Technology and Regional Economic Development

One of the first things I notice about the cities I visit are cranes on the horizon.  To me, they are a rough indicator of economic vitality.  Even treasured cities of the world have cranes outside their historical cores.

There is fierce competition among cities and governments to attract businesses, innovators, and investment.  For governments considering how to create economic growth:  there seem to be 3 key questions:

  • What makes this community a compelling place to live, work, visit, and do business?
  • What makes a business want to relocate, stay, expand or grow here?
  • What is the right balance of funding for competing priorities like citizen quality of life, schools, and economic growth?

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Typically, governmenthttps://www.ibm.com/blogs/insights-on-business/government/wp-content/uploads/sites/20/2013/10/ED.jpg economic development plans hinge on tax incentives or lease agreements to companies to locate or expand.   However, that traditional model is becoming unsustainable.  These payments and incentives are frequently either too expensive or ineffective.  Areas of the same region even compete against each other in a seemingly zero-sum game to attract each other’s businesses.

Recently, Boeing went through a search process to find locations to build components of its updated 777 jumbo jets.  To be built using the advanced materials and manufacturing technologies, 20 states, Japan, Mexico, and others wanted that type of business in their region.

Each government included tax and lease incentives in an attempt to lure Boeing.

During the process, even Boeing stepped back and reminded the bidders – the decision would be about more than incentive payments.  Community, access to talent and skilled resources, transportation, education, and infrastructure — all would play a role.

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The role of technology in knitting these elements together is increasingly well understood.  Even seemingly routine investments in technology can enhance economic vitality.   This is possible through the explosion of social, mobile, and cloud computing — along with a titanic eruption in data and the ability to analyze it and use it.

Over the next month, I will write about technology and economic vitality.  I’ll touch on a few different topics:   urbanization, older people, younger people, and how governments can consider the economic impact of investments.  Globally, the over-65 population is expanding faster than any other demographic.  The scourge of youth unemployment is a challenge across the planet.  Even governments and regions differentiate themselves on relative effectiveness and efficiency of how well they operate.  Definitely, share your feedback!

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You can download the IBM Economic Development point-of-view by clicking here. To know more about this smarter approach to economic development, register for the replay of IBM’s Global Symposium on Economic Development and Vitality and listen at your leisure.

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