America’s exceptionalism is shining through in companies, regions and states across the U.S. as many are not only surviving but thriving in today’s global economy. This success is no accident. Companies and regional and state leaders’ foster wealth and job creation by implementing aggressive economic development strategies. Regional and state economic development strategies include basic Building Block or more advanced strategies known as the Five Drivers of Economic Development.
Building Block economic development strategies prepare sites for development through zoning, annexation and eminent domain. Infrastructure development, workforce, tax policy and quality of life issues are also part of most regional and state economic development strategies. These fundamental economic development strategies are the start not the finish of the race.
However, regions and states not just surviving but thriving do so by targeting profitable, high-wage industry clusters. It is not magic to determine which industries are winning. Manufacturing remains a high wage, profitable industry but unfortunately has lost a substantial share of U.S. jobs. High-tech and service industry are leading an economic renaissance in many regions of the country. In addition, companies and regions with substantial Foreign Direct Investment and exporting activity are big winners in the global economy. Advanced manufacturing and services, energy, technology and globalism constitute the Five Drivers of successful economies. The winners through this Five Drivers strategy are clear:
- Alabama has half the population of Ohio but now operates the same number of auto assembly plants that produce billions in economic impact that helped land a $660M Air Bus facility;
- Columbus and Cincinnati stand out as successful advanced service based economy through strong growth in financial services, corporate headquarters and other white collar jobs attracted to the large enrollment of college and university students;
- Silicon Valley and the Research Triangle Park lead the world as major tech centers with regions such as Cleveland and others working to catch up;
- North Dakota, Ohio, Texas, Oregon and other states are leaders in the global energy revolution; and
- Tulsa, Oklahoma’s aviation cluster is producing big wins for the region through its success in exporting to global markets.
Deciding to go after high wage jobs is not controversial. The successful regions and states make the tough decision of determining what they do well and what industries are growing within that pool. Economic development industry cluster analysis is the starting point for determining where a region should focus its resource. State leaders can improve their economies by:
- Concentrating budget and policy priorities on the industries that pay the highest wages and are booming across the nation in the fields of energy, technology, advanced service and manufacturing and global firms; and
- Recognize the key role of important industries existing in a state such as aerospace in Ohio and health care in all fifty states.