The Latest in Economic Development

This week’s blog discusses a new type of hybrid high school/community college, the merits (and demerits) of casinos, Chinese and Japanese FDI, and downtown development. Comment below or send to common@nlc.org.

Get the last edition of “The Latest in Economic Development” here.

Since education is so closely tied to our nation’s future economic success, it’s very encouraging to see out-of-the-ordinary schools like New York’s Pathways in Technology Early College High School cropping up. Pathways is a school that features a six-year curriculum developed with help from IBM where students “emerge with associate’s degrees in applied science in computer information systems or electromechanical engineering technology.” This proactive program is designed to prepare students for entry-level technology jobs by giving them not only tech skills, but also skills to navigate the workplace. Other cities and states are taking notice, with Maine, Massachusetts, Missouri, North Carolina, and Tennessee planning to create similar schools. In the end, it’s all about bringing careers closer to the classroom.

If you live in the DC area, you’ve probably seen about a gazillion campaign commercials concerning a new casino project in Maryland. Are these projects all they’re cracked up to be?The motivation behind allowing new casinos is that they often provide increased tax revenue for cities and states, which can be a blessing considering the current state of public finance. Also, they provide jobs, though the majority of new jobs are for lower-skilled workers, which isn’t necessarily a bad thing. But casinos aren’t immune to economic cycles, and industry revenues haven’t returned to their 2007 peak. Furthermore, “last year, wages and the number of jobs fell across the industry. And commercial casino tax revenue dropped in 9 of 22 states.” Competition from neighboring casinos in saturated markets can also put a damper on expected tax revenue increases.

“In just the first three quarters of 2012, Chinese businesses have invested $6.3 billion in foreign direct investment projects in the United States. It’s already the most capital Chinese firms have ever invested in the US in one year” says a new report from the Rhodium Group. Most of these deals are mergers and acquisitions – not greenfield investments – which can be interpreted positively or negatively depending on who you are. But Chinese FDI has largely been concentrated in advanced manufacturing and energy, sectors which provide higher wages for Americans.  Japanese firms are also getting involved, with Softbank’s acquisition of Sprint being the “largest Japanese acquisition of (an) American company in more than 30 years.” The deal highlights a cultural shift in the perception of Japanese FDI in America, where something that was once feared is now welcomed. Some of this fear has now been transferred to Chinese investment, sometimes justified, but other times overblown. Stay tuned for Monday’s post about Toledo, Ohio’s pursuit of Chinese FDI.

Why is Savannah, GA’s downtown booming, and how is Rock Hill, SC trying to revitalize theirs?Savannah has been able to take advantage of the tremendous assets it already has (walkability, tourism, history and the Savannah College of Art & Design) to transform its downtown for the better after a relatively rough period only a few years ago. It has turned into a modern take on an American classic. Rock Hill has also gone through a rough stretch with regard to its downtown, and, like Savannah, it has a historic city core.  Through infrastructure improvements, street-scaping, and a mix of incentives to attract businesses, Rock Hill is doing its best to take advantage of its historic assets, though not everyone is on board.

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