Guidelines for economic downturns – USA view

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The Corporation for Enterprise Development (CFED) in the USA has released its latest Development Report Card on the States (visit http://drc.cfed.org/).

It includes guidelines for state government policymakers to cope with economic downturns – perhaps self-evident, but worth repeating. 

1.       Set spending priorities based on what’s critical for your area’s long-term success.

2.       Consider investments in education, health care, and child development as part of an overall economic development strategy that needs to be maintained in both good and bad times.

3.       Use tax incentives judiciously and strategically, and only in concert with accountability and performance checks.

4.       Make tax reforms to balance often competing goals of equity-efficiency-sufficiency-competitiveness.

5.       Focus on your homegrown economy – don’t let recruitment drive your development strategy.

6.       Create realistic and measurable objectives that reflect your real development goals.

7.       Provide direct labor subsidies if job creation is a prime imperative.

8.       Invest in community leadership and assist unemployed workers, while selectively helping declining, but viable firms.

9.       Use limited government resources to direct and leverage other development services.

10.    Give frontline staff more power to make decisions and to respond flexibly when delivering services.  

Outside investment is an important shot in the arm for a state or local economy. But most jobs are still created by one’s homegrown economy. Businesses do not move when their locations make sense. So, strengthen existing business, promote entrepreneurship, and make wise investments in schools, workforce development initiatives, universities, and the physical infrastructure.

 Source: via NCOE

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