A moving target: rethinking industrial recruitment in an era of growing economic uncertainty

Abstract

Industrial recruitment is often portrayed by economic development scholars as an inferior or 'second-best' strategy to those that promote 'home-grown' enterprise. But this characterization overlooks improvements to industry recruitment that state and local agencies have adopted in recent decades and the underlying factors that contribute to this effort. Drawing on two case studies of strategic industrial recruitment in the U.S. South, this paper makes the case for industrial recruitment as embedded practice-rooted in placespecific contexts, adaptive and open to change, and governed by a range of institutional actors. The result is both a more strategic approach to local industrial recruitment, and also one designed to complement-not undermine-other local economic development practices.

Global connections from the second-tier: The trade performance of smaller southern US cities

“…The analyses also showed some signs of a problematic relationship between global trade and local economic health, Tables 1 and 4 indicate that export volumes are not related to local economic or population growth. Given these tentative findings, there is a need to reevaluate economic development policies across the region, perhaps arguing for more nuanced and targeted industrial development programs (see Lowe and Freyer, 2015). While the success of some of these small cities may have been surprising, broader economic trends suggest that increased reliance on trade, namely exports, may not be the most effective path forward, in terms of economic development.…”

Incentives and Austerity: How Did the Great Recession Affect Municipal Economic Development Policy?

“…They encouraged and enabled cities to pursue local option sales taxes, raise fees, and increase borrowing. But other administrations, such as in North Carolina, adopted more libertarian stances and tried to rein in local spending on economic development, arguing that direct business assistance distorted markets and allowed government to (ineptly) pick winners and losers (Lowe and Freyer 2015). On the left, a grassroots anti-corporate welfare movement was vindicated by the fiscal crisis as activists had long questioned the intentions and effectiveness of incentives and spending on mega-projects.…”

Striking a Balance: A National Assessment of Economic Development Incentives

“…But there are additional gains to be leveraged when incentive granting is treated as one element of a much larger and more sophisticated strategy of industrial recruitment (Lowe 2014). The focus is not the incentive, per se, but the larger industrial recruitment strategy—more specifically, the selective use of recruitment to build-out existing industrial strengths and the promotion of nonincentive advantages in order to attract, anchor, and retain firms within specialized sectors (Feser and Luger 2003; Goetz, Deller, and Harris 2009; Lowe and Freyer 2015). Strategies of targeted recruitment can also help reduce demand for cash-equivalent incentives by shifting the focus toward other regional advantages that offer greater value to firms as well as their host communities, including access to quality infrastructure, transferable workforce skills, and specialized industry support services or institutions (Bartik 2005, 2018; Lester, Lowe, and Freyer 2014; Schunk and Woodward 2003).…”