Last week featured the inaugural meeting of the Brookings-Living Cities State-Metropolitan Prosperity Collaborative, a peer exchange forum intended to promote deeper collaboration between state and metropolitan leaders on issues critical to creating economic opportunity (see this previous blog post for more on the collaborative).
Below are some initial takeaways from the convening, which brought together a select group of economic development leaders from over a dozen states and metropolitan areas around the country to explore the topic of how states and their urban areas can align their efforts to better connect metropolitan areas to the economic opportunities created by global trade, including by harnessing the power of immigrant entrepreneurs and their global networks.
Trade and exports provide a significant avenue for job creation and long-term economic strength for states and their metropolitan areas. In 2010 and 2011, exports generated some 46 percent of the growth of the U.S. economy, and export-related jobs tend to provide higher wages and better benefits than non-export-related jobs.
State-metropolitan collaboration is essential in this work, but not straightforward. At the convening, two states discussed their efforts to work with local actors by creating regional economic development councils, which are designed to help align strategies and resources across levels of government. Cities and metropolitan areas, for their part, have civic infrastructure (e.g., mayors, trade associations, chambers of commerce, local economic development staff) which can be leveraged to amplify the impact of limited and declining state resources. While states are exploring how they can be more intentional in utilizing these assets, the political importance of rural areas in state governments can complicate a metropolitan focus.
State and metropolitan efforts to create economic opportunity by boosting trade are focused primarily on small- and medium-sized enterprises (SMEs). With larger businesses more likely to have their own resources and infrastructure to advance exports to global markets, most of the efforts of governments at the state and metropolitan levels is focused on boosting exports for SMEs.
Better use of data is an important frontier in this work. A growing amount of data is being collected to support states in this effort, but the approaches and systems for making meaning of this data, and for using it to decide how best to help firms export, are still being developed. Some states have made progress in developing these systems, but more work remains to be done.
The limitations of “legacy” systems make it harder for states and metropolitan areas to build economic opportunity through exports. In many of the states represented at the convening, economic development and trade efforts exist in silos sometimes numbering in the dozens. Several states are creating cross-departmental structures and considering more flexible regulations in order to align economic development funding streams to support metropolitan trade and export strategies.
Immigrant entrepreneurs, and the global “diaspora networks” to which they connect, are potential resources to boost trade and economic activity. Immigrant-owned businesses can help overcome the lack of knowledge and relationships in global markets that constitute significant barriers to exporting. Discussions at the convening suggested that there are a handful of places that have more advanced strategies to harness immigrant businesses and exporters, but that in other places efforts are more nascent. To take full advantage of this opportunity, states and metropolitan areas need to figure out how best to support immigrant entrepreneurs, including through specialized structures and strategies.
In all, differentiated strategies are required to leverage these export-related efforts for the benefit of low-income people. For example, an improved linkage to workforce development and education efforts is necessary to ensure that low-income people can access the jobs these strategies create, and in some cases strategies to help small and mid-size firms sell to large exporters may be more effective than strategies to help these firms export themselves.
The network will reconvene in October. In the meantime, we’ll be further exploring the issues above and sharing our learnings with you as they emerge. Stay tuned and share your thoughts and reactions in the comments below.