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Edward FeserUniversity of Illinois at Urbana-Champaign
ORGANIZING FOR REGIONAL COLLABORATION IN ECONOMIC AND COMMUNITY DEVELOPMENT
Annual Meeting of the Community Development Society
Charleston, South Carolina, 23 July 2013
Five major advantages collaborative, interjurisdictional ED/CED strategy
2
1. Capturing the advantages of scale
2. Pooling and sharing scarce resources
3. Recognizing “region” as a marketable asset
4. Conserving natural resources and enhancing environmental sustainability
5. The benefits of networking
Why don’t we collaborate more?
Source: New York Times database. Includes cash grants, corporate income tax credits, sales tax exemptions or refunds, property tax abatements, low‐cost loans or loan guarantees and free services like worker training.
Total cost, 2012
Cost per capita, 2012
5
CD Specialist
Supporter, catalyst of regional—multi-jurisdictional—economic and community development strategies
Evolution in economic development practice and profession
Uncertainty in collective action in economic affairs
Shifting US/AIC economic competitive advantage and individual and household outcomes
Guides: Collaborative Regional Economic and
Community Development
1
2
34
Spoiler1. US federal, state and local economic development
institutions are deep need of reform2. Local and regional economic development should
be viewed as an integral element in national economic strategy
3. Collaborative regional development is best pursued as a joint economic and institutional collective action strategy
The new economy?
8
Rising direct and indirect foreign competition Production fragmentation and location integration Increased sectoral and functional specialization Slower job growth Polarizing wages
Low Skill Mid Skill High Skill
Wage Terciles
Education Terciles
Lousy and Lovely Jobs: United States?
Source: Feser & Renski (2012)
The new economy?
10
Rising direct and indirect foreign competition Production fragmentation and location integration Increased sectoral and functional specialization Slower job growth Polarizing wages Rising income inequality Constrained fiscal degrees of freedom
Post‐war expansion ’74‐5 ’81‐2 ’90‐1 ’00‐1
20001970 19901955 1960 1980 2010 2020
’08‐9
Kindleberger’sMaturity Hypothesis
Scitovsky: Institutional
Sclerosis
FP US Decline-o-meter
• Are we in the trough of a long wave?
• For the next wave…
– Will it occur in AICs?
– Can AICs capture same advantage if located elsewhere?
• Is sustained collective investment possible any longer in AICs?
• Do we have the political will?
Three stories
19
RDAs, LEPs, and City Deals (UK) Smart Specialisation (EU) Regional Innovation Clusters (US)
Guide to Research and Innovation Strategies for Smart Specialisations (RIS 3), May 2012
Choice & critical mass
Prioritisation based on own strengths and international specialisation (minimum of duplication across ERA)
Competitive advantage
Mobilise talent…via entrepreneurial discovery process
Connectivity& clusters
Develop “world class clusters”, “arenas for related variety/cross‐sector links internally in the region and externally”
Collaborative leadership
Public‐private partnership, quadruple helix (“giving voice to unusual suspects”)
Jurisdictional level of intervention or action
Sub‐national National International
Jurisdictionallevel defining economic challenge or opportunity
Sub‐na
tiona
l Industrial prospects traced to sub‐national characteristics and
conditions (e.g., cities and clusters). National fate left to
sub‐national policy. Devolution; sub‐national industrial policy.
Industrial prospects traced to sub‐national characteristics and conditions. Sub‐national policy options of national design and
control. Regional policy.
Industrial prospects traced to sub‐national characteristics and conditions. Policy actions of international scope and
implementation. Multi‐lateral options (e.g., regional cohesion
policy).
Nationa
l
Industrial prospects traced to national characteristics and
conditions. National fate left to sub‐national policy. Weak
central state/national policy paralysis. The national policy
vacuum.
Industrial prospects traced to national characteristics and conditions. Policy actions of
national scope and implementation. National
industrial policy.
Industrial prospects traced to national characteristics and conditions. Policy actions of international scope and
implementation. Multi‐lateral options, international cohesion
policy.
Internationa
l Industrial prospects traced to international characteristics and conditions. National fate left to
sub‐national policy. Weak central state/national policy
paralysis. The national foreign/trade policy vacuum.
Industrial prospects traced to international characteristics and conditions. Policy actions of
national scope and implementation. Strategic trade
policy.
Industrial prospects traced to international characteristics and conditions. Policy actions of international scope and implementation. Activist multilateral strategy;
integration.
References: Gore 2000, 2010; Stiglitz 2009.
Institutional design of economic policy action
Jurisdictional level of intervention or action
Sub‐national National International
Jurisdictionallevel defining economic challenge or opportunity
Sub‐na
tiona
l Industrial prospects traced to sub‐national characteristics and
conditions (e.g., cities and clusters). National fate left to
sub‐national policy. Devolution; sub‐national industrial policy.
Industrial prospects traced to sub‐national characteristics and conditions. Sub‐national policy options of national design and
control. Regional policy.
Industrial prospects traced to sub‐national characteristics and conditions. Policy actions of international scope and
implementation. Multi‐lateral options (e.g., regional cohesion
policy).
Nationa
l
Industrial prospects traced to national characteristics and
conditions. National fate left to sub‐national policy. Weak
central state/national policy paralysis. The national policy
vacuum.
Industrial prospects traced to national characteristics and conditions. Policy actions of
national scope and implementation. National
industrial policy.
Industrial prospects traced to national characteristics and conditions. Policy actions of international scope and
implementation. Multi‐lateral options, international cohesion
policy.
Internationa
l Industrial prospects traced to international characteristics and conditions. National fate left to
sub‐national policy. Weak central state/national policy
paralysis. The national foreign/trade policy vacuum.
Industrial prospects traced to international characteristics and conditions. Policy actions of
national scope and implementation. Strategic trade
policy.
Industrial prospects traced to international characteristics and conditions. Policy actions of international scope and implementation. Activist multilateral strategy;
integration.
References: Gore 2000, 2010; Stiglitz 2009.
Institutional design of economic policy action
A changing practice
25
Traditional measures of success suggest failure
“New economy” demands flexibility, custom strategy
Organizations facing program lock-in
Personnel turnover, shifting skill set needs
Rising primacy of workforce development
Local development coalitions fracturing
Local understanding of LED/CED remains rudimentary
Growing inability to ignore land use
Aging community leadership
State economic development reformSummary of Recent Public‐Private Economic Development Initiatives, by U.S. StateState Date Initiative or New Organization Charge/Mission
Alabama 2011 Alabama Economic Development Alliance Strategic planning and coordination.
Arizona 2011 Arizona Commerce Authority Lead unit in economic development.
California 2010 Governor’s Office of Economic Development Lead ED unit and business one‐stop shop.
Florida 2011 Department of Economic Opportunity Lead ED unit.
Georgia 2011 Georgia Competitiveness Initiative Strategic planning.
Iowa 2011 Partnership for Economic Progress General reorganization creating Economic Development Authority (lead organization), Economic Development Corporation (grants and incentives vehicle), and Economic Progress Partnership (strategic planning).
Kansas 2011 Council of Economic Advisors Strategic planning and coordination; policy and agency performance evaluation; research.
Nevada 2011 Advisory Council on Economic Development and Board of Economic Development
Strategic planning and coordination.
New Jersey 2010 Choose New Jersey Marketing and strategic planning.
Ohio 2011 JobsOhio, Inc. Lead ED unit.
Rhode Island 2010 Expansion of Rhode Island Economic Development Corporation governing board.
Lead ED unit.
Wisconsin 2010 Wisconsin Economic Development Corporation1 Lead ED unit.
Source: Feser & Poole (2011). 1Proposed.
28
CD Specialist
Supporter, catalyst of regional—multi-jurisdictional—economic and community development strategies
Evolution in economic development practice and profession
Uncertainty in collective action in economic affairs
Shifting US/AIC economic competitive advantage and individual and household outcomes
Guides: Collaborative Regional Economic and
Community Development
1
2
34
How to approach
29
As a strategy problem that blends economic and collective action solutions There is no one size fits all
Understand the reasons place competition persists Understand and counter barriers to collaboration Build a legacy of collaboration over time
Strategy
30
DiagnosisChallenge or opportunity
Reduced complexity
Explanation and domain of action
Guiding policyThe signpost, the channeling of action
ActionsCoherence
Consistent, coordinated
Why place competition?
The persistent logic of competition among neighboring places Most ED organizations serve
specific jurisdictions
Communities “prefer” different mixes of services, programs, and taxes
Not all elements of an ED strategy benefit significantly from collaboration
Rectifiable factors driving needless or detrimental competition The lack of advocates for
collaboration within jurisdictions
Mistrust traced to history of interactions among jurisdictions
Ignorance of areas of policy and programming that would most benefit from collaboration
Differing resource constraints and opportunity sets facing potential partners
31
Competition can make sense But sometimes it doesn’t
Cooperation, competition, or “coopetition”?
32
Collaboration need not be not an either-or proposition
Cooperation in one arena (or on one issue) can co-exist with competition in another arena (or on another issue)
Ideal is a spirit of competition and not a sense of warfare
Collaboration will not always occur with the same partners or in the same regional configuration
“Region” should be viewed flexibly, i.e., not as a fixed entity
Areas of competition should be open and jointly acknowledged in order to maintain trust required for cooperation in selected arenas
The flexibility of “region”
33
Todd Letts, Former President and CEO, Greater Kitchener Waterloo Chamber of Commerce
“The concept of concurrent regionalism, that is, many regional initiatives occurring at the same time, is not uncommon. The definition of region is dependent not only upon geography but the issue, individuals and organizations involved.”
“Optimizing Regional Economic Development Impact: An Essay on the Role of the Chamber,” in Strong Economies and Strong Communities: Regional Chamber Strategies for Growth, American Chamber of Commerce Executives, 2008.
34
Quality of service/outcomes hard to define/measure
Very different demographics
Political over professional management
Short political and/or professional tenures
Very different political structures
Weak networks
Limited history of success in collaboration
Barriers
Build local technical capacity
Within jurisdictions
Between jurisdictionsFactor in distance
Educate
Shift form of government
Clarify roles
Lengthen tenures
Reward professional standards and competence
Cultivate bridging ties
Cultivate clustered networks
Reform structures
Build from simple to complex
Main points
36
Collaborative regional development is a matter of joining economic strategy to a workable model of collective action
Success in regional development is contingent on reform at state and federal levels
We’ll succeed if we can move past a generic understanding of the role of government in economic affairs