As the Election Approaches: Evaluating the Success of Current Federal Policies in Boosting Economic Growth and Shared Prosperity
Written by NGIN CEO and President, M. Yasmina McCarty
In recent years, the United States has faced significant economic challenges, including lagging investment in advanced technologies and infrastructure, stagnant economic growth in Small and Midsized Cities (SMCs), and reduced economic mobility for people of color and individuals in rural communities. To address these issues, the Federal government undertook the single largest national investment in American economic competitiveness and innovation. Programs such as Build Back Better, CHIPS, NSF Engines, and Tech Hubs have been pivotal in this transformation, by scaling up high-tech industries, such as robotics, biotechnology, and advanced manufacturing, across cities and regions nationwide.
As a result of these programs, there has been unprecedented job creation and hundreds of billions of dollars of private sector investment unlocked for the innovation economy. This surge in economic activity not only enhanced America's competitive edge but also marks a significant stride toward a more resilient and inclusive economy, as equity was prioritized in these investments.
As election day approaches, it is essential to consider how this election will shape the future of our economy. Democratic Nominee Kamala Harris has proposed an "Opportunity Economy," increasing support for small businesses, expanding home ownership, and continued Federal investments in innovation sectors to advance American economic competitiveness, while her opponent, Donald Trump’s economic proposal has focused on tariffs, tax cuts and reduced regulations.
It's crucial to reflect on what has worked well in recent Federal policies to deliver high macroeconomic GDP growth while creating shared prosperity in our cities and towns. As CEO of New Growth Innovation Network (NGIN), I have distilled the following 5 insights from our work supporting cities and regions in implementing equitable economic strategies:
Equity in Focus
Equity was prioritized in Federal economic investments, placing a focus on Americans who faced economic marginalization, due to their gender, race, faith, disability, Tribe or geography, including rural and persistent poverty counties.
Or said another way, when Federal dollars were deployed, economic strategies were obligated to deliver results for all Americans. Place-based economic development investments should maintain this dual focus of national economic competitiveness and equity. Investing in high-poverty counties and disinvested communities reduces inequality in place, increases regional competitiveness, and leads to long-term economic resilience. It also ensures the US remains economically competitive on the global stage, by tackling structural inequality which hampers GDP growth.
2. Say Goodbye to Tired Economic Models
The underwhelming short-term incentive-based job creation models are finally being displaced by inclusive economic development. Inclusive economic development is an asset-led regional economic strategy which produces growth and ensures economically disenfranchised individuals and communities lead, shape and benefit from that economic growth.
Regions are embracing high-tech sectors to drive growth, while also investing in the diverse business owners and diverse talent in their regions. Grow Blue is building Rhode Island’s blue economy (defense, marine trades, fisheries, offshore wind, etc.) with community partnerships that emphasize economic opportunities for historically marginalized populations especially Black, Hispanic, immigrant, justice-involved communities, and women. West Texas Aerospace and Defense Manufacturing invested more funds into training than many of their peer programs, supporting students from underrepresented or marginalized background, to strengthen the U.S. aerospace and defense manufacturing capabilities. Finally, Syracuse has a community engagement committee and community investment fund, so that leaders in Syracuse can build and invest in the people and assets that already exist in the community, alongside Micron Technology’s new multi-billion-dollar semiconductor investment in New York.
3. Local Knows Best
Federal economic programs deployed over the past three years respected local expertise and authority. It was local communities who decided what industry to prioritize, what cluster strategy to implement, what partnerships to develop, who to include in their ‘economic region’, what type of jobs to create, what investors to attract and how to define and measure equity. The Federal government built a rationale for National investment in local economic development, and then got out of the way. Future Federal economic programs should follow suit.
4. Build Bold Coalitions and Partnerships
To secure competitive funding, regions formed unique and bold coalitions to stand out from the crowd. As a result, today’s regional economic strategies are held by cross-sector coalitions of economic development organizations, workforce organizations, community organizations, grassroots organizations, universities, and businesses. Future funding policies should maintain and invest in these cross-sector partnerships, as they demonstrably produce better outcomes for US regions.
5. Data and Metrics Matter
The traditional yardstick of economic progress—job creation and GDP growth—measures only a sliver of economic wellbeing in a community. City and regional leaders have sharpened their tools to better measure economic opportunity for their residents.
For example, the City of Tacoma created an equity index, a data-driven tool to see where policies and programs have the largest impact on addressing inequity and where investment can provide the biggest improvement in factors that impact life outcomes. The Greater Topeka Partnership supports the enhancement of economic development and quality of life in Topeka & Shawnee County through Momentum 2022 and Momentum 2027, with the first plan resulting in a 40% decrease in poverty and a 24% increase in average household income. Comprehensive economic metrics should underpin future Federal investments.
Bi-partisan legislation in 2021 and 2022 invested in long-term American economic prosperity, with place-based economic strategies which advanced American competitiveness, national security, and equity. These successes can be embedded in future Federal economic programs as well as standing Federal economic development appropriations to advance inclusive economies nationwide. Inclusive economic development produces macroeconomic growth and builds shared prosperity for each and every American.
The author of this piece is M. Yasmina McCarty, CEO and President of New Growth Innovation Network, a non-profit organization serving more than 100 US cities and implementing inclusive economic development programs across the US.
NGIN is a non-partisan non-profit organization and does not endorse any candidate or advocate for legislation. The views expressed are those of the author and not the organization nor its funders.
