Development

1. Development The American Experience

2. Human Development Index Within the United States Methodology: To determine a state's livability rating, each state's rankings in 44 categories were averaged. Some of the positive factors included household income, homeownership, job growth, and educational attainment. The negative factors included crime rate, poverty rate, infant mortality rate, and unemployment rate.

3. Negative Factors in State �Livability� (HDI) Rating

4. Positive Factors in State �Livability� (HDI) Rating

5. Why Do Urban Regions Grow? There is no definitive theory of urban economic development. But the link between development and urbanization occurs frequently in all conceptualizations. Economic base studies associate growth with the sale of goods outside the community, typically manufactured products. Alternatives to economic base theory are growth pole theory (ties socioeconomic expansion to the prowess of large urban areas in providing self-generating expansion) and industrial development (a perspective that overlaps economic base theory and growth pole theory)

6. Wilbur Thompson�s Stage of Development Export specialization � a local economy emerges under the aegis of a single manufacturing firm, and begins selling goods for export outside the community. Export complex � additional companies begin production to supply inputs or purchase outputs from the original enterprise. Economic maturation � the growth of a local service sector (retailing, wholesaling, transportation, etc.) Regional metropolis � the city becomes a center servicing what once were rival cities that are now its economic satellites and an economic hinterland. Technical-professional virtuosity - signals the national or international preeminence of a city in a particular topical area.

7. Community Economic Base

8. Combining Rostow & Thompson ? Traditional society Pre-conditions for �take off� Take off ------------? Drive to maturity---? Mass consumption Export specialization Export complex Economic maturation Regional metropolis Technical-professional virtuosity

9. Urbanization and Localization Economies Large cities can offer advantages through larger labor markets, greater access to financial resources, a broader range of infrastructure support � urbanization economies. However, it may be that like concentrations of industries (localization economies) frequently occur in cities and that they are there not because of the large size of the city but to take advantage of skilled labor markets, to foster intra-firm cooperation/communication, to keep abreast of innovations, and to take advantage of opportunities for greater levels of specialization. A �chicken and egg� dilemma ?

10. Basic/Non-Basic Ratios Basic activity � produces goods and services in the urban area but sells them beyond the city. This export of goods and services brings income that provides the base for urban viability and growth. Non-basic activity � the provision of goods and services for the city itself. Because there is no export involved, no income is attracted from the outside and no new wealth added to support urban growth.

11. The Impact of Basic Jobs on Urban Growth The basic/non-basic ratio varies with city size: the larger the city, the greater the non-basic proportion of total employment. In other words, 100 basic jobs will create a larger number of non-basic jobs in New York City than in Tallahassee FL. NYC = 100:215 Cincinnati = 100:170 Detroit = 100:117 Albuquerque = 100:103 Tallahassee = 100:90 Madison = 100:82 Sullivan WI = 100:35 (between Milwaukee and Madison with a population of 434)

12. Basic/Non-Basic Ratio andCity Size

13. Major Airports as Economic Development Catalysts Jobs types created by airports direct: those held by people in the employ of the airline or airport itself (1,848 jobs per 1 million enplanements) indirect: those hotel and non-hotel related jobs associated with visitors (non-hotel jobs = $ spent near destinations such as offices, convention centers, etc.) induced: the multiplier effect of direct and indirect jobs (0.66 induced jobs for each direct or indirect job) catalytic: those attracted to the vicinity of the airport because of superior accessibility Considerable job growth can be expected to cluster around the 30 major hub and 40 medium hub airports. Those airports that are landlocked can expect to see flights and jobs transferred to new facilities.

14. Perroux�s Growth Pole Thesis �Growth does not appear everywhere at the same time, it becomes manifest at points or poles of growth, with variable intensity; it spreads through different channels, with various terminal effects on the whole of the economy.� Francois Perroux 1903-1987

15. The Basics of Growth Pole Theory - Part I Blends growth theory and spatial theory Extends the concept of location rent Two levels to the theory 1. Interregional relationships Which regions grow How do regions grow

16. The Basics of Growth Pole Theory - Part II 2. Intersectoral Relationships Concentration of industries Spatial relationship among dispersed industries Linkages Agglomeration effects Polarization (separated clusters) Central place theory Over time complexity of growth poles rises and hinterland expands

17. The Basics of Growth Pole Theory - Part III Unlike central place theory, here the regions may have interactions in both directions Multipliers rise with import substitution Complex concept of linkages

18. The Growth Point and the Region The growth point is surrounded by a swarm of affected industries, thinning out as you move away from the growth point. At a later stage, the growth point has spawned a secondary growth point.

19. Differential Growth

20. Differential Growth

21. Differential Growth

22. Growth Pole Theory More elegant and applicable than economic base Growth is not spatially uniform It�s concentrated at points (poles) Growth begets more growth Growth pole effect operates on cities themselves Also within cities as some area grow while other lag behind Most theories of urban development have growth pole theory at their core �Build it and they will come!�

23. Uneven Impacts of Regional Growth Concentrating investment in one area usually leads to polarization of development. As growth accelerates in the urban area, the hinterland experiences a parallel decline. Also called �backwash�, this involves the out-migration of rural residents from the hinterlands to take advantage of urban job opportunities. The end result is that the hinterland can become more impacted and less able to meet local needs.

24. Polarization & Trickle Down Growth at poles = decline in peripheral areas �Backwash effect� = loss of jobs and migration of young to growth poles Counteracted over time by �trickle down� effect which makes periphery more attractive spurring urban and rural migration

25. The Trickle-Down Process or the Spread Effect A trickle-down process (Albert Hirschman�s term) or spread effect (Gunnar Myrdal�s term) counteracts the initial depletion of human and financial resources in the hinterland caused by polarization (or backwash). Growing markets, new technology and friction of distance combine with congestion, pollution and diseconomies of scale in the heartland (urban center) and the amenities of the hinterland, making outlying areas more attractive to development over time. The �push and pull� process of regional development.

26. Circular & Cumulative Growth: Industrialization & Urban Development

27. Impacts of Circular & Cumulative Growth The expansion of a business or industry creates a multiplier effect, leading to more jobs and business as money flows through the economy. This growth increases the likelihood of a new invention or innovation, creating another round of expansion.

29. Survey of Corporate Real Estate Executives Overall Key Location Factors Proximity to customers/clients Access to interstate highway Reasonable real estate costs Availability of skilled workers Pro-business government officials Reasonable wage rates Reasonable/stable utility rates Reasonable cost of living Reasonable business taxes Cultural/recreational facilities

30. Jobs in Gazelle Companies

31. Why Is Are Gazelle Companies Important? The degree to which a metro's economy is composed of new, rapidly growing firms, known as gazelles, is indicative of the degree to which the economy is dynamic and adaptive, which is a key driver of the New Economy. It is not small firms per se that are the key, it is the relatively small number of fast-growing firms of all sizes that account for the lion's share of new jobs created in the 1990s. Between 1994 and 1998, gazelles (which number over 355,000) generated practically as many jobs (10.7 million) as the entire U.S. economy (11.1 million).

32. Regions Where the �Creative Class� Is Likely to be Found

33. Creative Cities

34. Creative Class Ratings for American MSAs

35. Creativity Index Explanation: Overall measure of creative strength and potential, based on a mix of Creative Class percentage,� High-Tech Index, Innovation Index and Gay Index. Explanation: Overall measure of creative strength and potential, based on a mix of Creative Class percentage,� High-Tech Index, Innovation Index and Gay Index.

36. Diversity Index Explanation: Relative concentration of gay couples in a region.� Based on US Census data and used as a proxy for diversity and tolerance. Explanation: Relative concentration of gay couples in a region.� Based on US Census data and used as a proxy for diversity and tolerance.

37. Hi Tech Index Explanation: The Milken Institute's Techpole rating, a balanced measure of size and concentration of a region's high-tech economy (based on dollars of revenue from industry sectors such as computing, electronics and pharmaceuticals, as a share of both US total for those sectors and region's own overall economy.) Explanation: The Milken Institute's Techpole rating, a balanced measure of size and concentration of a region's high-tech economy (based on dollars of revenue from industry sectors such as computing, electronics and pharmaceuticals, as a share of both US total for those sectors and region's own overall economy.)

38. Innovation Index

39. Creativity Index Explanation: Overall measure of creative strength and potential, based on a mix of Creative Class percentage,� High-Tech Index, Innovation Index and Gay Index. Explanation: Overall measure of creative strength and potential, based on a mix of Creative Class percentage,� High-Tech Index, Innovation Index and Gay Index.

43. Key Terms Development Fair trade Foreign direct investment Gender Empowerment Measure (GEM) Gender-related Development Index (GIM) Gross domestic product Human Development Index Literacy rate Primary sector Productivity Secondary sector Structural adjustment program Tertiary sector Value added