Book Review: The Pursuit of Economic Development: Growing Good Jobs in U.S. Cities and States

Abstract

Economic development (ED) is about fostering the long-term vitality of regions, as quantified by a variety of indicators. In the pursuit of this objective, job creation and growth, business retention and attraction, and regional income growth are outcomes from good economic development strategy. While there is agreement about appropriate measures of economic development, there is somewhat less agreement about the best means to achieve these outcomes. Accordingly, a variety of strategies have been implemented to encourage development, with varied degrees of success. Often, the selection of strategies reflects the development rhetoric of a certain time period.

Over the past century, practitioners have implemented a variety of development strategies from tax-incentive-based smokestack chasing (Cobb, 1982), to Porter’s cluster concept (Porter, 2000), to more recent ideas about the creative class (Florida, 2003). Over time, these ideas have become engrained in economic development practice, even after they fail to deliver results or produce in unintended consequences. For example, we now see that the pursuit of the creative class has rendered many urban centers in a state of gentrification-induced crisis (Florida, 2017). While political interests only complicate economic development practice (Rubin, 1988), the apparent blanket application of economic development strategies with somewhat little regard for place-based initiatives raises questions about a fundamental mismatch between economic development theory and practice.

In his recent book, The Pursuit of Economic Development: Growing Good Jobs in U.S. Cities and States, Todd Gabe, who is a professor of economics at the University of Maine, attempts to provide some clarity into the politics-infused confusion that surrounds the practice of economic development. At its core, the book is a thought-provoking reflection about theories of economic development and an evaluation of data that support or refute these ideas. The book uses job creation as the metric for economic development as it evaluates various strategies to create good paying jobs. To this end, the nine-chapter book evaluates seven common strategies for creating these jobs: lowering the cost of doing business, industry clusters, human capital, high-technology and knowledge-oriented business targeting strategies, amenities, and the “newness” of places as indicated by migrants, ideas, and housing.

To contextualize this discussion, chapter 1 begins with a general discussion of economic development and the reason people believe in jobs-focused economic development activities. In this chapter, the author discusses relevant indicators for economic development, as well as some of the theories (neoclassical growth model, growth models with increasing returns to scale, and the creative class) behind economic development efforts.

From chapter 2 onward, the book explores a variety of economic development strategies for creating good paying jobs. Chapter 2 evaluates the strategy of creating a good business climate by lowering costs to businesses, with a focus on taxes, energy prices, and labor costs. Chapter 3 explores the link between the industry mix of places and economic development. In this discussion, the ideas of a good manufacturing base and industry clusters are evaluated. Chapters 4 and 5 discuss human capital and small-business-oriented economic development strategies, respectively. Chapter 6 examines the high-technology-oriented development idea, while chapter 7 explores the ever-popular amenities-based approach to development. This evaluation encompasses natural amenities, crime (or lack thereof), and different business types (arts and recreation, restaurants and bars, books and music stores). Chapter 8 evaluates the impact of the “newness” of places on development where newness is characterized by patents, new people, and new residential housing.

The ninth and final chapter summarizes the findings of prior chapters. This summary presents mixed evidence for the development strategies evaluated, as well as mixed evidence at different levels of geography (state vs. metropolitan area). In this summary, metropolitan areas and states are clustered into seven groups to capture the personality of places: low cost, primary metal products, creative economy, large businesses, high-tech businesses, general amenities, and residential construction. These personality profiles help capture the bundle of place characteristics that explain the divergence in regional development trajectories over time.

The book closes with four propositions for development: (1) the factors that drive economic development vary between states, metropolitan areas, and metropolitan areas of different sizes; (2) economic growth and economic development are distinct goals; (3) growing regions are separating themselves from other regions; and (4) economic development is a hard goal to achieve. These propositions characterize the niche between theory and practice filled by this book. From this perspective, the book is the third component of a recommended reading triumvirate for parties interested in economic development. Aside from this piece, readers are pointed toward Understanding Local Economic Development by Emil Malizia and Edward Feser (1999) and Planning Local Economic Development: Theory and Practice by Nancey Green Leigh and Edward J. Blakely (2018). The Malizia and Feser book presents theories of economic development, while the Green Leigh and Blakely book links these theories to the practice of economic development. The Gabe book asks whether pursuing theories in the name of development makes sense. Overall, Gabe’s book is an excellent read and recommended for economic development enthusiasts.

Footnotes

Author Biography

Elizabeth A. Mack is an associate professor in the Department of Geography at Michigan State University, where she teaches courses in economic geography.

References

Cobb

J. C.

(1982). The selling of the South: The southern crusade for industrial development 1936-1990. Urbana: University of Illinois Press.

Florida

(2003). The rise of the creative class. New York, NY: Basic Books.

Florida

(2017). The new urban crisis: How our cities are increasing inequality, deepening segregation, and failing the middle class—And what we can do about it. New York, NY: Basic Books.

Green Leigh

Blakely

E. J

. (2018). Planning local economic development: Theory and practice (6th ed.). Thousand Oaks, CA: Sage.

Malizia

E. E.

Feser

E. J.

(1999). Understanding local economic development. New Brunswick, NJ: Rutgers, Center for Urban Policy Research.

Porter

M. E.

(2000). Location, competition, and economic development: Local clusters in a global economy. Economic Development Quarterly, 14, 15-34.

Rubin

H. J.

(1988). Shoot anything that flies; claim anything that falls: Conversations with economic development practitioners. Economic Development Quarterly, 2, 236-251.