Investment represents the most critical decision made by every region trying to grow its economy, but it also represents a very complex task. At this stage, it is helpful to take a step back and understand the role that economic development investment plays in stimulating the growth of a regional economy.
The regional strategy process outlined in Chapter 2 is a crucial prerequisite to the investment decision process. It identifies the strategic opportunities that ultimately define the investment alternatives. It creates the framework within which investment decisions can be reached. And by operating at the regional level, it potentially assembles a critical mass of investment funding. Today, it is still common to find economic development in rural America operating at the level of a single community or county. One of the major limitations of this approach is that it fails to achieve the investment scale necessary to fund many of the public goods required in today’s innovation-driven economy.
Successful investment for regional development involves making commitments today to attract private investment tomorrow. Indeed, we often measure the success of our public investment in economic development by the number of private dollars each public dollar attracts. The most effective economic development investment often takes place on the leading edge of the regional economy, where innovation stretches the region’s economy in new directions. Typically, many economic development investments involve public/private partnerships, because these investments often come at the leading edge of an existing regional economy. At this edge, profits are rarely high enough to generate private commitments alone. Still, investments on this economic frontier can generate significant public returns over time.
Read the Original PDF
