Growing regional economies

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A new US paper provides a roadmap for how regional economies can grow by cultivating new firms rather than chasing after existing ones.

The new challenge centers on what policies can encourage the formation of entrepreneurial business clusters.

The research supports streamlining local regulatory approvals and discouraging progressive taxation at the state/local levels.

The least attractive options involve policies that target spending on research programs or particular industries or firms – because localities rarely have the requisite expertise to make good decisions in this area.

The report addresses government policies that affect entrepreneurial activity e.g. education; local policies toward crime & amenities; physical infrastructure spending; legal infrastructure; general and targeted aspects of the tax code; targeted spending on entrepreneurial activities.

Go to “Entrepreneurship and Urban Success: Toward a Policy Consensus.”

Source: NDOE. 

BOTTOM LINE – Worth a read, although we don’t necessarily agree with their least attractive option – targeting of industries is possible if it involves strategic positioning. 

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