10 Principles in Economic Competitiveness

Equity

• How do you address disparities among areas within your state or region?
• To what extent do you address the problems of the economically disadvantaged in your area?
• How do you improve the productivity or long-term economic viability of disadvantaged areas or populations?

Communities need to be concerned about the distribution of economic benefits. Economic development efforts should be focused on improving the productive capacity of those areas and populations that are most disadvantaged and in need of assistance.

Underlying most economic efforts is the desire to help distressed economic areas, such as rural communities that have suffered from the loss of agricultural and resource-based jobs, or to help populations that are unemployed or underemployed, such as African American males in urban areas. Economic development funds are frequently targeted to areas or groups of people who are economically disadvantaged or suffering from the results of economic change. For example, the programs of the Economic Development Administration are targeted to chronically distressed regions, which are largely rural areas, and urban areas suffering from the effects of defense cutbacks and other economic dislocations. State initiatives in several states emphasize rural development and encourage economic and community development in urban centers that have suffered most from economic changes.

Increasingly, public officials and citizens have looked to economic development as a solution to ensure that benefits of economic activity are shared equitably. Yet economic development professionals are wary of just how much they can contribute in this area. In our pilot tests of these ten emerging principles with state and regional development groups, the principle of equity generated the most disagreement. Some economic development officials felt it was totally inappropriate to have a goal of equity in an economic development strategy. Others applauded the inclusion of equity as a principle and felt that it is too frequently overlooked in setting priorities for economic development.

Economist Timothy Bartik argues that one way economic development programs can increase productivity is by reducing unemployment in high unemployment areas. The question is how to do this and whether public economic development policies can make a difference. It is important to make the equity goals of an economic development strategy explicit and evaluate the success of strategies to address economically disadvantaged areas or populations.

An example of an organization that applies the principle of equity in its economic development efforts is Maine's Coastal Enterprises, Inc. Since 1977, Coastal Enterprises, a private, nonprofit community development corporation, has directed economic and human resources to help Maine residents with low incomes reach an adequate and equitable standard of living, working, and learning. The organization draws on public and private resources to provide financial and technical assistance for business development, housing, and social services; to support innovative projects that address the needs of individuals, families, and communities; to create social and economic opportunities for individuals and families at risk of poverty; and to engage in research and policy development.

The Minnesota-based McKnight Foundation established six regional initiative funds in the mid-1980s to stimulate development in economically distressed rural areas of Minnesota. Recently, the foundation also started an urban initiative fund to encourage development in distressed urban areas.