Economic Development from the State and Local Perspective: Case Studies and Public Policy Debates

By D. Robinson

This definitive work mixes case law, public policy, economic strategy, and examines the wide range of issues facing efforts to improve the American economy, to illustrate how economic growth is driven through strong public-private partnerships, and how successful growth strategies from the state and local level operate to grow jobs.

• Language: English
• Publisher: Palgrave Macmillan
• Release date: Sep 17, 2014
• ISBN: 9781137317490

Book preview

ECONOMIC DEVELOPMENT FROM THE STATE AND LOCAL PERSPECTIVE

CASE STUDIES AND PUBLIC POLICY DEBATES

DAVID J. ROBINSON

ECONOMIC DEVELOPMENT FROM THE STATE AND LOCAL PERSPECTIVE

Copyright © David J. Robinson, 2014.

All rights reserved.

This publication has been created to provide you with accurate and authoritative information concerning the subject matter covered. However, this publication was not necessarily prepared by persons licensed to practice law in a particular jurisdiction. The author is not engaged in rendering legal or other professional advice, and this publication is not a substitute for the advice of an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.

First published in 2014 by

PALGRAVE MACMILLAN®

in the United States—a division of St. Martin’s Press LLC,

175 Fifth Avenue, New York, NY 10010.

Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS.

Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world.

Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries.

ISBN: 978–1–137–32066–7 (hc)

ISBN: 978–1–137–32067–4 (pbk)

Library of Congress Cataloging-in-Publication Data

Robinson, David J., 1966–

Economic development from the state & local perspective : case studies and public policy debates / by David J. Robinson.

   pages cm

Includes index.

ISBN 978–1–137–32066–7 (hardback : alk. paper)

ISBN 978–1–137–32067–4 (pbk.)

1. United States—Economic policy—21st century. 2. Economic development—United States. 3. State governments—United States. 4. Local government—United States. I. Title.

HC106.83.R635 2014

338.973—dc23                              2014010221

A catalogue record of the book is available from the British Library.

Design by Newgen Knowledge Works (P) Ltd., Chennai, India.

First edition: September 2014

10  9  8  7  6  5  4  3  2  1

This book is dedicated to my wife, Julie Dorrian, and son, Hugh, for the love and support they gave me in the endeavor to research and write this book.

CONTENTS

List of Illustrations

Preface

Acknowledgments

Notes

Index

ILLUSTRATIONS

Figures

Tables

PREFACE

Restarting the American economy is today’s number one public policy priority. Public and private sector organizations across the United States are struggling with how to revive the American economy to not only employ people and create wealth but also to keep America on top of the global economy. Most of the action creating jobs and wealth occurs at the state and local levels. The federal government is primarily a funder of economic activity and regulator of money supply, global trade, labor laws, provider of national defense, and an overall social safety net.

Economic development is a game played at the state and local levels. This book is a discussion about that game, how it is played, and how it is won. This book is not meant to be a treatise on the topics covered in economic development and is certainly not a complete discussion of any of the topics. Instead, this book attempts to cover the major issues facing economic development practitioners. To keep the approach practical, economic development strategy, public policy, and real estate development issues are covered.

No single formula exists for successful economic development. Regions and states have different assets and liabilities that mandate certain strategies and make others impractical. Successful economic development is not the result of one major real estate project or even a series of it. Successful economic development happens where regions and states focus on building block strategies and then move onto more advanced drivers of economic development. Nearly all communities implement some or all the building blocks of economic development. These strategies focus on zoning land for development as well as gaining land for development through annexation and eminent domain. These elementary strategies include the use of tax policy to retain and attract companies and the development of workforce programs. Infrastructure development is a pivot strategy for economic development practitioners. The building blocks of economic development finally address quality-of-life issues such as making neighborhoods safe, ensuring families have good schools, creating a base of affordable housing, and providing cultural and entertainment options people desire.

Those quality-of-life issues are the starting line for economic development. The next step is implementation of the five drivers of economic development. These more advanced strategies of economic development center on technology, energy, globalism, service, and advanced manufacturing. Regions and states leading the nation in economic growth follow one or more of these proactive strategies. They go far beyond the traditional building blocks of economic development and create advanced strategies around core regional strengths in growing industry segments.

Focus of the Book

The beginning chapters introduce core economic development concepts and a case study that will be used throughout the class. The book proceeds to fundamental issues impacting the economic development, defined as building blocks. Finally, the book discusses the more advanced proactive economic development strategies, defined as the five drivers of economic development. It utilizes a common-class case study throughout the book and examines the issues facing local and state economic developers, starting with the most basic and moving up to the more complex and advanced.

Chapter 1 introduces core economic development and lays a foundation for the rests of the book. Chapter 2 outlines how regions and states prepare and implement a strategic economic development plan. It discusses the process, issues, and theories regions and states face when planning to increase wealth creation. Chapter 3 outlines the roles of local, state, and federal governments and the growing role of the private sector in the business of economic development. This chapter discusses how American regions and states approach and implement economic development.

Chapter 4 introduces the case study to readers, which will be used throughout the book. A case study approach brings the real-life issues facing local and state economic development leaders and introduces the reader to all the players involved in an economic development project. It also helps the reader develop critical thinking, speaking, writing, and advocacy skills needed for successful economic development. The book’s case study creates a mythical city project that has the traditional complexity facing big urban economic development projects and illustrates how economic development is much more than tax incentives. Stories on crime, zoning, workforce, tax, eminent domain, infrastructure development, annexation, smart growth, housing, sustainable development, technology-based economic development, and globalism fill the book’s case study.

Following the chapters that introduce basic concepts of economic development and the case study, the book explores the first level of sophistication for local and state economic development, defined as the building blocks. The introduction of the book’s true substance begins in chapter 5—the preparation of a site for development that must have a use permitted typically by local government zoning rules. This chapter digs into the first land use issue related to economic development, and this is zoning.

Chapter 6 continues the land use discussion with an examination of the role of eminent domain in economic development. Eminent domain is a land use issue impacting the economic developer’s ability to assemble land for wealth creation purposes. Policy makers and courts impact eminent domain. Multiple states’ approaches to eminent domain will be examined, and the readers will find themselves arguing in a city council meeting regarding the good and bad of eminent domain. Chapter 7 concludes the discussion of land use issues by examining how growth laws and policies impact economic development through annexation policy. This discussion center on annexation (adding land to a municipality) and examines how states like Arizona and Texas use annexation as an economic development tool.

Infrastructure is the next economic development building block the book discusses. Chapter 8 examines how various public finance tools and government programs are utilized to develop the roads, highway, bridge, water, sewer, telecommunication, and other infrastructure necessary for all economic developments to happen. Particular attention is paid to the role of tax increment financing to develop infrastructure tied to economic development.

Chapter 9 addresses how workforce issues impact regional and state economic development. Hot topics such as workforce training and impact of immigration are covered in this chapter. Chapter 10 looks to the use of tax policy as a tool for developing jobs and wealth. Again, as with all the chapters, the reader will go through the case study to feel all the issues impacting the use of tax incentives as a company retention and attraction tool.

Chapter 11 examines the quality-of-life issues of safety, education, and housing that dominate and impact company location decisions. No economic development can happen where there is a perception of high crime. The book examines the policy issues facing communities that are working to address the challenge of crime. Hot topics such as gun control, conceal carry, and code enforcement are discussed. The chapter discusses how communities have addressed the challenge of crime to redevelop a neighborhood. The successful redevelopment of Times Square in New York City is used as a national model for addressing crime control. In addition, the book’s case study will take readers through the challenges of controlling crime at the local level. Chapter 11 discusses how states and regions are entering an age of education reform in their efforts to address shortcomings in the quality of secondary and primary schools. This chapter also discusses how the national housing market impacts economic development and the role the federal government plays in subsidizing this industry.

The book proceeds to inform how more advanced regions and states utilize modern economic development strategies, known as the five drivers of economic development. Chapter 12 reviews how a sustainable development model based on smart growth, historic preservation, and brownfield redevelopment can move growth more inward and less outward. This model is built around a new approach to land use policies and working to attract high-wage companies in the energy sector. Chapter 13 addresses the growing technology-based economic development model that many regions and states are using to transform their economy. Chapter 14 outlines the emerging strategies to help regions and states succeed in a growing global marketplace. Topics such as export and foreign direct investment success are discussed.

Chapter 15 outlines the challenges and solutions of today’s advanced manufacturing sector. Successful state policy moves to enrourage the manufacturing industry to grow are discussed, which include many of the building block issues and the controversial Right to Work legislation. Chapter 16 outlines the creation of a high-wage regional service economy well beyond the low-wage retail jobs many would associate with the service sector. The dependence of these industries on a quality workforce and unique infrastructure, such as global airports, is discussed. Finally, the book concludes with a discussion of what the future holds for America’s economic development at the state and local levels. The range of topics includes higher education, regionalism, new transportation funding models, green buildings, emerging global giants such as Brazil, India, and China, and cutting-edge smart growth tactics to grow more in than out.

Economic Developers Are Problem Solvers

Economic development involves problem solvers and starters. Both these roles are often played by policy makers, lawyers, community leaders, developers, labor unions, central city activists, business leaders, educators, and regular citizens. Policy makers are the ultimate decision makers who must address economic issues. The struggles, strategies, policies, and laws facing economic development leaders are the focus of this book.

Economic development strategy and planning matter; however, success lies in the execution of that strategy and plan. Economic developers are typically problem solvers. They identify the challenges as to why a region or state is not succeeding in the global economy, take stock of what resources they have to work with, and go to work solving the challenges before them.That approach of identifying challenges and providing solutions is the format of this book. This challenge to solution model may involve public policy, business, legal, or other issues, but to keep the reader in the real world, each chapter will revolve around the identification of problems and a discussion of solutions policy makers, legislators, courts, business leaders, and others have used to build successful economies.

Multidisciplinary Approach

Private sector developers, Fortune 500 CEOs, and small business leaders alone do not hold the answer to a region or state’s economic challenges. Local government planners, lawyers, judges, city council members, state legislators, governors, teachers, police officers, chamber of commerce executives, and government-funded economic development staff working collectively hold the key to economic success at the state and local levels.

Economic development is not just about good government planning. Land use planning makes a difference in the creation of quality neighborhoods. However, many community problems are not just the result of poverty but often are the results of a planner’s idea of a paradise 50 years ago. As an example, Euclidian zoning approach of land use planning and massive interstate highways that extend suburbs as far as a car can be driven are now out of favor with the majority of current urban thinkers and can be blamed as part of the reason why urban sprawl has occurred. The more popular modern approach is geared toward mixed uses, getting people out of their automobiles, and creating walkable neighborhoods. No doubt, 50 years from now, planners and economic development practitioners will be fixing the infill approach of today. A study of economic development limited to planning, community development or housing, land use issues, and in silos may fail to address the broad array of issues the local and state economic developers face on a daily basis.

Holistic Economic Development Strategy

The view of this book is that successful stragetic economic development is about more than the use of tax incentives to lower the cost of doing business at a specific site. Instead, this book addresses a broader approach to economic development that not only ensures sites are ready for development but also addresses broader issues such as crime, workforce, and infrastructure. This book is grounded in the actual practice of economic development.

While this broader, holistic approach is essential to successful economic development, this book does not lose sight of the fact that retention of existing business, development of an innovation-based economy, embracing globalism, and attracting foreign direct investment are the building blocks to twenty-first-century economic success. Studies prove that retention creates 80 percent of new jobs and that companies that export or are technology-based or a part of a global firm all pay higher wages on average. The holistic economic development strategy is centered on the retention and attraction of high-wage jobs of the future, which can achieve community success for decades to come. In addition, this book will promote a sustainable development model because it is important to not just create jobs but to create quality development that serves as magnets for future investment.

An additional bias of this book is that the private sector is the key to successful economic development. Post–World War II, the focus of most private sector development has centered on the suburbs. While an upward urban trend was starting to gain movement, the current financial services and real estate–based economic recession has halted that movement. The long-term solution to economic development, no matter where it is, does not lie in government programs or dollars but in attracting massive private investment.

In an age of declining government revenues, the federal government alone lacks the resources to address the challenges of economic development. Successful economic development happens most often because of private sector risk taking and regions and states creating a positive business climate and utilizing target incentives. Most successful development stories have a strong element of the public sector harnessing the power and capital of the private sector. This book discusses how the government uses the law and public policy to create incentives for private sector investments to create a quality sense of place by tacking crime, schools, and infrastructure.

Economic development is clearly the topic of our time. A national recession has everyone looking for ways to transform their economy. This book outlines the road to economic recovery through regional and state action.

DAVID J. ROBINSON

ACKNOWLEDGMENTS

I acknowledge the support, work, and wisdom of a number of individuals without which this book would have not made it to publication. First, my friend and colleague, Steve Brennen, provided invaluable perspective and research for this book. Steve’s career in economic development at the federal, state, and local levels provided great insight. Much thanks go to the leadership of The Ohio State University John Glenn School of Public Affairs—Director Trevor Brown and Professor Rob Greenbaum—for their support and for giving me the opportunity to teach an Economic Development Policy course. That teaching experience is the basis for this book. Thanks also go to Bowling Green State University economics professor and Director of the Center for Regional Development, Michael Carroll, for his wisdom and support for this book. Finally, the team at Porter Wright Morris & Arthur, LLP, Andy Emerson and Dan Massey in particular, provided friendship and wisdom as well on a range of topics.

CHAPTER ONE

DEFINING ECONOMIC DEVELOPMENT

Chapter Goals

1. Understand the elements of economic development

2. Recognize the difference between economic development, real estate development, and community development

3. Understand who implements economic development policy and why

4. Identify the basic building block economic development strategies

5. Identify the advanced five drivers economic development strategies

Economic Development Is a Public Policy Solution

Economic development is a public policy solution to the challenges of a global, high-tech economy in the age of a jobless economic recovery. Economic development takes the form of government incentives and subsidies to encourage private sector wealth creation.¹ The federal government impacts the economy but does not dictate a national economic development strategy. Instead, vibrant regional and state economies are created through local and state public-private partnerships.

The United States faces economic problems based upon a new global, high-tech economy that impacts wealth and job creation. The United States has the largest economy in the world—constituting more than 20 percent of the world’s gross national product (GDP).² However, by 2030, the Chinese economy will represent well over 20 percent of global GDP and will be larger than the US economy as Figure 1.1 shows.³

On top of new global economic challenges, America is facing a jobless economic recovery. The unemployment rate even during the current period of economic growth does not reflect the traditional rate of decline followed in previous recessions. Traditionally, the American economy follows a V-shaped recovery from recessions. A steep collapse is followed by a steep recovery back up. However, the last three economic recessions have not followed this pattern, and Americans are facing a jobless recovery with above-average unemployment rates.⁴

Technology transformed the American economy. The expansion of global markets and explosion of technology in all industries put America through a great period of creative destruction.⁵ The process of creative destruction argues that greater economic gain comes from the new industry and innovation killing the old. Creative destruction explains the constant evolution and success of capitalistic markets, but the ride along the creative destruction roller coaster is not fun for everyone. It now takes only 170 workers to produce what it used to take 1,000 workers to produce in 1950.⁶ Nationally, with only 10 percent of Americans working in the high-wage manufacturing sector, down from 33 percent in 1950s, a large number of American workers are searching for high-paying jobs.⁷

Figure 1.1   Emergence of Chinese economy over the American economy.

Source:  Asa Johansson, et. al. Looking to 2060: Long-Term Global Growth Prospects: A Going for Growth Report, OECD Economic Policy Papers, No. 3 (2012), p. 22.

The economic challenges of the state of Michigan illustrate the public policy problem the economic development policy is meant to solve. In the 1950s, Michigan was an economic miracle. In 1954, Michigan’s per capita income was at 120 percent of the national average.⁸ By the early 1960s, half the state’s economy was based upon manufacturing.⁹ From the 1950s into the early part of the twenty-first century, Michigan’s economy experienced a dramatic decline as the high-paying manufacturing sector dropped to just over 10 percent of the state’s economy by 2009, and the per capita income for the state was just 87 percent of the national average.¹⁰ The once-powerful city of Detroit is being evacuated. Detroit had 1,849,568 residents in 1950 and now is hovering near 700,000.¹¹ American public policy makers are working to avoid Michigan’s challenges.

Economic Development Is Played at the Local and State Levels

To address the challenges of wealth creation, government in partnership with the private sector implements economic development strategies. Government devotes resources to economic development based upon the concept of public good. A public good can be defined as those things that all people can enjoy in common because their use does not subtract from others’ use of the same good.¹² Examples of public goods include clean drinking water and air, quality medical care, sanitation systems and schools, safe streets, and successful economic development. Economic development is a public good because it creates the wealth people need to live. The more economic success individuals have, the larger the private market and government tax revenues grow to provide the resources everyone needs to succeed.

Local and state governments take the lead in the retention and attraction of jobs and companies. The federal government defines the legal and constitutional powers of government to regulate private industry and implements monetary, fiscal, trade, labor, and other laws at the national level. It funds a range of programs used by local and state governments and private sector companies to foster economic development. It adopts broad full employment goals but does not mandate a national economic plan. Instead, a federalist approach dominates where local and state governments take the lead in implementing economic development strategies.

Economic Development versus Real Estate Development versus Community Development

Economic development differs from real estate development and community development. Economic development creates a higher standard of living for its residents. Its focus on retaining and attracting higher-wage jobs and developing companies provides a stronger tax base for local government and schools. These essential public services help develop a world-class quality of life.

Economic development differs from real estate development and traditional notions of community development. At times they all overlap, but at their core the goals of each are different. Economic development involves the use of public subsidies to incentivize private sector wealth creation. Real estate development is the continual reconfiguration of the built environment to meet society’s needs.¹³ It may or may not create high-wage jobs. Real estate development improves a parcel of land to increase its value. Real estate developers turn a cornfield into a housing project or an abandoned factory into a shopping center. Houses and shopping centers are part of a strong regional economy, but often they do not contain high-wealth jobs. While not always focused on attracting high-wage jobs, real estate developers can be a part of a team focusing on economic development.

Community development is the opposite of real estate development. It focuses on equality of opportunity. The goal of community developers is to address poverty through affordable housing, workforce training, and small business financing strategies. Many of their outcomes are aligned with economic development, but community developers are looking to improve the quality of life of a targeted neighborhood. They focus on locating regional resources in a neighborhood struggling with crime, inadequate housing, unemployment, and aging infrastructure. Community and economic development may overlap. Everyone wants high-wage jobs of the future. But, high-crime neighborhoods with residents with low educational attainment are not attractive sites for the location of high-wage jobs.

Economic Development: Regional, State, and Industry Winners

In a nation with wage rates and government regulatory burdens far above China and unemployment above normal levels, American engagement in economic development policy is a fact of life. As Washington continues to debate, posture, and argue, regions and states are incentivizing wealth creation through economic development strategies. Not every place in the United States is Detroit. Success stories of regional and state economic development can be found in the four corners of the United States.

Using per capita income as a measure of economic development success, Connecticut, New Jersey, Massachusetts, New York, and Maryland dominate.¹⁴ The East Coast benefits from substantial population density, high college education rates, large presence of global corporate headquarters, and an urban renaissance of America’s largest cities. New York City drives much of this economic development. With 8,200,000 residents, New York City is not only the nation’s largest city, but its population grew by over a million since 1980.¹⁵ New York City’s 3,200,000 private sector jobs is near an all-time high.¹⁶ The Big Apple operates a modern service economy, with financial services and real estate constituting 12 percent of the regional economy and professional services and health care constituting 15 percent and 16 percent, respectively.¹⁷ New York City’s economic renaissance is linked to quality-of-life improvements matched with financial incentives to retain and grow the financial services industry. New York City is an example that a high-wage, high-cost city can serve as success story of economic development.

Per capita income is not the only measure of economic success. A measure of only income ignores the high cost of living many of these regions endure. Figure 1.2 illustrates wage and employment rates and their overall growth are also measures of economic development.

Industry sectors influence the economic success of a region. Recent economic winners from employment and wage perspective are dominated by energy and agriculture markets. The energy-oriented economies of North Dakota, South Dakota, Wyoming, Louisiana, and Iowa illustrate the most growth in per capita income from 1990 to 2012. The North Dakota boom is remarkable and based upon the exploration of oil and natural gas from once-dominant shale deposits. In 2012, North Dakota’s GDP led the nation with a 13.4 percent increase.¹⁸ This rate of growth is larger than China and more than twice the growth rate of second-place Texas. Policy makers and business leaders make decisions impacting the region’s ability to grow an energy market. The availability of a low-cost energy source in North Dakota positions this state and others for future industrial growth. North Dakota is only starting to gain energy-related jobs and yet they still lead the nation in GDP growth.

Figure 1.2   State employment and wage winners.

Source:  United States Bureau of Labor Statistics, Retrieved from http://www.bls.gov/home.htm.

Figure 1.3   Growth opportunities based upon shale energy resource.

Source:  U.S. Department of Energy, Energy Information Agency, Lower 48 Shale Map, retrieved from http://www.eia.gov/oil_gas/rpd/shale_gas.pdf.

As Figure 1.3 illustrates, North Dakota is not alone in gaining from the development of energy and jobs from shale gas. Regions across the United States are benefiting from the use of new technology to extract domestic energy. A handful of regions and states blessed with an energy resource takes that advantage to new heights. Texas offers one such example. The economic development story of Texas is well known. The lone star state is booming. Texas’ real GDP grew 13 percent from 2009 to 2012.¹⁹ While Texas grew, major states such as California struggled. California’s share of the American economy shrank from 13.1 percent to 12.9 percent during 2009–2012.²⁰ Texas’ portion of the American economy increased from 8.2 percent to 9 percent during this same timeframe.²¹ Again, Texas is benefiting from the energy boom, but the state uses a $300,000,000 economic development incentive to retain and recruit companies across the globe, operates without a state income tax, and offers manufacturers’ labor policies they like.

Energy is not the only source of economic success in the United States. The birth of the American manufacturing industry in the south is another example of an economic winner. The southern region of the United States is experiencing an economic renaissance around the recruitment of global manufacturing facilities. States such as Alabama, Tennessee, and Mississippi landed global auto, steel, and aerospace factories producing billions if not trillions of dollars in economic impact. As the auto and steel industry jobs evacuated the industrial midwest over the past 40 years, these jobs landed in southern states. Alabama has as many auto assembly plants as Ohio with half the population. Again, this global economic success did not happen by accident. The Southern American manufacturing industry was recruited by low-wage costs and business-friendly tax and labor policies.

Other economic development lists exist as well. These lists are of the economic losers. The industrial midwest is struggling, but even these states show prospects of success. Ohio’s $1,600,000,000 technology commercialization program is building a new generation of high-tech companies. Cleveland is becoming the center of an emerging medical device industries attracting millions of dollars of investment. Ohio is also benefiting from an explosion of shale oil and natural gas that is starting the Buckeye State on the path North and South Dakota blazed. State policy makers and business leaders push Ohio in this economic direction by making investment decisions with government resources and adopting policies friendly to business.

Regional and State Economic Development Strategies Build Success

How do these regions and states find their own path to economic development success? Regional and state economic development strategies are either basic building block or more advanced, proactive strategies, known as the five drivers of economic development. All regions and states implement building block economic development strategies, preparing sites for development through land use planning, annexation, and eminent domain. Building block strategies also address infrastructure development, workforce, tax policy, and quality-of-life issues. These fundamental economic development strategies are the floor and not the ceiling. They cannot be overlooked. Larger, proactive efforts to retain and attract high-wage jobs center around the use of building block economic development strategies but targeted toward high-wage industry clusters.

A number of select industries provide high-wage jobs, wages above the national average. Manufacturing has long led the list of high-wage industries in many parts of the United States. More recently, high-tech and service industry occupations have led an economic renaissance in many regions of the country. Also, firms that participate in the global economy through foreign ownership or exports pay above-average wages.²² Finally, companies in the energy industry are current economic leaders.²³ High-wage energy, technology, manufacturing, global, and service industries constitute the five drivers of successful economic development. Regions and states truly succeeding in developing high-wage jobs implement strategies around the five drivers of economic development that include energy, technology, globalism, advanced manufacturing, and service. The five drivers of economic development happen in regions and states that offer all the benefits of basic economic development but succeed at attracting high-wage jobs in targeted industries. The five drivers of economic development focus on high-wage energy, high-tech, global, advanced manufacturing, and service industries. Figure 1.4 provides an outline of specific examples of both the building blocks and five drivers of economic development strategy.

Figure 1.4   Primary state and local economic development strategies.

Source:  Self Created.

Oregon and Economic Development Strategic Planning

Fundamental to success in economic development is the implementation of a strategic plan to promote the creation of jobs and wealth. The essential elements of a strategic economic development plan start with reaching consensus on community economic goals; creating measurable objectives that define the plan’s success; developing economic development strategies that fit a region’s strengths, weaknesses, opportunities, and threats; and finally creating a list of action steps to make the economic development goal a reality. Policy makers and business leaders use economic development organizations, both public and private sector, to implement economic development strategies. Oregon is an economic winner based in large part on implementing an effective economic development plan. Oregon went after green jobs and they are getting them. Oregon’s strategies to gain green jobs involved more than their traditional smart growth land use tactics, but it also included regulatory approaches supporting renewable energy and tax incentives targeted at alternative energy companies. Portland, as Oregon’s economic center, uses a public-private partnership to drive its economic development strategy with strong participation of both local government and private industry leadership. Oregon is a leader in green jobs and, in particular, grew manufacturing jobs in the alternative energy industry.

Land Use and Houston

The regulation of land use is central to building block economic development strategies. Successful economic development is not possible without a stable and predictable legal process to purchase and develop real estate.²⁴ Local government manages the growth and development through a comprehensive plan that sets the overall goals, objectives, and policies to guide the local legislative body’s decision making regarding the development of a region or community. Zoning is the prime tool local governments use to regulate land use and implement their comprehensive plan. Zoning divides the land within a jurisdiction into districts with varying restrictions on uses (such as size and location of buildings, yard areas, and intensity). As zoning approaches its hundredth