Title: Federalist Industrial Policy: State and Federal Governmental Efforts at Industrial Modernization in the 1980s
Abstract: Over the last two decades state economic development programs have proliferated [14]. Prior to the late 1970s, most state economic development policy makers practiced a traditional approach that presumed that new investment flows to areas with the lowest costs. Consequently, state governments should maintain low factor costs and offer incentive packages. In the early 1980s, many states reconsidered their approaches under the pressures of economic recession, international competition and cut-backs in federal aid to states. Policy reformers no longer emphasized the supply side of the economic development equation. Rather, they looked to the demand side, attempting to identify, anticipate and even help create markets on which private producers could capitalize. These entrepreneurial states' policies presumed that regional economic growth depended on home-based firms, usually smaller and start-up companies, and that competitive advantage could be established by upgrading factors of production, even if this drove up business costs [5; 25]. Policies to revitalize older industries called attention to technology and to the needs of small and medium-size enterprises (SMEs). Here the new policy advocates emphasized the need to modernize existing enterprises through industrial extension services that would assure that small firms (usually defined as with fewer than 100 employees) had access to the best existing business practices, technologies and worker training. To accomplish this end, the industrial extension service would both draw on established state institutions, (such as small business development centers [SBDCs], the community college system and public universities) and create new centers for transferring proven, off-the-shelf technologies. Together these public institutions would link forces to form a network that small firms could access to help identify their deficiencies and find ways for correcting them [27]. During the 1980s this emphasis on assisting smaller firms through an industrial extension service and through programs that linked business to the
Publication Year: 1994
Publication Date: 1994-01-01
Language: en
Type: article
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