INSIDE WASHINGTON/Report looks at success in the new economy
City and county leaders [must] take regional governance seriously.
For cities and counties to thrive in the 21st Century, local officials need to embrace the “new economy” and its principles, while shedding conventional economic indicators that could hinder their communities’ growth. That is the conclusion of a report released by the Progressive Policy Institute, the Washington, D.C.-based think-tank that is part of the Democratic Leadership Council.
According to the report, the new economy is the result of the information technology boom that has swept the nation over the last 10 years, creating in its wake new employment corridors in areas as diverse as Austin, Texas; Raleigh-Durham, N.C.; and San Francisco. The report, “The Metropolitan New Economy Index,” evaluates the top 50 metropolitan areas in the country and rates their transformation to the new economy, providing city and county officials with a snapshot of how some areas are evolving, while others are not.
“It is important to realize that a new economy has emerged in the last decade, one that is more information-based, more global and more dynamic,” says Robert Atkinson, the report’s author, along with Paul Gottlieb, a professor at Case Western Reserve University in Cleveland. “Beyond the rise and fall of the stock market or the success of any dot-com, this new economy is here to stay, and our metropolitan areas need to understand and adjust to [its] challenges.”
The report offers a seven-step approach that local officials can follow to help their communities prosper in the new economy. The authors recommend that city and county leaders know their region’s economic function in the global economy; create a skilled workforce; invest in infrastructure; create a better quality of life; foster an innovative business climate; reinvent and “digitalize” government; and take regional governance seriously. They also suggest that cities and counties structure their economies so they become both adaptive and innovative to keep up with the constantly evolving technological revolution.
The 50-page report notes that “as markets fragment, technology accelerates, and competition comes from unexpected places, learning, creativity and adaptation have become the principal sources of competitive advantage in many industries.” Consequently, fostering innovation and adaptation — in infrastructure, public and private institutions and individuals — must be the goal for metropolitan areas.
As city and county leaders emphasize new economy principles, they must set aside the “old economy” ideal of working to attract a broad range of new industries to their areas. Instead, local leaders should focus on attracting select new industries that can help raise their residents’ average income. Such a strategy would necessarily be joined with an aggressive education program to provide better paying jobs so as not to overlook the employment needs of lower-income residents.
“The new goal for economic development, particularly in crowded and expensive metro areas, should be to raise the average per capita incomes through higher-wage jobs, while working to reduce poverty and expand opportunity for economically disadvantaged residents, all the while boosting the regions’ quality of life,” the authors say.
Of the country’s 50 largest metropolitan areas, San Francisco has been most successful in adapting to the new economy, according to the report. Other cities in the top five include Austin; Seattle; Raleigh-Durham; and San Diego. The five least successful areas are Greensboro, N.C.; Louisville, Ky.; Memphis, Tenn.; Jacksonville, Fla.; San Antonio; and Grand Rapids, Mich.
The full report can be viewed at www.ppionline.org or obtained by calling (202)547-0001.
The author is Washington correspondent for American City & County.