Finally,states need to foster cooperation between local jurisdictions to ensure mutualgains from growth, not play a zero-sum game of wasting development dollarsluring businesses to move a few miles. Good Jobs First in a series of reports, most recently on Minnesota and Michigan, hashighlighted how funds are wasted as development dollars from wealthier suburbsare directed towards raiding jobs from urban centers rather than creating newjobs.
Inan increasingly global economy, states struggle to decide which policieswill encourage the growth of high-value local jobs and high-technologyindustries that can compete on the international playing field. Too often,state economic policy reduces to desperate biddingby states to offer tax subsidies to businesses that will relocate to theirstate, a failing strategy that usually accomplishes little other than drainingstate budgets.
Investingin 21st century broadband infrastructure is a far better use ofpublic funds. States cancapitalize on infrastructure build-out through local investments that nurtureexisting firms and local industry startups that, with the right support, canbecome the anchors of long-term economic growth. Technology transfers from localuniversities and community investments can tie together industrial"clusters" of firms that, in turn, can encourage the kind oflong-term, high-value jobs needed in our communities to compete in the globaleconomy. Further, by directing some of those investments to the“domestic emerging markets” of low-income communities and better coordinatingoverall economic development, states can assure that technology investmentsdeliver economic prosperity for everyone.
Core Policies for LocalInvestments for Technology-Based Growth
Florida Governor Charlie Crist recently signed an economic stimulus plan for the state that redirects $1.95 billion of the state's pension fund
into direct investments in Florida's economy. The amount is limited to
1.5 percent of the state's pension money, but even that limited
percentage can add up to massive investments in jobs for the state's
In creating the program,
legislators and the Governor pointed to the success of similar programs
in other states, particularly the California Public Employees' Retirement System (CalPERS), the nation's largest pension fund. A recent study
found the California fund's in-state investments had fed an estimated
$15.1 billion into in-state economic activity in 2006 and created
124,000 jobs, more jobs than the construction or motion picture
As the country enters into a recession and suffers increasing job
losses, the Great Lakes Region is facing a particularly acute crisis.
Literally millions of decent-paying manufacturing jobs have disappeared
from the region in recent years. How regional political leaders are
responding to that crisis provides lessons for state policymakers
across the country.