The Need for a Comprehensive Economic Development Approach in California

by Dr. Frederick Steinmann

Editor’s Note: This article is the first in a series of articles by Dr. Steinmann which will run bi-weekly on Mondays. Please check back on October 11, 2010 for Dr. Steinmann’s second article on Economic Development.

This past March I was able to attend the California Redevelopment Association’s Annual Conference in Pasadena.  Session after session, I heard from speakers in redevelopment and wider economic development from across the State of California that we need a comprehensive approach to economic development – not only to solve the current economic problems the State faces but in order to encourage long-term, stable, economic growth for the decades to come.

It really is remarkable that a state as big as California has never bothered to develop a state-wide, comprehensive, economic development strategy that ties the disparate and often contradictory local-level economic development strategies together.  Believe it or not, the State of California doesn’t even have a state-wide “economic development office”.  That puts California behind 49 other states that have at least a rudimentary state-wide economic development office.  Serious – every other state has at least a state-wide commission on economic development or office of economic development!  This is particularly surprising given how progressive the state government in California claims to be.  It seems that we can create state-wide commissions and offices for almost everything – except economic development.

At the 2010 California Redevelopment Association’s (CRA) Annual Conference, the opening plenary session was filled with some of the “heaviest-hitters” in the redevelopment and economic development community in the State of California.  Each one of the panelists argued for the creation of a state-wide office of economic development empowered to coordinate economic development efforts across the state at the local, county, and regional level.  This discussion, although revolutionary and ground-breaking for California, was really more of an “off-the-top-of-the-head” discussion.  Although there was talk about what such a state-wide economic development office would actually do (i.e. pursue and fund sustainable development efforts, pursue and fund workforce development and job creation programs, etc.), the discussion at the CRA Annual Conference really lacked the specifics that a more comprehensive approach (which is absolutely necessary) needs.

Over the coming weeks, I hope to use this blog to flush out what a state-wide comprehensive economic development approach would look like.  It is my hope that all of you reading this – students, faculty, economic development professionals, state, county, and local employees and administrators, developers, small business owners, etc. – will eagerly and actively participate as well.  If you read something that I’ve posted that you like, comment about it.  If you read something that I’ve post that you don’t like or disagree with, comment about it.  Even if you think that California doesn’t need a comprehensive approach to economic development, I want to know and I want to know why.

For now, I just wanted to lay out a few general ideas about economic development.  In the weeks to come, I hope to talk about each of these things separately in the blogs to come.

The International Economic Development Council (IEDC) – probably the premier economic development professional association currently in existence – defines economic development as, “…a program, group of policies, or activity that seeks to improve the economic well-being and quality of life for a community by creating and/or retaining jobs that facilitate growth and provide a stable tax base.”  At its core, economic development is about creating mid to high level skill jobs that pay mid to high wages, offer individuals meaningful opportunities for general upward mobility, and contribute to a community’s overall quality of life.  Economic development, in addition to job creation, job retention, and quality of life, is also about creating a stable tax base – something the State of California hasn’t had for at least four generations (maybe longer!).

Finally, the IEDC argues that economic development, in its broadest sense, encompasses at least three major areas (all three of which I’ll talk about in greater detail in future blogs):

  1. Policies that governments undertake 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.  These polices are national in scope and are referred to as macro-economic policies.
  1. Policies and programs to provide infrastructure and services such as building highways, managing parks, and providing medical access to the disadvantaged.  Although the primary purpose of these programs is not economic development, they have implications for economic development.
  1. Policies and programs explicitly directed at improving the business climate through specific efforts in business finance, marketing, neighborhood development, small business development, business retention and expansion, technology transfer, and real estate redevelopment among others.

The IEDC introduced these three broad areas of economic development nearly five years ago.  It’s time we started thinking about each of them more comprehensively and more strategically here in California.

Dr. Frederick Steinmann is currently the Managing Principal of his own firm, EDSolutions, LLC.  Dr. Steinmann began his professional economic development career with the Reno Redevelopment Agency in the City of Reno, Nevada.  Since then, Dr. Steinmann has worked for the Nevada Small Business Development Center, Bureau of Business and Economic Research (NSBDC-BBER), and as an intern for the Carson Economic Development Department in the City of Carson, California.  Frederick has also worked as an independent contractor for David Rosen Associates, one of the elite consulting firms in California specializing in redevelopment and affordable housing development.

Dr. Steinmann recently earned his Doctorate in Policy, Planning and Development from the University of Southern California.  Frederick completed and defended his dissertation, titled “The Twilight of the Local Redevelopment Era:  The Past, Present, and Future of Urban Revitalization and Urban Economic Development in Nevada and California”, in December, 2009.  Frederick is also a current and active member of the International Economic Development Council (IEDC) and the American Planning Association (APA).  Frederick also holds a Bachelors of Science (2002) and Masters of Science (2004) in Economics from the University of Nevada, Reno.

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2 responses to “The Need for a Comprehensive Economic Development Approach in California

  1. Pingback: NSBDC » Blog Archive » “Plan On! Trojans” and “The Twilight of the Local Redevelopment Era: The Past, Present, and Future of Urban Revitalization and Urban Economic Development in Nevada and California”·

  2. Pingback: What Economic Development Is « Plan On! Trojans·

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