Regional Development in the USA
During the 1990s the United States economy has turned itself around. In contrast to the 1980s und early 1990s, when fears of a loss of competetiveness were widespread, the U.S. has become the engine of growth for the global economy. Since 1996, the economy has strengthened and has experienced an unprecedented combination of strong growth, low unemployment and low inflation with high business and consumer confidence.
The economic recovery has been private-sector led.
Since 1991, the U.S. economy has generated nearly 20 million jobs, mainly in the private sector. Regions and sectors decimated by recession in the 1980s are now powerhouses of new knowledge-based economic activity. Concerned that private companies were losing price and quality competetiveness firms in all regions have shifted their strategies to improve efficiency, emphasize product innovation, and develop closer links with the market place.
High technology, its diffusion and application throughout the economy has led to the reinvention of the private sector.
A distinguishing feature of all postwar industrial economies has been the persistent shift in employment from manufacturing to services industries. This trend has accelerated during the 1990s. Services now predominate in most regions of the country, even in former manufacturing centers.
There has been a debate about the significance of the shift to service employment. However it is important to recognize that manufacturing has nevertheless held its own in contributing to GDP. Manufacturing has been able to sustain its contribution to the economy through sharp improvements in productivity – far outstripping the rest of the economy.
Concern over „deindustrialization“ reflecting a fear that services jobs are not as well-paid as manufacturing work has been proven to be misplaced. The service sector contains a wide range of jobs, from fast-food workers to high-prices engineers, scientists and lawyers. Since the 1990s the number of high paid jobs has outstripped the low end, and many of these jobs are directly related to the manufacturing sector.
The structure of the economy is best described as „knowledge-based“, rather than as a dichotomy of manufacturing versus services. Manufacturing and many of the services industries are interlinked by the production, distribution and marketing processes. Moreover, the application of items produced in the manufacturing sector (particularly high technology goods) transformed traditional products and led to the invention of new ones through the economy.
The key challenge for policymakers in this environment is to ensure that workers receive the training needed for skilled positions in a high-tech economy and to provide a sensible policy framework in which these industries can flourish.
Universities and other institutions of higher education play a key role in regional economic development. In addition to the traditional emphasis on education they can also promote innovation and technology transfer and provide special training für a skilled work force.
Most state governments began to focus on research and development as the basis for innovation and economic revival in the early 1980s. One of the results of this approach was the creation of „centers of excellence“ in state-supported universities who took into account the specific needs of local business and the potentials für new and emerging technologies.
In recent years state policies und programs for R&D changed, because policymakers wanted to see quick results. This explains a shift away from long-term support to academic institutions and a new focus on industry-driven R&D activities. The aim is to leverage the limited state funds with company financial support for projects targeting specific industrial needs.
In addition to these indirect effects a good research university can act as a magnet around which clusters of new technology-driven industry can develop. In Massachusetts, for example, several clusters had their beginnings in research done at MIT or Harvard.
U.S. growth would not have been so strong without the entrepreneurial spirit. America applauds individualism, ambition and success. In the U.S., business culture allows individuals to fail and start again. Entrepreneurs can find mentors and the public and private services needed to support their goals.
The size of venture capital in the U.S. is much higher than in most of the EU member states. The dynamics of clustering also facilitates venture capital generation and investment, providing a melting pot of venture capitalists, researchers, technology experts, business angels, local and regional policymakers, accountants, business schools and universities with a stake in the entrepreneurial process.
State governments can influence the pace of innovation and economic growth in a number of ways including:
• Business facilitation, through favorable regulatory environments, incentives für using enterprise zones, and reasonable tax structures
• Support für research and university activities related to technology transfer
• Training programs in new technology applications
• Improved transportation and communications infrastructures.
Most regions featured a clear economic development strategy, embedded in the realities of the local political process, including coalitions among government, business and research communities. Regional policymakers also helped to catalyse and coordinate activities, often through public-private partnerships, that promote economic growth based on an agreed plan.
State governors, mayors and other local leaders have often provided the personal leadership and vision needed to rebuild state economies. For example, in the midst of a severe economic downturn, former Colorado Governor Roy Romer declared his state „Open For Business“. This set the tone for an economic turnaround based on the promotion of small businesses.