Economic Recovery, Pop-Ups and Sports Stadiums: This Month in Economic Development

Our monthly roundup of the latest news in economic development filtered through a city-focused lens. Reading something interesting? Share it with @robbins617.

Cities and Unequal Economic Recovery. How are local economies faring now that the worst of the recession is behind us? NLC recently surveyed mayors across the country to find out. In Cities and Unequal Recovery, NLC’s Christiana McFarland and Emily Robbins examine local economic indicators in cities and reveal that economic recovery is following two distinct paths – economic conditions are improving for some, but worsening for others. The report serves as a resource for cities on implementing inclusive growth strategies around affordable housing, workforce development, and wages in order to encourage equity in local economies. Check out the report’s coverage in the Wall Street Journal.

LEC Infographic 2015-03

Mayors are Talking, and We’re Listening: State of the Cities 2015. Economic development, infrastructure, and public safety are the top three issues on the minds of mayors this year, according to the second annual analysis of mayors’ state of the city speeches conducted by NLC’s Brooks Rainwater, Christiana McFarland, and Micah Farver. Among the speeches analyzed for State of the Cities 2015, 75 percent discussed new or ongoing economic development strategies. Take a peek into the minds of mayors in the report, and also check out the Fast Company op-ed and the Washington Post article.

Examining the Pop-Up Phenomenon. Pop-up programs, such as temporary retail markets and short-term occupancy of vacant office space, are a relatively new recruitment technique for economic development. This interesting article from The Guardian explores how pop-ups are popping up across the country, and examines whether or not these temporary solutions could lead to permanent benefits within our cities.

Are Local Businesses Vanishing? Speaking of vacant storefronts, this Governing piece highlights how gentrification in New York City is displacing local mom and pop businesses at a higher rate than ever. In particular, businesses are seeing their rents double or triple in price because of high-demand. A local blogger made the striking observation that, “Small businesses aren’t just struggling – they are being targeted for assassination.” NLC recently covered this issue in a blog post, along with some strategies cities are using to address commercial vacancies.

How the “Dark Store” Method is Hurting Commercial Property Tax Collection. The Institute for Local Self Reliance recently shared an eye-opening report on how big box companies can potentially manipulate property tax assessments in their favor, while putting local government budgets in jeopardy.

Ideas of the Month: The Old Takoma Business Association in Maryland recently launched a tailored loan program for small businesses funded by local investors from the community. Also, in Baltimore, a very generous restaurant made reservations during Restaurant Week only for those who can’t afford to pay.

What We’re Reading. The City Initiatives for Technology, Innovation and Entrepreneurship (CITIE) report from Nesta, Accenture, and Future Cities Catapult. (This is really a must-read.)

John Oliver, host of HBO's "Last Week Tonight."

John Oliver, host of HBO’s “Last Week Tonight.”

For a Laugh. HBO’s John Oliver from Last Week Tonight made some really interesting arguments for why local governments shouldn’t financially support the construction of privately-owned sports stadiums. Get ready to get outraged. (Note, some of the language is NSFW.)

Thing to Know: The Internet of Things. Get used to hearing this phrase. The Kauffman Foundation offers up an explanation for why it matters.

Links to previous editions of This Month in Economic Development are here, here, here, here, and here.

Robbins_small (2)About the author: Emily Robbins is the Senior Associate of Finance and Economic Development at NLC. Follow Emily on Twitter: @robbins617.


Workforce Development, Jobs Report, and Broadband: This Month in Economic Development

Our monthly roundup of the latest news in economic development filtered through a city-focused lens. This month’s roundup features stories from NLC’s Congressional Cities Conference. Reading something interesting? Share it with @robbins617.

"Photo by Jason Dixson Photography."President Obama announces his new TechHire initiative, which calls for a partnership between cities, higher education and the private sector to expand access to tech jobs in communities across the country, at NLC’s Congressional City Conference in Washington, D.C. last week. (Jason Dixson Photography)

White House announces TechHire initiative to expand skills training for tech jobs. President Obama addressed NLC’s membership at the Congressional Cities Conference and asked for cities to partner with him on TechHire, a new workforce program designed to train low-skilled workers for well-paying information technology jobs like software development, network administration and cybersecurity. The new initiative will include $100 million in competitive grant funding as well as private sector resources and support for 21 communities selected to participate.

Skills gap: myth or reality? Meanwhile, the ongoing debate continues over whether or not a skills gap actually exists in our country’s workforce. Tom Snyder, President of Ivy Tech Community College, wrote a piece for The Huffington Post about leveraging community colleges for skills training on emerging technologies. New York Times columnist Paul Krugman recently challenged the idea of a skills gap, arguing there’s insufficient evidence to prove a skills gap is holding back employment. However at the local level, where job opportunities are returning but going unfilled, mayors are responding by developing workforce programs to meet the specific hiring needs of area businesses (like in Missoula, Mont., and Heath, Ohio).

The latest employment trends in local government. NLC’s latest Local Jobs Report analysis by Christiana McFarland found slight gains in overall public sector employment, with local government responsible for the majority of those new jobs last month. But this positive news is tempered by the fact that the local government workforce is still smaller today than it was at its peak in 2008. Another local government trend highlighted by the Emerging Local Government Leaders (ELGL) network is the lack of growth in the percentage of chief administrative officers that are women. That number still stands at 13 percent – the same today as it was back in 1984. The thought-provoking ELGL “13 Percent” blog series features personal stories from city employees.

Municipal broadband could be coming to a neighborhood near you. In case you missed it, the Federal Communications Commission (FCC) voted to allow the municipal broadband systems in Chattanooga, Tenn., and Wilson, N.C., to expand outside their existing borders. This is encouraging news for other cities that are considering building their own broadband systems, like Seattle. The decision also affirms NLC’s position that municipal broadband systems can play an important role in supporting local growth and opportunity. More info from the FCC can be found here.

Cities are making the sharing economy work. NLC released a new report, Cities, the Sharing Economy, and What’s Next, at the Congressional Cities Conference. The report provides analysis from interviews with city officials about the impact of the sharing economy (and companies like Uber, Lyft, and Airbnb) on innovation and economic development and how cities are managing safety and implementation considerations. NLC’s Brooks Rainwater explained how this new resource will assist city leaders as they understand, encourage, and regulate the sharing economy in their cities.

For a laugh. Not to start a dog-versus-cat war, but how great would it be if every economic development strategy included plans for a cat café? Meanwhile in Boston, a GoFundMe campaign aiming to raise $300 million to fix the struggling local transit system first started out as a joke but is now receiving national media attention. The campaign is unlikely to reach its goal, but if you donate $50, the fund’s creator will scream your name on the orange line for 45 minutes during rush hour.

Idea of the month: Life experience as college credit. Getting a degree later in life is hard, but Pennsylvania’s community colleges are making it easier by now counting life experience as college credit.

What we’re reading. There were a few solid reports this month on workforce, wages, and jobs. Brookings released a report identifying the advanced industries with the greatest prospects for long-term economic growth (Governing provided a solid overview of the key findings). The Boston Consulting Group found that the top three reasons companies bring manufacturing jobs back to the U.S. are better access to skilled workers, lower shipping costs, and shorter supply chains. Finally, the Economic Policy Institute testified before Congress about government actions needed to create jobs and grow wages. The testimony said that local governments should implement targeted employment programs and also invest in broadband, education, transportation and other infrastructure projects.

(Last month’s roundup is here.)

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About the author: Emily Robbins is the Senior Associate, Finance and Economic Development at NLC. Follow Emily on Twitter: @robbins617.

The Latest in Economic Development

This week’s blog discusses NLC’s 2013 Local Economic Conditions Survey results, a new ranking of state and metro-area small business friendliness, Detroit’s downtown development, a new economic development initiative announced by Mayor Angel Taveras of Providence, Rhode Island, and the economic impact of Major League Baseball. Comment below or send to

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NLC released the results of its 2013 Local Economic Conditions Survey today. From the press release: “The 2013 survey of city’s chief elected officials signals a sluggish overall economic recovery in cities and towns across the United States, despite a broader national recovery. While just over half (52%) of respondents reported improvement in unemployment, two-thirds of city officials said that persistently high unemployment rates continue to cause economic instability in their communities. Further, the changing nature of the economy has underscored the need for local workforces with skills appropriately matched with local employer demand, but data from cities reflects that a skills gap is actually becoming more prevalent.”

Thumbtack, partnering with the Kauffman Foundation, released a ranking of state and metro small business climates this week. The report found that while tax rates don’t necessarily carry a lot of weight in determining small business friendliness, licensing requirements have a significant effect. Co-author of the report Nathan Allen says of licensing: “The time [small businesses] have to spend on it can become a serious burden to their growth.” Utah, Alabama, and New Hampshire topped the small business climate ranking of states; and Austin, Virginia Beach, and Houston topped the list of metro areas.

In related news, Mayor Angel Taveras, of Providence, R.I.,  announced a plan to strengthen the city’s economy by becoming more small business friendly. To that end, he is supporting an initiative to expedite the application process for small business permits. This will be accomplished by allowing online submissions and a system of status updates that will inform small businesses of their application’s progression.

Billionaire Dan Gilbert’s accumulation of downtown Detroit properties has been well documented. Last week, he laid out ambitious plans to develop the areas around his real estate. At the unveiling, “Gilbert’s team repeatedly emphasized possibility… to change the discussion from financial basket case to a city on the move attracting smart people and smart money.” Through his properties, Gilbert has attracted new business tenants – tech companies, an upscale grocery store, a Moosejaw retail store, and others – designed to “create street-level energy that is inviting and comfortable.”

For downtown businesses in Cincinnati, the opening of baseball season (already?) means an in-season economic stimulusLinda Antus of the Cincinnati USA Regional Tourism Network estimates the Reds’ economic impact at “hundreds of millions a year.” Entertainment events like baseball games represent discretionary spending, so if the Reds didn’t exist, the money would most likely be spent elsewhere. But there’s no doubt that the city gets a big spending boost – not to mention and influx of visitors from surrounding locales – on game days.

Latest in Economic Development

This week’s Latest in Economic Development looks at a new regional partnership in St. Louis, ideas for improved small business permitting, more on a library co-working space, and the economic development effects of the sequester.

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St. Louis City and County announced a new partnership for economic development. The partial merger still preserves each individual jurisdiction’s economic development offices, but will combine “business development and attraction, loan programs and entrepreneurship efforts” under one umbrella. According to St. Louis Mayor Francis Slay, “We’re going to work together to make sure that business lands in St. Louis. And whether its city or county, we all benefit. It’s a regional economy. And we have to stop competing against each other.” The move received support from the business leaders who stressed that businesses want simplicity, leaders who work together, and one agency to interface with.  To learn more about regional economic development, check out NLC’s brief on the topic.

Waiting in line at city hall is a drag, and mayors are looking for solutions to simplify processes for new businesses.  As a finalist for Bloomberg Philanthropies’ Mayors Challenge, St. Paul Mayor and NLC First Vice President Chris Coleman makes a case for Permit Saint Paul, an online portal to secure businesses licenses and permits. The idea is to help residents avoid  the bureaucratic morass that can be part and parcel of the in-person licensing and permitting process. (Check out the other city finalists here at the Huffington Post.)

In San Antonio, Mayor Julián Castro is also trying to streamline things for small and new businesses. The Mayor is calling for a library-based one-stop shop where businesses could “get information, and the resources, the market data and the assistance they need to start their business.”

Speaking of libraries and small business, Atlantic Cities has details on Arizona State University’s “Alexandria Network.” The program will set-up dedicated co-working spaces and offer entrepreneurship courses and training in public libraries. According to Atlantic Cities’ Emily Badger, libraries are an ideal venue for the effort because “they offer a more familiar entry-point for potential entrepreneurs less likely to walk into a traditional start-up incubator.” The first location, mentioned in the last Latest in Economic Development, will be launching in partnership with the city of Scottsdale, AZ. next month.

Well, it’s happened, and the direct economic development effects of the sequester will largely play out in communities with defense-driven economies. It’s no surprise that the greater Washington, DC metro region will take a hit.   Military communities like Hinesville, GA and Killeen, TX, which expects 6,000 furloughed workers at Fort Hood are bracing for the impacts. And the three percent growth rate of the Greater Phoenix region is predicted to be cut by about half because of the sequester.  According to Mayor Scott Smithof Mesa, AZ, the region’s big economic contributors like Boeing will be fine, while smaller suppliers who depend on contracts with the larger companies will likely be the ones that suffer most.

Learn more about NLC’s economic development work here.

The Latest in Economic Development

This week’s blog discusses the merits of German and Swiss apprenticeship programs and college credentials, heartland startup culture, a new incubator program in Arizona, and a community benefits agreement between Columbia University and West Harlem. Comment below or send to

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A recent publication by the Richmond Fed describes the merits of German/Swiss-style apprenticeships for students, helping them transition into the working world more easily. The results speak for themselves; unemployment for ages 15-24 last year in Switzerland was 7.7%, 8.5% in Germany, and 17.3% in the US. Other factors are surely at play, but on-the-job training makes a big difference. The US still focuses largely on the attainment of traditional university degrees, leaving high-tech manufacturers looking for qualified applicants and creating a stigma that technical education is a step down. That’s not to say that college isn’t worthwhile, as university graduates tend to have better job prospects and higher earning potential in the long-term. There doesn’t have to be a trade-off though; the best approach is likely “not an either-or, but a dual system.”

Over at Bloomberg, Peter Orszag takes the view that more college graduates would contribute to faster economic growth.  He reckons that a slowdown in the rate of college degree attainment has made income inequality worse and stifled growth.

A new network is forming in Arizona called the Alexandria Network, which will place incubator-style co-working spaces in public libraries.  It’s a collaboration between Arizona State and ASU Venture Catalyst, along with the Scottsdale Public Library. The plan is to eventually scale the model across the state. The pilot program will have the support of the City of Scottsdale’s economic development team, and ASU will use “proven startup content, experienced entrepreneurial mentors, and ‘pracademic’ teaching modules” to support the new spaces. According to Scottsdale Mayor Jim Lane, “we are creating an ecosystem for success to occur in Scottsdale, and many companies here are benefitting from that.” He also adds, “…the free resources and opportunities to connect and learn from fellow business people provided through the Alexandria Network will be a powerful asset for them.”

If you’re interested in startups, entrepreneurship, and accelerators, particularly in destinations that aren’t Silicon Valley or New York, the Wall Street Journal has a whole host of articles for you to peruse.  One of the locales WSJ features is Omaha, Nebraska, a middle-American city not exactly known for its dynamic entrepreneurial climate. But there are advantages to Omaha that aren’t always that obvious. For one, “while more and more startups are drawn to Omaha, it’s not quite as saturated with competition like New York City or Silicon Valley. That makes new businesses strong magnets for talent who are looking for fresh opportunities. Not only is it easier to recruit local talent, Midwestern transplants on the coasts are often looking for opportunities to come back home, where the cost of living is lower.” Also, in Midwestern tradition, “there’s an incredibly strong work ethic,” and “the community support for local businesses is…pretty powerful.”

Columbia University’s expansion in New York City has been a point of contention in West Harlem, but a community benefits agreement is allowing community groups access to much needed funds. The agreement between Columbia and the West Harlem Local Development Corporation entails $76 million to be disbursed to the WHLDC over 16 years. The money is handed out to community applicants in grant cycles, and the applications “paint a nuanced portrait of West Harlem.” Some of the proposals are for elbow-grease projects in community development, while others are for creative projects such as a proposal to “teach about 25 youths how to raise organic fish and produce using an aquaponic system.”

The Latest in Economic Development

This week’s blog discusses free online education, the economic impact of hosting a Super Bowl, a new ILO report, and the difficult passage from education to employment. Comment below or send to

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I don’t always agree with Tom Friedman, but when I do, it’s when he’s optimistic about free online education sites like Coursera and Udacity. Simply put, these sites have blown up. Friedman notes that last May, 300,000 students were taking 38 courses through Coursera; today, the site has 2.4 million students taking 214 courses from 33 universities. Friedman likes to imagine how these education platforms could change foreign aid, but in an economic development context, I’m thinking about how they could change workforce development.  Nothing can match on-the-job, in-person work experience, but think about how a student could learn – for free – the underlying features of, or how to operate, advanced manufacturing machinery before he or she steps on the factory floor. Right now, many of the courses offered online are purely theoretical, but this is the internet; there’s plenty of room to add more applied subjects. And, as a current Coursera user, if the student is completely committed to the curriculum, these courses do work.

The Super Bowl is this weekend. What’s it worth to the host city, in this case New Orleans? Reuters reports that “officials have estimated the economic impact of the Super Bowl on New Orleans at $434 million, outstripping a projected $238 million for the annual Mardi Gras festival the following week.” But the city has also put up big money in preparation: $350 million on the airport, $95 million on the convention center, and $300 million on the Superdome, where the game will be played. Of course, there are a number of skeptics who dispute the Super Bowl boost. CBS News reports that actual economic activity rarely meets rosy pre-game predictions, mostly due to how the forecasts are formulated. For New Orleans though, Super Bowl weekend is about more than the dollars that will flow into the city. It’s another bright spot on the long road back from the devastation that Katrina brought to this tourist-dependent destination.

Unfortunately, the International Labor Organization released a report last week that predicts a rise in global unemployment and a worsening of the “skills mismatch.” While many (including NLC) are still debating whether the data bare out a true skills mismatch in the US, the ILO uses global data to state its case. The story goes that in the crisis, many workers lost their jobs in industries that were contracting, so the chance of being employed in the same industry was slim. Being forced to switch to a new industry or sector inevitably led to a situation where the worker’s skill set was not suitable to find new employment. Another reason for persistent unemployment is that investment has not returned to pre-crisis levels. The report explains: “The indecision of policymakers in several countries has led to uncertainty about future conditions and reinforced corporate tendencies to increase cash holdings or pay dividends rather than expand capacity and hire new workers.” Get the full report here.

McKinsey has been studying the passage from education to employment – why employers are finding it difficult to find graduates with adequate preparedness for the workplace. Keep in mind that McKinsey tracked global data, but certain themes emerge, such as a disconnect between what education providers think they are offering, what students think they are getting out of education, and what employers are seeing in applicants and new hires. For example, 72% of education providers believe “new graduates are ready to work,” while only 42% of employers and 45% of youth feel this way. Also, “39% of education providers believe the main reason students drop out is that the course study is too difficult, but only 9% of youth say this is the case (they are more apt to blame affordability).” Get the full report here.

The Latest in Economic Development

The Latest in Economic Development is back after a holiday hiatus and we’re kicking the year off with a look at a new program in NYC, the Bay Area’s food truck related growth, Phoenix’s economic recovery, and a round-up of the new city rankings.

Have thoughts or pieces to add? Comment below or email me at

Businesses in New York City get a new way to interface with government.

As part of a city-wide effort to provide more business services online, New York City’s Department of Consumer Affairs (DCA) launched a new live chat to help answer questions about regulations. According to Crain’s New York Business, business owners who sign in to the system are greeted by a DCA staff person and asked, “How can Consumer Affairs help you today?” in a Google Chat type format. In addition to the new online chat system, the city hopes to have 80% of applications for business permits and licenses online by the close of 2013.

Food trucks are in high demand, but they’re not the only businesses profiting from the mobile food craze.

According to Ben Worthen in The Wall Street Journal, the addition of an estimated 250 food trucks in the Bay Area has generated demand for other local businesses like vehicle customizers and logo makers.

Recovery is good, but will cities repeat past mistakes?

The Phoenix region was one of the hardest hit by the recession and is now experiencing a quicker than average recovery. However, Richard Shearer and Shyamali Maya Choudhury caution in The New Republic, Phoenix and other similar regions’ recoveries are driven by the same consumption industries like hospitality, retail, construction and real estate that “sunk their economies” in the first place. Further, these regions must move  “from a growth model focused inward and characterized by consumption to one that is globally engaged and driven by production and innovation.”

Not to be outdone by all Golden Globes, the new year brings a sort-of “best dressed list” for the economic development crowd.

Forbes released its “America’s New Tech Hot Spots” using research from the Praxis Strategy Group.  According to the ranking, which measures growth in science, technology, engineering and mathematics-related (STEM) jobs,  traditional tech hot spots have remained flat or lost STEM employment while “…double-digit rate expansions of tech employment have occurred in lower-density metro areas such as Austin, Texas; Raleigh, North Carolina; Columbus, Ohio; Houston and Salt Lake City.” The Washington, DC region came out on top in the rankings.

While San Jose, California was slighted in the aforementioned “America’s New Tech Hot Spots,” it took top billing in The Milken Institute’s Best Performing Cities, which uses a variety of weighted metrics (job growth, wage growth, concentration of tech companies, etc.). The Austin and Raleigh metropolitan areas captured the second and third spots.

The Latest in Economic Development

This week’s blog discusses a new report focused on the recent (and future) performance of the Great Plains, the Boston Consulting Group’s take on the skills gap, an example of the “knowledge problem” with regard to incentives in Oregon, and preparing your city for millennials. Comment below or send to

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A new report by Joel Kotkin takes on the role of America’s Great Plains in the 21st century. Many observers (those on the coasts) had predicted the region’s downfall, but in reality, the Great Plains have done very well: “Paced by strong growth in agriculture, manufacturing and energy – as well as a growing tech sector – the Great Plains now boasts the lowest unemployment rate of any region.” Three factors will continue this trend: 1) natural resource wealth; 2) technological advancement; and 3) demographic changes. Download the full report here.

The Boston Consulting Group says that the “skills gap in US manufacturing is less pervasive than many believe.” This statement follows the consulting firm’s continued predictions of a resurgent US manufacturing sector. BCG notes that the shortage represents less than 1% of all US manufacturing workers and less than 8% of highly skilled manufacturing workers. Furthermore, “only seven states – six of which are in the bottom quartile of US state manufacturing output – show significant or severe skills gaps.” That said, the report notes that a skills gap could be a growing problem down the road, particularly as high-skilled manufacturing workers begin to retire. The release also highlights a few programs designed to close the gap, including Quick Start in Georgia and the Austin Polytechnical Academy in Chicago.’s recent decision to open in office in Portland, Oregon, highlights the murky environment of economic development attraction, where imperfect information often places officials between a rock and a hard place. Utah was also trying to land the firm and was purportedly preparing to offer a multi-million dollar package, but no deal materialized. On the surface, the end result makes Oregon look foolish for offering generous terms when with no real competitor, but the idea that Oregon was pre-emptively preparing for an incentive war is probably misguided; the Oregon Business Development Department said that its offer wasn’t based on what Utah was or wasn’t offering. It “weighted the value of the Salesforce jobs against the cost of incentives.”

At, Bill Fulton prophesizes that “just like baby boomers, the preferences of the millennials will drive our society for two generations. They’re making location decisions based on their idea of quality of life. And they’re going to make all those decisions in the next few years – by the time they’re 35.” Fulton reckons that if cities want to attract these up-and-comers, decision makers and planners only have a few years to set the tone. But he likes what he is seeing; from Omaha, Nebraska to Rochester, New York, second tier cities are developing urban cores to cater to millennial tastes.

*** The “Latest in” will go on a short hiatus and return in December.

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

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.

The Latest in Economic Development

This week’s blog discusses cities’ quests to foster technology hubs, new strategies beyond traditional manufacturing, the impacts of re-shoring, a commitment to streamlining small business regulations, and rural economic development strategies. Comment below or send to

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

Possessing high-tech startups is obviously a tremendous asset for cities, but developing a “tech hub” is not a realistic goal for all cities. At, Matthew Yglesias explains that “while it would obviously nice to become the next Silicon Valley, the fact is that Silicon Valley is already where it is.” Focusing on the fundamentals (schools, infrastructure, etc.) is more important than choosing the “hot” sector of the day. Inventor extraordinaire James Dyson, of vacuum cleaner fame, recognizes the value of non-tech, which is why he is establishing an incubator at his alma mater that will focus on engineering physical products. Dyson says that “with the world abuzz with digital, we are losing sight of real engineering.

If manufacturing is going the way of agriculture in the 1800s due to technological advancement and globalization, economic development must look at opportunities beyond manufacturing in the traditional sense (including beer). In the case of western North Carolina’s Transylvania County, Dale Katechis of Colorado’s Oskar Blues Brewery located a production facility there because two of his interests – mountain biking and lowering shipping costs to the east coast – aligned organically. But there are also steps regions and cities can take to stimulate non-traditional manufacturing operations. Kalamazoo, Mich. recently modified its zoning regulations to allow bakeries and breweries to locate downtown. This heads-up move is serving to accommodate the already burgeoning “beer trail” in west Michigan. For more on how cities are courting craft breweries, check out this post from NLC’s Katie McConnell.

Many commentators are hoping that “re-shoring” will turn the tide of the US economy, signaling a return to increased exports and manufacturing capacity, but this view may be premature. The rationale behind the shift is the changing economic fundamentals between the US and China. Knowledge@Wharton notes that in 2000, “US wages were almost 22 times higher than those in China, but by 2015, wages in the US will only be four times higher.” While this may turn out to be true, the article points to the fact that wage rates are not the only determinant a company considers when deciding where to locate, not to mention there are options other than China to source low-wage labor, including Vietnam and Indonesia. Re-shoring is an encouraging development, but it probably won’t catalyze a new explosion in US manufacturing.

Two of America’s largest cities are re-focusing their efforts on streamlining regulations for small businesses. Responding to a spike in the number of fines levied on small businesses, New York is committing to a review of the city code to remove obsolete regulations, issue warnings instead of immediate fines, provide customer service training for inspectors, and establish an agency liaison to industry groups. Rahm Emanuel is also joining the party with a proposal to “restructure the city’s business licensing center with the aim of helping small businesses get licenses and find potential financial assistance more quickly.”

Economic development in rural locales presents its own set of unique challenges and opportunities. A recent article from the USDA outlines five key lessons for rural economic development strategies: 1) wealth creation is context dependent; 2) it is critical to understand the interrelationships among multiple forms of wealth; 3) degrading some types of assets may undermine the benefits of investing in others; 4) diversifying assets may reduce risk; and 5) local ownership has benefits but may also entail risk.