Equitable Economic Development Theoretical and Applied Impact October 14 th 2006 Presentation for the 13 th Annual Critical Geography Mini Conference Department of Geography at The Ohio State University Denis Rhoden Jr. Associate Kirwan Institute for the Study of Race and Ethnicity The Ohio State University

2 Today’s Presentation ► Why is equitable economic development important in the global context? ► Equitable economic development initiatives

3 Regional Economic Development ► Richardson (1979) defines efficiency and equity in the regional context as:  Efficiency maximizing growth, assuming the optimization of resource allocation over time.  Equity refers to the reduction of disparities in income, wealth, and growth rates. ► Richardson’s Equity definition does not account for other potential intraregional inequities that may exist or result from disparity across class, race, gender, or other categories. ► Richardson (1979) argues for the promotion of “generative” growth, which views interregional development not as a zero- sum game but as the foundation for national economic growth.

4 Equity As A Market Basis For Change ► Intervention on efficiency grounds alone may not achieve equity goals. ► In fact, interventions that pursue equity grounds is more likely to accomplish both efficiency and equity objectives than is intervention on efficiency grounds alone.  May be especially true in poverty-stricken regions ill-equipped to resolve market failures as regional growth processes fail to conform to the standard neoclassical models. ► The appropriate strategy for improving interregional efficiency and equity depends on the nature of why groups or geographies divergence and the benefits and costs of diverting growth to need areas.

5 Reducing Volatility; Achieving Inclusion & Integration ► The nation is being challenged to be a more nimble global competitor as policy and physical infrastructure changes much more slowly.  Bernanke’s comments encourage policymakers to pursue strategies that meet two conditions: ► “The benefits of global economic integration are sufficiently widely shared,” and ► “Displaced workers get the necessary training to take advantage of new opportunities.” Source: Andrews L Edmund “Fed Chief Sees Faster Pace for Globalization” New York Times August 25, Source: Andrews L Edmund “Fed Chief Sees Faster Pace for Globalization” New York Times August 25, 2006.

6 The Perspective of Equitable Economic Development ► Equitable economic development is a policy and strategy focus aimed at correcting policy mismatches resulting in the inequitable distribution and/or access to opportunity.  In spatial terms (e.g. neighborhoods, cities, counties) and  For groups as well (e.g. African American, rural) disconnected from opportunity.

7 Capital and Asset Disparity ► Geographic differences in the ability to put assets to work - - > Capital does not impact the same assets the same way across space.  Largely episodic and geographically fragmented ► Easier access to credit ► Tax Incentives ► Many More

8 Noted Concerns of Existing Paradigm ► Hyper Competitive Policy Structure:  ‘Zero-sum game’: A gain is offset by another group’s loss ► Jobs traveling across taxable boundaries ► Inefficient use of subsidy to meet concerns within a typically short political life-span  Very few incentive programs allow for broader wealth redistribution to reduce inequity

9 Racial Disparity Weakens Collaborative Advantage ► Traditional economic development lacks the geographic scale to impact issues of inequity  Inequities harm everyone–inner city, rural and first-ring suburbs face similar decline, yet few policy solutions exist to reduce problems from common sources (i.e. land use management, infrastructure investment, education).

10 Why Equitable Economic Development? ► Equitable outcomes in economic development are equally concerned with the ability to access and the existence of opportunities  The public and private sectors are being challenged to think of new ways to pool resources and incrementally create opportunities.  Local land use and economic development policy, arguably the most hypercompetitive policy areas are holding hostage the value and opportunities a regional economic structure provides. ► Example: Poaching in economic development are the unintended consequence of mismatches in a web of policy impacting the fitness and productivity of assets.

11 Equitable Economic Development In Practice Equitable Economic Development Practice Areas Industry-focused workforce development MBE/SBD development Leveraging and distributing investments (Pension fund invest in inner city) Neighborhood development Stakeholders and Policymakers focused on these areas…

12 Equitable and Efficient Policy ► Concern about fairness,  Minority Business Accelerator ► encouraging productivity in the core, and  Land Value Taxation (Pittsburgh and Harrisburg) ► integrated opportunity distribution  Integrate economic and workforce development policy (US DOL WIRED)

13 Place and Life Outcomes ► Equitable economic development is intend to enhance and distribute prosperity and reduce barriers to capital for households and businesses  Equitable economic development is remedying the geographic disparity in employment opportunity and investment opportunities deprived areas

14 Linked Fate ► Why should households and firms in inner- ring, outer-ring suburbs, and exurbs care about inner-city disparities?  ‘Heralded Firms’ are increasingly being challenged by smaller firms as scope, not scale are drivers in the global economy. ► Regional productivity filters up. As such the wealth and vitality of all residents are increasingly interdependent  Global competition requires higher education and more educated persons. ► Education must be a principal driver to enhance regional collaborative advantage and to build wealth.

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