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Tackling the Budget Cut Challenge: Sparking Job Creation in Local Communities

As leaders debate the job creation proposal that President Obama presented to Congress on September 8, one important area to consider – regardless of where one might stand on tax cuts or spending programs – is how to best integrate the range of potential job-growth tools on the ground in communities for maximum local job impact.

Last week, I recalled analysis done in 2008 by the CGI Initiative in partnership with Dr. Les Salamon of Johns Hopkins University. Dr. Salamon highlighted multiple tools of government that leaders can consider as a means of sparking job growth. He emphasized the value of closing what he called the “integration gap” – that is, purposefully managing the collective use of tax cuts, job skills training programs, infrastructure investments and other chosen tools of government to achieve a bigger impact together than any one single tool could accomplish on its own.

One example of how this can work successfully was highlighted in another piece of CGI Initiative research: “Creating Jobs in America: Case Studies in Local Economic Development,” by Dr. Darrene L. Hackler of George Mason University.

In her research, Hackler documented four case studies that demonstrate how four diverse U.S. communities addressed the challenge of creating and promoting local job growth. These case studies – Russell County, Virginia; Northeast Pennsylvania; Williamson County, Tennessee; and Ann Arbor, Michigan – draw a map of how to develop infrastructure and a workforce in rural and smaller metropolitan areas in the United States to cultivate innovative industries and jobs.

The case studies yielded 10 policy recommendations to public officials across federal, state, and local governments to help them accelerate economic development in rural and metropolitan America. Key themes of Dr. Hackler’s recommendations were collaboration and integration: to increase the impact of job growth programs by supporting coordination of resources across federal government, states, localities, academia and industry.

For example, ideas Dr. Hackler recommended include:

• For Federal Government Leaders:

- Work closely with state and local governments to develop new approaches to human capital development and innovation.

- Fund technical assistance for local economic development strategies.

- Link workforce and economic development efforts.

- Create a collaborative exchange between education and industry.

• For State Government Leaders:

- Encourage regional collaboration.

- Create a single point of contact for economic development.

- Provide public venture funding.

• For Local Government Leaders:

- Focus on regional collaboration

- Consider the creation of public-private economic development organizations

- Plan for the future of their region

By placing an emphasis on integration and coordination of resources at the local level, federal, state, and civic leaders can optimize the results they get from whichever investments they choose to make in economic growth tools, thus sparking creation of high-wage jobs in information technology, life sciences, and other areas in communities that need them most.

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