Economic Development - Regional Policy

Regional Policy

In its broadest sense, policies of economic development encompass three major areas:

• Governments undertaking to meet broad economic objectives such as price stability, high employment, and sustainable growth. Such efforts include monetary and fiscal policies, regulation of financial institutions, trade, and tax policies.
• Programs that provide infrastructure and services such as highways, parks, affordable housing, crime prevention, and K–12 education.
• Job creation and retention through specific efforts in business finance, marketing, neighborhood development, workforce development, small business development, business retention and expansion, technology transfer, and real estate development. This third category is a primary focus of economic development professionals.

One growing understanding in economic development is the promotion of regional clusters and a thriving metropolitan economy. In today’s global landscape, location is vitally important and becomes a key in competitive advantage. The cluster of similar industries, specialties, skilled laborforce, and technologies help lower transaction costs and foster a growing environment of commerce, entrepreneurship, exports, and other market productive activities. Additionally, local services such as restaurants, stores, and trades experience growth as well, helping to develop a vibrant region for the wider community. Even the U.S.’s Economic Development Administration recognizes the importance of clusters with their continued Regional Innovation Clusters initiative which aims to “create jobs and grow the economy” through the geographic concentrations of industries and firms in their need for talent, technology, and infrastructure.

International trade and exchange rates are a key issue in economic development. Currencies are often either under-valued or over-valued, resulting in trade surpluses or deficits.