Brookings Institution Seeks to Redefine Economic Development in Age of Economic Weakness

The report, issued by the Brookings Institution, called for improving infrastructure and business climate, nurturing entrepreneurs, developing industry and skill clusters, and locally supporting globally-competitive firms.

In “Remaking Economic Development,” issued Monday, the think tank cites wage stagnation and widening economic disparity in calling for reforms in philosophy and practice.

“There is a shift afoot in the way CEOs, business leaders and their allies at universities look at economic development, and its potential for stimulating economic growth,” said Amy Liu, vice president and director of the institute’s Metropolitan Policy Program, and the report’s author, in an interview. Her report encouraged governmental officials and economic-development leaders to refocus on the purpose of economic development,” encouraging policies that “get both the markets and civics right.”

The institute, which supports a network of economic development initiatives across the country, called on statewide, regional and local leaders to reexamine and reset organizational goals. Questioning the historic track record of incentive-based corporate recruitment—which along with financing public works programs constitutes the gist of most economic development efforts— the institute called for nurturing grass-roots growth and supporting entrepreneurs, and more investment in infrastructure and innovation.

The insitute also called for expanded support for exporting and increased investment in people and skills.

The report set out five key principles:
1. Goal Setting. Expand the scope and metrics of economic development to reflect a more foundational and holistic understanding of how to expand the economy and opportunity.
2. Grow from within. Prioritize established and emerging firms and industries; invest in the ecosystems of innovation, trade, talent, infrastructure and governance.
3. Boost trade. Facilitate export growth and trade with other markets in the U.S. and abroad in ways that deepen regional industry specializations.
4. Invest in people. Prioritize skill development for productivity gains, salary growth and increased job satisfaction.
5. Connect people and places. Catalyze economic place making and work at multiple geographic levels to connect local communities to regional jobs, housing and opportunity.

“Leaders in cities and metro areas have an opportunity to remake economic development,” Liu wrote. They can “adopt a broader vision … that can deliver continuous growth, prosperity and inclusion in cities and metro areas.”

She added: “While some … leaders and organizations are embracing this version of economic development, it needs to be further scaled up.”