Council for Community and Economic Research State Economic Development Expenditures by Program Type (2014)
There are three conceptually distinct approaches in our analysis of the intensity of state economic development policies (supply side, demand side, and minority development) if the states practice coherent development strategies.
- The supply-side policies (Business Finance, Strategic Business Attraction, Domestic Recruitment, Workforce Preparation and Development, Community Assistance, Tourism/Film) each reflect an emphasis on direct cost reduction and administrative passivity.
- The demand-side policies (Business Assistance, International Trade, Technology Transfer, Entrepreneurial Development, and Special Industry, in bold) reflect support for new and/or risky enterprises and ideas and public-private strategic collaboration.
- Minority development. Programs designed to meet a wide variety of small disadvantaged business enterprise needs, especially contracting, business development, and financing.
| Program type | Description | Hypothesized development approach |
| Business Finance | Direct and indirect lending programs designed to address capital access issues. Can encompass funding functions (borrowing, lending, investing) and access to capital for leverage, growth, merger, acquisition, or divestiture of the business. | Supply side |
| Strategic Business Attraction Fund | Allocated at the discretion of the head of the agency to respond quickly to new or unexpected development opportunities. | Supply side |
| Business Assistance | Small business development centers; managerial skill development and strategic counseling; procurement of technical assistance, small business ombudsmen, and related regulatory assistance. | Demand side |
| International Trade | Export promotion, international marketing and recruitment, foreign direct investment assistance, and an array of programs aimed at building stronger economic ties between the state and other parts of the world. | Demand side |
| Domestic Recruitment | Site location assistance including organizing visitation programs, advertising and promotion, and matching the state/community (as a product) with the prospect’s needs. | Supply side |
| Workforce Preparation and Development | Employer or firm-based education, training and recruitment of workers. | Supply side |
| Technology Transfer | Development and adoption of new ideas in a business including process and product improvements, via investments in R&D, technology commercialization, and manufacturing technology updates. | Demand side |
| Entrepreneurial Development | All forms of assistance aimed at enhancing the likelihood that a new firm will survive; targeted at young firms. | Demand side |
| Minority Development | Programs designed to meet a wide variety of small disadvantaged business enterprise needs, especially contracting, business development, and financing. | Not elsewhere classified |
| Community Assistance | General and project-specific infrastructure improvements and grants to local development organizations. | Supply side |
| Tourism/Film | Development of recreation, amenities, and entertainment opportunities along with supporting businesses in tourism industry. | Supply side |
| Special Industry | Developing and promoting new products related to a traditionally important state industry. | Demand side |
| Program Support | Research or dissemination of information on economic development competitors, policies, and best practices, along with resources allocated to the operation and staffing requirements related to the agency director and support office(s). | n/a |
| Administration | Overhead required to support existing programs including information systems, accounting, and human resources. | n/a |
| Other Programs | Otherwise nonspecified functions related to economic development. | n/a |
Source Citation
Caroline Hanley and Michael T. Douglass
High Road, Low Road, or Off Road? Economic Development Strategies in the American States
Economic Development Quarterly
2014, Vol. 28(3) 220 –229
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DOI: 10.1177/0891242414534726
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