Academic journal article Indian Journal of Economics and Business

Challenges to Sustainable Economic Development

Academic journal article Indian Journal of Economics and Business

Challenges to Sustainable Economic Development

Article excerpt

Abstract

The purpose of this paper is to identify innovative approaches for regional economic development that will lead to sustainable economic development. The challenges to sustainable economic development are presented for the Northwest Indiana region and innovative approaches are addressed.

Keywords: sustainable economic development, regional economic modeling, econometric and input-output models, innovation, economic growth

JEL Index: O16, O31, O40, R11, R15,

1. INTRODUCTION

Traditional economic development strategies focusing on attraction, expansion and retention in discrete communities of Northwest Indiana with clear geopolitical boundaries will no longer work. The conventional approach of hiring a consulting agency to develop a new economic development strategy to help identify the opportunities and develop a roadmap for a community may be a necessary, but not a sufficient condition for sustainable economic development. Very rarely the traditional approaches offered through consulting agencies bring new ideas because most often the funding or the process used to secure the consulting services had already defined the approaches that are acceptable and desired.

When the community leaders in Northwest Indiana partner with surrounding jurisdictions and institutions to develop comprehensive economic development strategies they truly leverage a regional advantage and secure a competitive position in the national and international economies. The overall challenge that Northwest Indiana faces is to encourage and appreciate innovative approaches in the region. A critical factor for competitive advantage is to be innovative in the economic development strategies. Therefore, we should and must innovatively engage in rethinking regional economic development strategies for Northwest Indiana.

The purpose of my paper is to identify alternative innovative approaches for regional economic development that will eventually lead to sustainable economic development policies. I will present the challenges facing Northwest Indiana and suggest innovative approaches to them. The first part of my paper will highlight the economic development background of Northwest Indiana. The second part will identify the challenging issues facing the region and describe the innovative approaches needed to promote regional economic development. The final part will suggest a strategy to prioritize these challenges so that regional and local economic development organizations of Northwest Indiana can build a roadmap to implement sustainable economic development policies.

2. ECONOMIC DEVELOPMENT BACKGROUND OF NORTHWEST INDIANA

Northwest Indiana is a three-county region that includes Lake, Porter, and La Porte counties. Based on 2009 estimates by the Bureau of Census, the population of Northwest Indiana is approximately 770,000, where two-third of the population lives in Lake County. Since 2000, Porter County grew the fastest with an 11.4 per cent change in population compared to a 6.9 per cent change in La Porte and only a 2 per cent change in Lake County.

The current unemployment rate in Northwest Indiana is higher than Indiana and United States with almost 13 per cent of the population below the poverty level. Only 18 per cent of the population in the region has a bachelor's degree or higher compared to 28 per cent in the United States.

The median household income of Northwest Indiana is $53,035, higher than Indiana and United States, where Porter County has the highest median household income of $62,676 and highest. The homeownership rate of Porter County is also the highest in the region. Lake County commands over 70 per cent of the total federal spending for Northwest Indiana while 2 per cent of the total federal spending for the state comes to the three counties of Northwest Indiana.

The top three industrial sectors in Northwest Indiana in terms of percentage of total employment are manufacturing, health and social services, and retail trade. …

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