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The Humphrey School of Public Affairs is the University of Minnesota's school of policy and planning.


State and Local Policy Program

10 Principles in Economic Development

Comprehensive Strategy

  • Do you have a comprehensive economic strategy for your state or region?
  • Do you have specific goals and action plans for each of the areas that affect your economic foundations work force, physical infrastructure, natural resources, knowledge and technology, enterprise development, fiscal stability, and quality of life?
  • To what degree are these efforts in alignment?

Issues of education, housing, health care, transportation, and general quality of life have important contributions to make to the economic health of an area. The connection between community development and economic development cannot be ignored in an era when many of the issues of social welfare ultimately come to rest on the shoulders of economic opportunity. Infrastructure now means human as well as physical capital. We are growing increasingly aware of the systems and interrelationships that link our activities rather than divide them into separate corners.

In 1986, the Committee for Economic Development (CED) issued a report entitled Leadership for Dynamic State Economies. The report changed the way many economic development professionals thought about their job by recommending that state policymakers consider all aspects of public policy in designing a state economic strategy. The report suggests seven areas that affect a state's economic foundations work force, physical infrastructure, natural resources, knowledge and technology, enterprise development, fiscal stability, and quality of life and recommends that states conduct a diagnosis of their strengths and weaknesses, develop a vision, and implement an action plan taking into account these seven foundations.

Economic foundations

1. A CAPABLE AND MOTIVATED WORK FORCE that is well educated and supported by a human resource system that facilitates and assists in finding employment.

2. SOUND PHYSICAL INFRASTRUCTURE, including transportation, communications, energy, supply and waste management.

3. WELL-MANAGED NATURAL RESOURCES for current and future use and development.

4. UNIVERSITIES AND OTHER RESEARCH AND DEVELOPMENT INSTITUTIONS that are involved in the development, dissemination and market application of knowledge and technology.

5. A SYSTEM OF REGULATION, CAPITAL, AND TECHNICAL ASSISTANCE that encourages enterprise development.

6. A QUALITY OF LIFE that is attractive to employees and their families.

7. FISCAL STABILITY characterized by reasonable tax rates and prudent spending policy.

* Committee for Economic Development, Leadership for Dynamic State Economies (New York: Committee for Economic Development, 1986).

The comprehensive approach recommended in the CED report allows states to get out of the narrow box of traditional economic development incentive programs and take a broader-based approach to making investments to increase economic competitiveness.

Several states have undertaken comprehensive assessments of their economic competitiveness as a basis for their economic strategies. The Massachusetts strategy report referred to earlier is a good example. The state action plan covers areas of taxes, regulations, and government-affected business costs, as well as transportation and communications infrastructure, work force education and training, and university and research sector innovations. This more comprehensive approach to economic development is also reflected in the economic development strategies of Oregon, Indiana, and Minnesota, among other states.