1. Economic Development: Global Scholars Forum Judith I. Stallmann, Professor Agricultural Economics, Rural Sociology, and Public Affairs Community Development Extension Specialist April 12, 2006

2. Constitution and Economics KoreaUnited States Coin money Foreign trade Interstate commerce Taxing power –No export taxes

3. Basis of law If not specifically allowed by the law, it is prohibited. –For an economy, results in rigidity If not specifically prohibited by the law, it is allowed. –For an economy, allows flexibility Which do you have?

4. Local power Korea United States Decentralized Overlaying local jurisdictions –General purpose governments with taxing and ordinance authority –Single purpose governments with taxing and implementation authority

5. Overlaying local governments Single purpose governments Multi-purpose governments Town School School School district Hospital district Water district County

6. Budget of General Government

7. Local government Structure of decentralized and overlaying local governments: Local governments have a lot of power Means need to collaborate and cooperate Means that they also compete –Often choose to compete on incentives and low taxes –Could compete on well-run government, quality of workforce, quality of life, business climate

8. Economic development National government determined Market determines Market with government policies and incentives –National government –Local government

9. Level for economic development? At the level of the majority of costs and benefits –Some projects have national importance National government giving incentives makes little economic sense unless it has an explicit regional policy

11. Collaboration and cooperation Between governments With businesses With citizens With non-profit agencies

12. Citizen participation Formal: Elections In some jurisdictions citizens can petition to put issues on the ballot Some laws require citizen input –Oversight commissions –Public hearings Informal Local government may ask for citizen input Citizens take an idea to local government

13. How to get citizens to participate Ask citizens for their ideas Work to make sure all groups are involved Meet where citizens are comfortable Have a history of using citizen input –Don’t ignore the ideas that you asked for

14. Economic development ideas All economic development requires a mix A concentration only on manufacturing and large scale infrastructure may not fit the current global economy Also may not fit the current national economy Services (or tertiary) include a lot of business services that are very important –Original idea was that services just served the local population—still true for some services, but not all –What you call things influences how they are viewed

18. Electric power, gas & water supply Construction Wholesales & retail trade, consumer goods Restaurants & hotels Transportation, storage, communication Finance & insurance Real estate rent & business service Public administration, defense, social security Education service Health & social welfare Other public society, personal service House-keeping service International & other foreign institution Social overhead capital and other services

19. Manufacturing

20. Economic development options Clusters Information technology can be broken into steps The creative class –Talent and technology needed, but not enough –Tolerance for new ideas and new ways of thinking leads to: Innovation and entrepreneurship in the private, public and non-profit sectors New ideas often come from outside the mainstream

23. Population Richard Florida: http://www.creativeclass.org/

24. Scientific Citations Richard Florida: http://www.creativeclass.org/

25. Patents Richard Florida: http://www.creativeclass.org/

26. Some questions that were asked

27. Is political ideology related to type of industry? A conservative city tried fashion and video and it didn’t work What attracts creative class? Quality of life in area Other talent in the area –Clusters are built on this Tolerance in the area

28. Tourism: An island with international tourism, is looking at manufacturing because tourism is too cyclical Transportation costs National tourism potential? –Mexico has done this Tourism areas have a high quality of life, which attracts the creative class –What options exist?

29. Everyone is talking about biotechnology Still new but will be as diverse as manufacturing is: Algae producing hydrogen for fuel Bacteria cleaning up oil spills Plants producing plastic or pharmaceuticals DNA computers Gene therapy Nano-biotechnology for medicine

30. Everyone is talking about IT Everything that we do relies on it Friedman, “The World is Flat,” talks about breaking down the IT steps

31. Universities Do they increase the local level of education? –Also need jobs to keep people in the area after they are educated Should you move universities? –Generally no, but can start new ones –Economies of scale for a comprehensive research university (creative class) –Focused research university (creative class) –Teaching university can be smaller

32. Judith I. Stallmann stallmannj@missouri.edu

33. Population

34. Price index