Monday, July 23, 2012
WALES, REGIONAL ECONOMIES AND LEARNING FROM THE USA
And it came from a very unexpected source, namely the group that represents the governors of all fifty American States, namely the National Governors Association (NGA).
With national governments focusing largely on issues regarding the global economy and how to emerge from the financial mess that has engulfed much of the Western world over the last five years, administrations at a state, regional and local level are looking to take greater responsibility for economic development, especially in encouraging their local indigenous business base to grow.
The study, entitled “Growing State Economies”, provides ideas and options to help states to develop those policies that can encourage entrepreneurship and innovation. Drawing on evidence from academics, research foundations and, most importantly, the business community, it develops a framework to help the private sector to expand and create employment.
The report is the brainchild of Governor Dave Heinemann of Nebraska, who last year challenged the other forty nine states wishing to promote entrepreneurial activity and business growth to identify the innovation and industrial assets of their region; determine the best policy strategies to take advantage of their assets and strengths; facilitate relationships between groups such research institutions, investment funds, industry associations and professional networks as sources of ideas, funding and advice; and provide the education and training needed to prepare the next generation of entrepreneurs and business leaders.
To do so, it looks to exemplars of practical policies that have made a difference to each state economy. This includes tax credits offered by Arizona and Nebraska to investors in new businesses that produce medical devices, renewable energy and other high-tech innovations; a commission in New Jersey aimed at eliminating red tape; state-funded research labs in Oregon; and how small businesses in North Carolina and Washington could be helped in expanding into the international market. But this is only is this a report that builds upon best practice from each individual state, from Washington to Florida.
It also provides a set of policy guidelines that should be of interest to devolved governments and city regions within the UK. And being authored from the World’s largest economy, you would not be surprised to learn that it sees the key to economic growth as having as many innovative, productive and globally competitive businesses and workers as possible within each state’s borders. To achieve this, the report examines how governments at a sub-national level can help more start-ups launch and grow, assist firms to gain access to skilled labour, finance and international markets, and encourage new ideas and new technologies to gain acceptance in the marketplace, especially through the development of regional clusters.
As I am sure many of you will agree, none of this is rocket science but what the NGA has managed to accomplish, which many other public bodies have failed to undertake across the World, is to articulate a clear and simple vision of how public policy can support these different priorities that can generate and support economic growth.
It also demonstrates, with Republican and Democrat governors coming together to support this initiative, that there are lessons to be learnt by the different administrations in the UK on putting economic pragmatism above political differences, especially at this time in the global economic cycle.
There is much to learn from this report and, during the next few weeks, I will be focusing on some of the main policy conclusions and their potential impact on the economy. Indeed, with the Welsh government promoting the concept of city-regions and North Wales looking for greater economic co-operation across the six local authorities in the region, there may be much to learn from what is happening at a state and local level across the Atlantic.