Professional Documents
Culture Documents
This Policy Brief advocates strengthening state eco- economic development practice encompasses three
nomic development policies and resources to focus kinds of activities: business recruitment, business
more on raising the education and skill levels of the expansion, and business formation. To carry out
current workforce. specifically, the brief these activities, states rely upon sophisticated tools
summarizes existing state practices, presents the wielded by a mix of public institutions. These
case for a skills agenda, identifies four areas of include tax subsidies arranged by development
opportunity, and offers policy recommendations. offices, customized training provided by two-year
colleges, and technical assistance often offered
through university extension services.9 in addition,
states typically devote special attention to recruit-
sTaTe economic DeveloPmenT overvieW ing businesses through subsidies designed to
reduce such business costs as taxes, land acquisi-
economic development is “the intersection of public tion, and site preparation.
policy and commerce for creating jobs, prosperity,
business, and wealth.”5 all levels of government recruitment efforts recently have ballooned in cost
have engaged in such efforts for many years, but as states vie for a limited number of “blockbuster”
modern state practice traces its roots to the great deals. in 2007, for example, both louisiana and
Depression, specifically mississippi’s 1936 launch alabama offered Thyssenkrupp ag packages
of the “Balance agriculture with industry” worth at least $1 billion to open a steel plant.10
program. although governments previously had unfortunately, it is difficult to gauge how much is
assisted individual firms, the magnolia state’s sys- spent on economic development, as many outlays
tem of preferential assistance designed to reduce occur outside of normal budget channels and take
business costs established a coordinated framework the form of multi-year tax expenditures. one analy-
large expenditures consume resources that This idea, reflected in the slogan “workforce devel-
could fund other more productive opment is economic development,” has garnered
investments. support, yet actions have not always matched the
many jobs resulting from economic rhetoric. in part, this is because state economic
development efforts are poor in quality. development systems often have few formal ties to
education and training systems. economic develop-
Few benefits accrue to low-skill working ers often collaborate with the customized training
families and distressed communities.13 programs operated by two-year colleges. however,
they have far fewer direct dealings with academic,
vocational, and basic literacy programs – the very
The case For a skills agenDa programs designed to educate, train, and retrain
adult workers, especially those with modest skills.
criticisms of state economic development systems Without deeper integration of economic
have grown pointed in recent years due to escalat- development systems and education and skill
ing costs and a nagging awareness that traditional development systems, states will not meet the
practices are ill-suited to an era of increasing global workforce needs of business.
competition and weak domestic job growth. state
development officials historically have assumed advancing an education and skills development
that business location and expansion decisions are agenda capable of closing the skills gap is a task
driven solely by cost considerations and that that the WPFP’s state partners are well-equipped
growth depends upon a state’s willingness to offer a to perform. Partners possess a deep understanding
low-cost “business climate” and subsidize key firm of the needs of adults with modest skills and are
costs such as land acquisition and infrastructure familiar with how workforce education and training
24
Poole, see note 3 above.
25
evelyn ganzglass, “making education and skills
Development integral to economic Development,”
Presentation to The Working Poor Families Project
academy on state economic Development, atlanta, ga,
september 4-5, 2008.