Planning economic development

This course will examine factors in planning economic development. Through this course you will hopefully leave with a better sense of how to plan for quality economic development.

There are a multitude of different perspectives on economic development that fall into the realms of economic, political and philosophical.

Questions that will be explored are:

  • How can economic development best be stimulated?
  • What sort of business regulations are most conducive to quality economic development?
  • How can regulations be developed to maximize the benefit for both the people of the state and the businesses and their customers?

What is economic development?

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Definition Economic development has several definitions from local to global perspectives. Professor of Economics and Public Policy Alan Deardorff at the University of Michigan as part of his International Economics Glossary calls it: "Sustained increase in the economic standard of living of a country's population, normally accomplished by increasing its stocks of physical and human capital and improving its technology."[1] At the local level, the term is brought to a more reachable level. For example the UrbanPlan curriculum states: "Economic development—A term generally applied to the expansion of a community’s property and sales tax base or the expansion of the number of jobs through office, retail, and industrial development."[2] An interesting Cornell article expands: "Economic development is typically measured in terms of jobs and income, but it also includes improvements in human development, education, health, choice, and environmental sustainability. Business and economic developers in the US are increasingly recognizing the importance of quality of life, which includes, environmental, and recreational amenities, as well as social infrastructure such as child care, in attracting and retaining businesses in a community."[3] In each of these definitions, the focus is on growth of the physical and social sphere of life. As well there is an inherent goal, that such growth achieves a greater "standard of living" or "quality of life." Growth and improvement, of course, not simply endless building such as that of residential suburbia. However the field does presume one common fact, that what is there is not providing what that community needs.

In government structure Economic development (ED) is seen both as a policy and a profession. In the United States, most local governments have an economic development authority that oversees and guides enterprise in states and cities. Many states have multiple layers of such groups. For example, a neighborhood might have it's own non-profit to help small businesses establish storefronts. The municipality's economic development department would help major corporations locate into city limits. Most cities have metropolitan regions, and such regional authorities can promote entire areas of a state for new companies. The state's workforce and employment department would then overlap all of these, tracking job growth and ensuring Federal funds may be available for job programs and assistance. ED many times is an expected part of government function because cities and regions are constantly competing for jobs which no longer need a specific location.

As government policy As policy, ED is frequently noted in the news as a function of a country's government to improve the welfare of its citizens by providing and literally building opportunities. The skyscrapers and dams being fervorently built in China's coastal cities and rural west have become a symbol of ED. The term started for American cities in the advent of suburbia in the 1970s but had not exactly entered American politics until the economic boon of the 1990s. ED has traditionally been applied to major projects such as a new industrial zone or enclosed shopping mall as well as waterworks projects and freeway expansion. However suburbia by the 1990s began to realize that the capitalist micro-economies of downtowns were not going to remake themselves and the term gained full footing to ensure stability in new cities by carefully planning and plotting the location of potential retail, services, and office. ED has also become familiar with medical and hospitality industries, seeing hospital campuses and hotels as valuable as an office tower. The main goal with ED as government policy is that jobs must grow in the end, much like how private companies ultimately wish to gain profits from new investment.

As a profession As a profession, ED Directors and Business Specialists work with business owners and much like courting deals in the private sector, will try to provide opportunities to entrepreneurs. These may include qualifying special new business loans, offering tax breaks on a piece of land, or ensuring planning officials can compromise to approve a project. While ED personnel are generally "on the ground," they also do extensive research and quantitative analysis as to potential sites which may accommodate future employers. Regularly they perform many urban planning and community development functions such as identifying properly zoned areas for commercial or industrial and the accompanying codes and variances that could suit a business model. With these goals, ED staff may also influence planning decisions and encourage the establishment of Enterprise Tax Zones which specifically encourage businesses to locate in a particular geographic area.

The city and the hinterland

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The basis for urban economies is in understanding the relationship of cities and the hinterland. The hinterland has been used since the 20th century by geographers to describe rural land, the "empty" and "wild" space between cities. Eugene van Cleef would better define it in "Hinterland and Umland," tracing its Germanic routes as the land extending from the coast.[4] The best equivalent is "back country." Though with a slight negative connotation, the hinterland has become an appropriate term to describe land areas that do not necessarily have a city or urbanized function but are not necessarily rural lands. For example much of the central to western United States is unincorporated or not in use at all due to natural features. As well hinterland encompasses all natural lands even those in protected status.

The need to understand the relationship between the city (meaning both urbanized and metropolitan areas) and the hinterland, is helpful to understanding the cycle of urban economies and flow of investment and assets. ((more text to be added))

Urban economies: cycle flow and assets

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Metropolitan spheres of influence

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Planning for enterprise

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Types of businesses

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Infrastructure

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Urban conditions

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Regulations

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Zoning code

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Techniques

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Private sector

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Retail

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Commercial

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Industrial

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Non-profit

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Medical facilities

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Arts and cultural institutions

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Advocacy groups

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Community groups

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Neighborhood investment

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  1. International Economics Glossary
  2. [1]
  3. Cornell
  4. Eugene van Cleef. Hinterland and Umland. Geographical Review, Vol. 31, No. 2 (Apr., 1941), pp. 308-311 (article consists of 4 pages). Published by: American Geographical Society. http://www.jstor.org/pss/210211.