over time; regions will either work effectively or the economy (investment) will vote with its feet
Edward W. (Ned) Hill 13
8. Avoid fads and silver bullet thinking; Celebrate differences and differentiators
o It is important to be distinctive, not imitative
o Avoid the public sector version of not-invented-here syndrome
o If you follow fads thoughtlessly the buzz words will be there, but content will be missing
o Avoid rubeaphobiao Definition: Fear that others
think you are a rube for what you do or who you are.
o Leads to down playing real strengths, emphasizing imagined strengths.
o Results: Prove that you are a larger rube than originally imagined
Edward W. (Ned) Hill 14
Everyone wants high-tech operations
Fight the allure of economic development fads; Do not lose sight of true competitive advantage and the power of distinctiveness; Skepticism is good.
Source: Deloitte Real Estate Services
Silicon Seaboard/Internet Coast
Media Del ReyMedia Del Rey
Silicon ValleySilicon Valley
Silicon MountainSilicon Mountain
Silicon HollowSilicon Hollow
Silicon ForestSilicon Forest
Silicon Gulch/ Silicon Hills
Silicon Gulch/ Silicon Hills
Silicon VillageSilicon VillageSilicon VineyardSilicon Vineyard
Silicon GulchSilicon Gulch
Silicon ValleySilicon ValleyMultimedia GulchMultimedia Gulch
Silicon IslandSilicon Island
Silicon BeachSilicon Beach
Digital CoastDigital Coast
Silicon DesertSilicon Desert
Cyberchella ValleyCyberchella Valley
Silicon MesaSilicon Mesa
Silicon CitySilicon City
Silicon PrairieSilicon Prairie
Telecom CorridorTelecom Corridor
Silicon FreewaySilicon Freeway
Biotech BeachBiotech Beach Silicon BayouSilicon Bayou
Silicon BeachSilicon Beach
Silicon SwampSilicon Swamp
Telecom ValleyTelecom Valley
Silicon TriangleSilicon Triangle
Silicon RiverSilicon River
Automation AlleyAutomation Alley
Silicon Tundra/ Silicon Valley NorthSilicon Tundra/ Silicon Valley North
WebPortWebPort
Silicon IslandSilicon Island
Silicon AlleySilicon Alley
Silicon Valley ForgeSilicon Valley Forge
Philicon ValleyPhilicon Valley
Silicon HollerSilicon Holler
Silicon MountainSilicon Mountain
Silicon SeaboardSilicon Seaboard
Silicon Dominion/ Silicon PlantationSilicon Dominion/ Silicon Plantation
E-CoastE-Coast
Cyber DistrictCyber District
Silicon HillSilicon Hill
Silicon NecklaceSilicon Necklace
Silicon SandbarDot CommonwealthSilicon Mountain
Silicon SandbarDot CommonwealthSilicon Mountain
Silicon SnowbankSilicon Snowbank
Silicon PlainsSilicon Plains
Silicon GlacierSilicon Glacier
Silicon OrchardSilicon Orchard
Silicon IslandSilicon Rain ForestSilicon IslandSilicon Rain Forest
8. Avoid fads and silver bullet thinking; Celebrate differences and differentiators
Edward W. (Ned) Hill 15
9. Economic development investment requires a long term strategy
o Built on a widely shared transformative vision
o Responds to near term political-economic crisis (the catalyst)
o Flexible so that respond to opportunity
o Answers the question: Who maintains the long-term civic economic development investment agenda?
Take away: Short term politics is often the enemy of long term development strategy
Edward W. (Ned) Hill 16
10. Have a conversion experience
o Business time — the length of the deal cycle
o Economic time — the length of the business cycle
o Political time — the length of the election cycle
o Economic development time — the length of the product development and innovation cycle (time required to change the product mix)
Take away: Converting economic development time into political time is critical for success
Convert economic development time into political time
Convert economic geography into political geography
Edward W. (Ned) Hill 18
What does effective leadership do?Overcomes the geographic mismatchBuilds practical, functional regionalism
o Political federal structureo Municipalityo Countyo Stateo Nationo Trading block
o Economic federal structureo Region—geography of labor & housing markets warped by
transportation costso Nationo Trading blocko Globe
Take away: Who represents the regional economy?
Edward W. (Ned) Hill 19
The contradiction of good economic development practice
Take away: Have a widely shared vision coupled with transparent practices while maintaining client confidentiality
Edward W. (Ned) Hill 20
Summary: Do the hard stuff; Fix the basics; Change the value proposition
1. Successful economies are constructed from strength and achievement
2. Innovation and product development are the keys to long term prosperity. Invest do not spend
3. Education is at the foundation of economic success
4. Skepticism is good. Do not assume or assert competitive strengths.
5. Think of technology and product development as a portfolio
One person’s pork barrel project is another person’s wise investment in the local infrastructure. Thomas Foley, Speaker of the US House of Representatives, 1989
Edward W. (Ned) Hill 21
Economic development is art and science
I think you should be more explicit here in step two
Recommended