Rethinking Federal Policy for Regional Economic Development By Mark Drabenstott

Question

Rethinking Federal Policy for Regional Economic Development

By Mark Drabenstott

Synopsis and Critique by Jocelyn Rodriguez

Synopsis:

This article focuses on the federal government's interpretation and implementation of economic development. According to the author, the loose interpretation of the meaning of economic development creates a sense of ambiguity and makes gauging the effectiveness of government programs a daunting task. Furthermore, where economic development was initially aimed at reinforcing infrastructure, the current economic environment is largely influenced by globalization. In addition, the manner in which the federal government approaches economic development assumes that all regions develop at similar paces and in similar fashions. We must then ask ourselves how effective these programs are if they are being packaged as one size fits all.

The article details the three distinct eras of economic development. The first consisted of luring industrial businesses to areas to grow local economies. The second era came when businesses changed gears and began focusing on cutting costs, while the third era focused on finding sources of competitive advantages. Modern views are looking towards the competitive advantages of specific regions to create economic development. In the past, the focus has been on recruiting talent to specific regions, however, with the increase in globalization, this is no longer feasible. Drabenstott suggests that the focus must be placed on encouraging entrepreneurship in an effort to create regional competitiveness. While the reinforcement of infrastructure should not be scrapped completely, there is a need to have it better aligned with regional developments.

In order to move towards an economy that creates entrepreneurs, it will be critical for the federal government to do the following: create financial markets for entrepreneurial businesses, invest in research and development, invest in a talented workforce, open new markets for entrepreneurial businesses and establish a solid infrastructure for entrepreneurs. Efforts to initiate these changes must start from the ground up which will need to include colleges and universities focus energy on promoting an entrepreneurial student body.

It is critical that while these changes are made, the implementation of metrics to gauge effectiveness be perfected as these changes will undoubtedly require trial and error.

Discussion Questions:

In regards to economic development, what are some things that you feel the federal government focuses on that can be pushed to the backburner?

How else could you use the information presented in the article?

How can we gauge the effectiveness of these changes?

Do you feel that incorporating entrepreneurship in colleges and universities contributes to the number of entrepreneurs in a region?

Are there any other differences in what constitutes economic development now that differs from how that was perceived in the past?

Explanation / Answer

Introduction:-

Economic development is a very broad word generally, used to denote and compare over a period of time the activities that happen within a country state or city.

From the pre historic times, economic development is looked up as a measure of the level of employment, per capita income, sex ratio, and other factors such as healthcare, lifestyle etc.

This terminology of economic development helps governments in deciding and planning on budgets, allocating resources to those areas that are lacking, and broadly, being able to compare results with previous numbers.

The basic problem of assesing economic development using these models, is that it no longer focuses on distribution of income, and factors such as social justice, stress in the society, and others to name a few. It only looks at numbers and numbers can be manipulated easily and shown in a way that soothes the audience.

Further, what is development for a particular area might not be development for another. Example- A factory in an area favourable is development, whereas on the other side if the same was to be opened in an ecologically sensitive area, the impact of this should be looked at from a holistic point of view, ie. the destruction of the environment should also be considered.

What needs to be pushed to the backburner:-

The federal government has been following a trend of measuring the economic development by means such as GDP, National Income, Industrial Growth etc. These give an idea in terms of numbers but how these numbers relate on ground are tough to assess. More so, the income disparity among poor and the rich are no where highlighted nor is the impact on environment and other factors such as social justice considered while calculating these numbers.

In my opinion, the trend of calculating these values and strictly forming this as the basis of economic development is something that needs to change in the society at large. More than the numbers what matters is the ground reality, not all development strategies can be implemented for the general public but need to be specific at times also.

How else could you use information in this article:-

The article here tends to highlight and emphasise particularly on the importance of entrepreneurship. Entrepreneurship is a very important element of economic growth, which is often neglected by governments.

New jobs can come into place with the help of this exercise. Economic growth if measured only on industrial growth, is meaningless since industries have jobs but their pace of creating jobs is thought to be much lesser than that of countries in which entrepreneurship is nurtured.

Any big company formed because of the idea, which lead to entreprenuership and finally in jobs of volumes no one could imagine. Example-Apple a global giant was only an idea in the minds of Steve Jobs and Steve Wozniac. Once nurtured it became capable enough of employing people in huge numbers.

While looking at stats it is also important to look at the new jobs created in the market as a whole.

Q) Do you feel that incorporating entrepreneurship in colleges and universities contributes to the number of entrepreneurs in a region?

Answer-

Entrepreneurship is not easy to define, it is inculcated with a desire to solve a problem which becomes a powerful business model, that people relate to and are willing to buy. This inculcation if part of the syllabus will highly help in promoting the same and imparting problem solving skills to the student. Also it would act as a platform where potential future businessman would know how to solve problems or atleast how to tackle with them using what methods, this further would help in creating jobs and employment which would lead to economic growth as highlighted above.

Are there any other differences in what constitutes economic development now that differs from how that was perceived in the past?

In the past, economic development was only viewed in numbers, no stress was given to environmental impacts, job creation, social justice, etc. As highlighted in the introduction also, this now has begun to change. The basic concepts of economic development in the more advanced economies is not limited now to the imperial standards but rather would also focus on social justice and other variables as highlighted

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