Smart economic development is an approach that promotes the use of technology in managing economic resources to increase productivity, enhance efficiency, reduce expenditures, and increase GDP.

1. Local Economic Development –
A Smart Approach
Dr. Sam Musa
1/1/2020

2. Local Economic Development
• Economic development is a process and best practices to
improve the quality of life and the well-being of
residents.
• A goal of economic development is to develop industry
clusters

3. Industrial Clusters (1)
• A cluster is a local concentration of similar or related industries
– Wall Street, Hollywood, and Silicon Valley are great examples.
• Industrial clusters consist of interconnected businesses,
suppliers, workers, research institutes, and government agencies.
• The goal of industry clusters is to promote competitive
advantages and increase economic growth.

4. Industrial Clusters (2)
• Location and inputs are still crucial to competition; however,
businesses must be creative, more productive, and focus on
HOW to compete; the impact of social media, cloud
computing, offshoring, and cheap labor must be considered.

5. Economic Growth
• Economic growth refers to an increase in the Gross
Domestic Product (GDP); it focuses on the value-added
and using economic resources wisely.

6. Economic Resources
• Economic resources are factors of production, and
economists divide them into four major categories: Land,
Labor, Capital, and Entrepreneurship.
• Resources are limited, and as populations in cities and towns
increase, challenges to sustainable economic development
and essential community services also increase.

7. Land
• Land includes natural resources used in production
• Oil, mineral, forests, water, and water resources

8. Capital
• Capital includes all tools and elements aiding in the
production of consumer goods and services. Factories,
schools, plants, universities, manufacturing equipment,
computers, and software – all fall under capital.
• Economists, however, consider money as a means, not
capital, for purchasing capital goods.

9. Entrepreneurship
• Entrepreneurship also includes leadership, visions,
innovations, planning, and execution of economic
initiatives. The entrepreneurs use all resources above to
produce goods and services.

10. Cities’ Challenges
• Some of the top challenges cities are facing include aged
infrastructure, traffic congestion, high crime rates, lack of
clean water, unemployment, poverty, and other stressors
• There is a need for smart solutions to boost economic
development, expand access to health care, housing,
education, and other social services.

11. Smart Economic Development (1)
• Smart economic development is an approach that promotes the use
of technology in managing economic resources to increase
productivity, enhance efficiency, reduce expenditures, and increase
GDP.
• Smart economic development leverages smart city solutions, such as
sensors and GIS technologies, to reduce crimes, create jobs, lower
poverty, increase income, and foster GIS-based urban planning.

12. Smart Economic Development (2)
• This approach aids economists and policy-makers in
producing data-driven policies – data mining for
relationships and trends provides a feedback mechanism
for such policies that enable smarter and more agile
responses to economic stressors.

14. Smart Vision
• The smart local economic development process map
starts with a vision – a vision that is set by local officials
and other actors. The vision focuses on where the
community is headed.

15. Smart Policy
• A policy then needs to be created to serve as a principle
of action – to legitimize the initiatives, strategies, and
plans needed to execute the smart vision.

16. Smart Strategy
• The local government needs to create then a strategy to
focus on short-term and long-term goals. The strategy
should engage local actors and needs to focus on how to
use local resources wisely. A strategy is living documents
and must be updated periodically to reflect the residents’
needs.

17. Economic Development Actors
• While the local government is responsible for creating the
strategies and producing policies, other actors, such as
investors, Non-Government Organizations (NGOs),
utility companies, universities, and entrepreneurs, are
equally responsible and play critical roles in local
economic development; no actor can succeed alone.

18. Universities’ Roles
• Universities play a critical role in economic development
by bringing talent, educated workforce, innovation,
proof-of-concept, and commercializing products.

19. Smart Technological Solutions
• Smart technological solutions, such as sensors, the Internet of
Things, GIS, and Global Positioning System (GPS) technologies,
can also be integrated with many sectors to enhance services.
• Smart technologies have changed cities in many ways, such as
infrastructure, communications, education, and social interaction;
smart technologies serve as the foundation of a smart city.

20. GIS (1)
• The role of GIS in smart cities is to integrate different
data acquired by sensors in real-time and provide better
decisions. GIS helps in identifying knowledge and
avoiding incomplete or inaccurate assumptions due to
knowledge gaps.

21. GIS (2)
• Gun detectors and GIS technologies can be used to
reduce crimes by geographically spotting areas with high
crime rates, identifying specific crime patterns, or by
detecting gun sounds and reporting it to law
enforcement.

22. Globalization
• International Trade
• International Capital Flows
• International Labor Migration
• Global Value Chains

23. Globalization & Local Economy
• Local Economies are connected by trade, culture,
transport, and financial flow
• Foreign and Direct Investments (FDI)
• FDI has direct-positive impacts local economy

24. Direct Investments
• North America, Europe, Central and East Asia receive
the most
• Africa receives the least direct investments
• Paris, Tokyo, London, New York, Shanghai, and Dubai
are cities that receive the most

25. Measures Effect Sustainability of Cities
• Population, Urbanization, and Public Administration
have significant effect on sustainability
• Alderson and Beckfield (2004) argue that the world cities
local economy is determined by their position within the
global investments.

26. Conclusion
• In order to put smart economic development solutions into work affectively
across sectors, city officials need to develop a smart economic development
strategy. The strategy needs to include a vision, policy, incentives, education,
and methods for working with different actors – NGOs, entrepreneurs,
investors, utility companies, farmers, public school systems, and universities.
• Smart economic development leverages smart city solutions to reduce
crimes, create jobs, lower poverty, increase income, and foster GIS-based
urban planning. Smart economic development requires governments’
dedication, vision, incentives, and leadership.