Presentation to the Mid-Atlantic Community Development Institute on definitions of economic development, trends impacting the need for economic development, and frameworks for acting on local economic development.

1. Intro to Economic Development
CDI Mid-Atlantic
July 26, 2023
Troy Mix
Associate Director, Institute for Public Administration
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2. 1 Institute for Public Administration www.ipa.udel.edu
Agenda for today
1. What? Define economic development
2. Why? Discuss the need for economic development
– Review of major trends and material needs to
address
3. How? Expose you to frameworks for thinking about +
acting on local economic development
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WHAT IS ECONOMIC DEVELOPMENT?

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Economic growth and development
Economic Growth
– Quantitative increase
More jobs; Higher incomes; More people; More office space
Economic development
– Qualitative improvement
Enhanced workforce capabilities; Higher educational attainment; Happier,
healthier, more prosperous residents

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My preferred definition of
economic development
“intersection of public policy and private
commerce for job and wealth creation.”
Jesse White, former federal co-chair, Appalachian
Regional Commission
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Who/where are economic developers?
• Regional, state, county, and city economic development
organizations
• Chambers of commerce and other business support agencies
• Community and neighborhood development organizations
• Technology development agencies
• Utility companies
• Educational institutions
• Consultants
• Redevelopment authorities
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See http://www.iedconline.org/web-pages/inside-iedc/iedc-at-a-glance/

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Economic development in Delaware
Division of Small Business
– Generally, businesses with <100 employees
– Strategic Fund and grant administration
Delaware Prosperity Partnership
– Larger businesses and scalable businesses
Attraction, retention and growth, innovation and entrepreneurship, and talent
– Overall marketing of Delaware
Chambers, county/municipal governments, main street associations, community
development organizations, and working groups
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What kinds of things do economic developers do?
Place-focused policies
– Business attraction, retention, expansion
– Regional innovation and “cluster” initiatives
– Building a strong “sense of place”
People-focused policies
– Education and training
– Income support
– Infrastructure to promote mobility and connectivity
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WHY ECONOMIC DEVELOPMENT?

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Source: consultantconnect.org

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Economic Development is Local + Personal
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Witness to Global
Forces Playing Out
Locally, Over Time
(As we all are)

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Economic Development Is a Tool to Address Real Material Needs
Our Choice:
Play Gotcha
Politics, or
Get Serious
About
Grievances?
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Inequality

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What was your local economy like growing up?
What is it like today?
What are the big economic trends and issues
affecting…
businesses?
households?
places?
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Unless otherwise noted, figures from:
Lee, T. B. (2016, 2016-10-10). 27 charts that will change how you think about the American economy. Retrieved
from http://www.vox.com/new-money/2016/10/10/12933426/27-charts-changing-economy

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Inflation

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Some big picture economic questions
Remote work good or bad?
For regions? Towns?
Is automation good or bad
for Households? Regions?
Countries? The World?
– When will the robots
take over?
Is trade good or bad?
For regions? Towns?

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Remote Work
“one pandemic silver lining has been under-discussed: the
employment rate for people with disabilities has far surpassed
its pre-pandemic level and is now the highest it has been since at
least the Great Recession.” (Ozimek, 2022)
Since 2020, about
5 million have
already moved
because of
remote work
(Ozimek, 2022)

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Trade – RENEWED FOCUS
Benefits of trade are globalized +
Pains of trade are localized

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What’s happening?
• “The CHIPS and Science Act offers funding for place-based policies
unparalleled in U.S. history”
– $10 billion that would cover five years of costs to help create 20
“Regional Technology Hubs,” which would seek to broaden U.S.
technology centers beyond the current dominant regions, such
as Silicon Valley, Seattle, Boston and San Diego.
– $1 billion for five years of costs of a pilot version of the
Recompete Act, which will assist 10 distressed communities
with significantly below average employment-to-population
ratios.

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What’s happening?
“Industrial policy has
long centered on areas
like manufacturing,
supply chains and the
tech sector. But in a new
proposal, one expert
suggests broadening the
focus to create more
good jobs in health care,
retail and other service
industries.”

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Growth vs. Prosperity
• Income Change
• Population Change
• New Businesses
• Tax Revenue
• Poverty
• Unemployment rate
• HS completion
• Problem housing
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Quality of life/happiness

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Questions
• Where are the
prosperous counties in
the US?
• Where are the growing
counties?
• Where are the
“distressed” counties in
the US?
• Where are the declining
counties?

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Is there a role for government + community actors?
Do you care about regional
differences in the economy?
– Yes…
– No…
Why should “government” or
“community” do anything about it?
Why should “government” or
“community” stay out of it?

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FRAMING ECONOMIC DEVELOPMENT
ACTION

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The Basic Ingredients of Economic Growth
(+ Development)
• Growth a function of capital and resource availability
• Growth a function of knowledge (productivity) &
technological innovation
• Growth mediated by institutions
– Culture and rules of the game

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An overview of three perspectives
on growth and development
• Frontier economics
• Build the base
• Institutions, people, networks & innovation

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Frontier economics
Contentions about growth +
development
• Places first grow through the
extraction and exporting of
“staple commodities”
• Capital investment
overwhelmingly devoted to more
efficient extraction and export
• Development progresses as local
incomes increase, spawning local
serving industry and nascent
entrepreneurs

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In Context: Big Box vs. General Store

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Illustrating the “staple trap”

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Lessons for practice
• Infrastructure, trade, and
natural resources matter
• Complacent regions can
end up in “staple traps”
• Industries are important,
but company
characteristics make a big
difference

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Questions to answer for your community
Why were you founded where you are?
What role does this location and accessibility play now?
How specialized in one or a few industries is your economy?
How large are companies in your region?
Who owns companies in your region?

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Build the base (and
the rest will follow)
Contentions about growth +
development
Industries that serve export markets
are the economic base
Expansion of the economic base
drives incomes higher
Higher incomes create demand for
local services
Incomes from service employment &
entrepreneurship increase regional
demand
Virtuous cycle continues as incomes
multiply through economy

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Lessons for practice
• Certain key industries tend to drive economies
• Growth occurs through expanding and
developing the base
• Capturing and circulating earnings in the
economy is key

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Questions to answer for your region
How does job growth
multiply through your
region?
– Can imports be
substituted?
– Can leaks be
plugged?

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Institutions, people,
networks + innovation Contentions about growth +
development
The real economic base of a place is:
– Workforce (talent)
– Culture and institutions that
set ground rules and provide
resources for development
– Ability to innovate and
recombine ideas and take
these to market
Social capital and networks among
institutions, firms, and individuals
make places resilient
– Quality of life is key

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Main Street America Approach
https://www.mainstreet.org/mainstreetamerica/theapproach

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The Rise of Innovation Districts
https://www.brookings.edu/articles/rise-of-innovation-
districts

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Workforce
intermediaries can play
a key role in developing
skill + capacity in
workers and
communities
Viewing skill
development as a
shared public-private
opportunity

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Lessons for practice
• Economic development requires “soft” investments
• Productive relationships among companies,
governments, community organizations, and higher
education can enable homegrown economic
development
• Dominant firms can set expectations and lead the way

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Questions to answer for your region
How often do you communicate
with local firms?
How and how often do local firms
communicate with each other?
How do you relate to higher
education institutions?
How livable is your community?

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WHAT DO I BELIEVE ABOUT ECONOMIC
DEVELOPMENT?

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Revisiting the “staple trap”

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Regions are all a little captured by what made them
successful…
– Now, recently, or some time long ago
History of the most captured places suggests…
– Conscious investment is necessary during good times
– Otherwise, you could be trapped
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Regions Need to Carefully Craft Escape Plans

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Community Investment Opportunities
• Remote work
• Reshoring (localizing) supply chains
• The Future of Retail, Food Service, Hospitality and
Tourism
• Data-driven economies – Toward Automation +
Tracing

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What does your community’s investment
portfolio look like?
• In the past?
• Now?
• In the future?
What roles can community developers play?

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THANK YOU!

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Troy Mix
Associate Director, Institute for Public Administration
Biden School of Public Policy & Administration
mix@udel.edu
www.ipa.udel.edu