Globalization's Impact on State and Local Policy: The Rise of Regional Cluster-Based Economic Development Strategies (1)
Felbinger, Claire L., Robey, James E., Policy Studies Review
The business of business, the business of politics, and, therefore, the business of economic development is global. This fact is not going to change. Mander (1996) has argued that globalization involves the most fundamental redesign of political and economic arrangements since the Industrial Revolution. This restructuring will almost inevitably continue. It seems reasonable to conclude that in order to be successful in a global economy, state and local policy must also be redesigned to operate in the emerging new environment. The purpose of this article is to propose proactive policies which allow state and local governments to participate in the global economy, offering the opportunities and venues for effective development. The first section develops the argument that the changing economic conditions associated with globalization call for a new approach to state-local economic development policy. It outlines three assumptions which, the authors think, are critical to drive successful state and local economic development policy in a global environment. The major part of the analysis describes this new strategy of "regional cluster-based economic development," drawing upon a case study of Cleveland's economic revitalization.
ASSUMPTIONS OF THE NEW APPROACH
The first assumption is, perhaps, the most difficult for state and local officials to operationalize (although some can deal with it conceptually): for economic development, cities and states are no longer meaningful units of analysis. According to Wilson (1997:11), "Spatial barriers [have] become artifacts of the past, simple administrative units that enclose globally tinged inhabitants." While we would not go so far as to say they are not relevant in any way, there are three aspects of this situation that governmental officials need to understand. Most fundamentally, globalization has broken the linkage between business entities and place-based employees. Cities can be discarded by business enterprises when conditions are not favorable. Even when cities offer as much as they legally can in terms of tax abatements, infrastructure investments, or other amenities, businesses are free to relocate within the region, to another region, or to another country. Consequently, no single state or local governmental unit can possibly deal with global economic issues unilaterally. Global economic development strategies cannot be based on a simple smokestack chasing strategy. Instead, regional strategies are more appropriate than any focusing exclusively on central cities, suburbs or even states. Moreover, a single definition of what constitutes a "region" does not exist. In most cases, "state" as a region is too big and "city" as a region is too small. In Cleveland, an argument will be made that its economic development region is multi-county. In New York it can easily be multi-state.
The second assumption is that regions cannot depend on developing only specific capacities, but rather general capacities which ensure a flexible workforce. Since we do not know which specific capacities will be required in the future, the best strategy is to prepare individuals who can transfer and translate skills into diverse industries as the need emerges. That is, human capital development must assume a central role in economic development strategies (Clarke and Gaile, 1998). Thus, institutions currently providing training programs should not keep training people in non-needed skills, even if they are providing excellent training. Although this seems logical, we know of one technical college in the Midwest which trained highly skilled welders to supply the welding and fabrication needs of heavy industry -- and kept providing this excellent training after those manufacturing plants closed or relocated. Although globalization has de-linked business from place, people may not be so easily de-linked from their personal "place" for a variety of reasons.
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Globalization's Impact on State and Local Policy: The Rise of Regional Cluster-Based Economic Development Strategies (1). Contributors: Felbinger, Claire L. - Author, Robey, James E. - Author. Journal title: Policy Studies Review. Volume: 18. Issue: 3 Publication date: Autumn 2001. Page number: 63+. © 2000 Policy Studies Organization. COPYRIGHT 2001 Gale Group.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.