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Development concepts

Regional economic development

Regional economic development is the practice of strengthening the economy of an area — its jobs, incomes, businesses, and productive capacity — treated as a single interconnected system rather than a set of separate towns. It is the animating purpose behind most regional commissions and councils, and understanding it makes the rest of this landscape easier to read.

The core premise

Economies do not respect municipal boundaries. Workers commute across county lines, firms draw suppliers and customers from a whole metro or rural corridor, and a single large employer can anchor the fortunes of a dozen surrounding towns. Regional economic development starts from that reality: it asks what would make the region more prosperous and resilient, and then looks for the investments and coordination that would get there.

This is different from a single town trying to attract one factory. The regional view is concerned with the shared foundations that many employers and residents depend on — the roads and utilities, the skills of the workforce, the availability of sites and capital, the quality of place that makes people want to stay. Improve those foundations, the theory goes, and growth follows more durably than it would from any one recruited employer.

The main levers

Regional development bodies work with a fairly consistent toolkit. The recurring levers are:

• Infrastructure. Transportation, water and sewer, energy, and increasingly broadband — the physical platform that lets private activity happen. See the companion page on rural development and infrastructure.
• Workforce and education. Training, community colleges, apprenticeships, and skills programs that raise what local workers can earn and what local employers can build.
• Business development and capital. Support for entrepreneurs and existing firms — technical assistance, revolving loan funds, sites and buildings, help reaching new markets.
• Community and quality of place. Housing, downtowns, healthcare access, and amenities that determine whether people and talent stay in a region.
• Planning and coordination. The connective work of setting shared priorities so these investments reinforce one another instead of pulling in different directions.

How the strategy gets made

Most regional development is guided by a written strategy that a region produces for itself, usually through a broad-based process that pulls in local governments, employers, educators, and community groups. In the U.S. economic-development system this often takes the form of a comprehensive economic development strategy — a document that analyses the region's strengths and weaknesses, sets goals, and lists priority projects. Having such a plan is frequently a precondition for tapping federal and state grants, which is one reason the planning bodies described elsewhere on this site matter so much: the plan is the key that unlocks the money.

Measuring whether it works

Judging regional development is genuinely hard, because outcomes are slow, many forces are outside any commission's control, and it is difficult to know what would have happened without the investment. Bodies in this field track a familiar set of indicators — jobs created or retained, private investment leveraged per public dollar, changes in income and poverty, business formation, and the closing (or not) of gaps between a lagging region and the national average. None is perfect on its own, and honest evaluation pays attention to distribution as well as totals: whether growth actually reached the distressed communities a program was meant to help.