Economic development efforts in cities and metro areas should focus on helping established and emerging firms and industries, rather than recruiting new companies, according to a new report by the Brookings Metropolitan Policy Program.
Conventional economic development remains “largely misaligned” with what matters, the report says. In addition to favoring recruitment over helping existing businesses, economic development too often relies on taxpayer-funded incentives and remains largely reactive, driven by deals in the pipeline.
However, the report says change is underway and calls for a broader vision of economic development. Part of that should be resolving disparities by race and location.
“Public- and private-sector leaders in metro areas have a responsibility to shed wasteful strategies and embrace those that can create better jobs and opportunities for the wider community,” said Amy Liu, director of Brookings’ Metropolitan Policy Program.
In addition of focusing on growth from within, the framework for “remaking economic development” includes four other action principles:
- Set the right goals. Expand the scope of economic development to both grow the economy and provide more opportunity.
- Boost trade. Facilitate export growth and trade with U.S. and global markets to deepen specialization and attract investment.
- Invest in people and skills. Incorporate skills development of workers as a priority for economic development and employers.
- Connect place. Harness regional markets and connect local communities to jobs, housing, and opportunity.