Article 3: Where is Economic Development Headed?

This article picks up where Article 2 (June 22) left off. My last thoughts were about why and how a future-cast of economic development should be undertaken. In that regard, I said that the future-cast could provide all EDO's with a more coherent overall context in which to approach their future planning and action. Moreover, that the future-cast might be best accomplished on a state-by-state basis for both pragmatic reasons and to ensure that the common structural economic, political (governmental) and social characteristics of particular states are considered in the future-cast.

Economic developers understand that economic development does not stop at local and state borders because businesses, industries, economies, technological systems, markets and people's lives extend beyond local and state boundaries. On an intellectual level, economic developers understand this. Some economic developers fight these relationships because they see them in competitive instead of collaborative terms. The "zero-sum" model of economic development is still very much alive and well, even with the progress we have made in advancing regional approaches to economic development. Just stop and think about your own area. The "I win, you lose" paradigm is in my judgment a very simplistic model of competition. I think even the Michael Porter, the competitiveness czar, would agree with that statement.

What's the alternative? It is the "interdependent system model of competition," which is increasing driven by the rapidly emerging global economy. The future-cast could help us understand how to make this new model work. What does the new model offer that the old one doesn't? I think it is a better shot at "sustainability." What is sustainability in the context of economic development? It's renewal...the capacity for local economies, communities, businesses and people to renew themselves, preserve and create value and adapt to change. Sustainability is also about ensuring that we truly understand the impact that the sum of all ED efforts have on society. Is this impact fundamentally favorable or positive, or is it fundamentally unfavorable and negative? Moreover, how do we function in the future in a way that contributes to a more favorable overall impact on society? We really do not have a way to answer this question right now, and I think we should be working toward an answer.

Connectivity to the global economy has grown in recent decades--propelled in large part by businesses in search of new opportunities, and technology, which has extended our personal and business reach in almost all directions. I think it is a valid assumption to make in the ED future-cast that this connectivity will continue to grow, even in directions that we cannot identify today. Our connectivity can be impeded by world events. Just look at the impact of SARS on business connections, or the impact of terrorism on trade and tourism. These larger events impact all of us--not just the world's largest urban centers. The future-cast, done right, can help us understand these larger events and envision emerging new connections.

As I look at local and state economies across America and the world, I see a myriad of inter-relations that link and bind them together. This "interdependence" speaks to the need for greater shared understanding of the national economic system, as it is organized by state. It also speaks to the need for economic developers to take this interdependence into greater consideration as they fashion future local and state policies, strategies and programs. Many geographic areas share the same major industries and industry clusters in common. In this light, would it make sense for them to work together to advance the needs and potential of their shared industries and also ensure that their programming has a net positive impact on those people and places affected?

There is a role for the Federal Government in helping the national ED system grow and develop in ways that have a positive/favorable impact on American society. That role is not one of control, rather one of supporting, encouraging and linking local areas in the system. The Federal Government should reward those places that work together and contribute more to society. That is a logical direction in which to focus our "incentives," not in helping one local place clobber another in a competitive battle for a business and jobs.

This is my break point for today. Look for the next installment. We will build from here.