Seizing the moment for place-based economic policy

As federal policymakers seek to strengthen national competitiveness in key strategic sectors and technologies, they are increasingly recognizing that locally led solutions are a critical path for spurring technology-led growth, mitigating climate change, strengthening national security, and addressi...

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Bibliographic Details
Published in:Policy File 2024
Main Authors: Parilla, Joseph, Haskins, Glencora, Muro, Mark
Format: Report
Language:English
Subjects:
Economic policy
Inequality
Technology
Online Access:Request full text
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Summary:As federal policymakers seek to strengthen national competitiveness in key strategic sectors and technologies, they are increasingly recognizing that locally led solutions are a critical path for spurring technology-led growth, mitigating climate change, strengthening national security, and addressing economic, racial, and geographic inequities. This is the central premise of place-based economic policies like the $1 billion Build Back Better Regional Challenge (BBBRC)—a challenge grant administered by the Economic Development Administration (EDA) in the U.S. Department of Commerce. As the EDA’s signature American Rescue Plan Act (ARPA) recovery program, the BBBRC awarded between $25 million and $65 million each to 21 competitively selected regions. Over a period of up to five years, these investments will support the local development of nationally critical industries and technologies in ways that deliver economic opportunity to traditionally underserved people and communities. Drawing on prior evidence and experience on what works in regional economic development, the BBBRC posited that catalytic public money, a focused cluster growth strategy, and a coordinated set of interventions are necessary to offer local economies—especially in lagging regions—the best chance for inclusive growth. In these ways, the BBBRC represents a new development in federal place-based economic policy—a theory of policymaking that seeks to benefit people and economies by targeting explicit geographies. It is an important policy experiment with a variety of important stakes and stakeholders, and thus represents a critical test and learning moment for a wide range of regional, state, and federal leaders.