| | Remarks of Assistant Secretary of Commerce for Economic Development David A. Sampson - National Association of Counties Annual Legislative Conference Saturday, March 2, 2002 | Back |
| Good morning. Thank you Commissioner Simmons for your kind and gracious introduction. I'm grateful for the opportunity to speak to you today. I also appreciate the invitation from the National Association of Counties to participate in this important conference. As the only national organization representing county governments, NACO serves as an important partner to EDA as we strive to better serve you, its membership. The Bush Administration's Commerce Department, under the leadership of Secretary Don Evans, has as its mission, enhancing community success in attracting private capital investment and the higher-skill, higher-paying jobs that are created by that investment.
As you may have heard recently, there have been some encouraging signs emerging from both the private and public sectors regarding the economic recovery. U.S. manufacturing activity rose for the first time in 18 months while consumer spending and construction grew solidly, fresh signs that an economy shaken by the recession and the terrorist attacks is on the road to recovery.
Federal Reserve Chairman Alan Greenspan provided a cautiously upbeat economic assessment to Congress on Wednesday. His message: The country is on the mend, but some health risks still remain.
Last week, the Commerce Department reported:- The economy grew 1.4% last quarter (October - June) thanks to surprisingly strong consumer spending on automobiles and other products.
- Incomes, Spending Up - Incomes - including wages, interest and government benefits - increased 0.4 percent in January. Consumer spending up 0.4 percent for the month.
- Construction Spending Rises - Rose 1.5 percent to $876.7 billion in January, the fastest rate of increase in a year. Spending on new factories and other industrial buildings was up 2.6 percent. Spending on public construction rose 3.7 percent, with money going to new schools and highway projects.
- Manufacturing Activity Increases - The Institute for Supply Management reported today that its index of business activity rose from 49.9 to 54.7 in February - the first increase in 1-½ years. An index above 560 signifies expansion.
Unfortunately, modest improvements in economic indicators mean little to Americans who are out of work. Since the President proposed stimulus legislation in October over a million people have lost their jobs. The President's plan for economic security - stimulus, energy, and trade legislation - will create more, better jobs so Americans who want to work, can. President Bush is "Working for America," providing the leadership to spur economic growth and job creation. It is my hope that Congress will also show leadership in this regard, stop the bickering, and turn the corner towards creating more jobs for Americans - who expect and deserve nothing less.
Helping to create a climate among our nation's counties in which those new jobs can be created in EDA's major goal.
EDA MISSION
The mission of EDA is to help our partners across the nation (states, regions, & communities) create wealth and minimize poverty by promoting a favorable business environment to attract private capital investment and jobs through world-class capacity-building, planning, infrastructure, research grants and strategic initiatives.
EDA FOCUS
Sound research-based, market-driven economic development policy is the foundation for effective and efficient economic development program implementation. EDA will embrace an economic development strategy based on enhancing regional competitiveness, fostering innovation, increasing productivity and developing industry clusters. The Department of Commerce and EDA will advance this economic development strategy model, not because it is a republican model (it has in fact received broad bi-partisan acceptance across all regions of the country, at all levels of government), but because it is based on extensive research and understanding of how regions can build long-term economic success. At the end of the day, the true test for economic development is not ideological purity, but results, in the form of enhanced long-term economic opportunity.
Need, or economic distress, qualifies a community for consideration for EDA investment assistance. However, as the need for assistance vastly outstrips resources, EDA will apply these guidelines to enable investment decisions that will generate lasting long-term economic growth.
EDA will continue to target resources in economically distressed communities. To achieve the highest return on the taxpayers' investment; however, EDA will stress investments that drive economic growth.
In 2002, priority will be given to proposals that:- Enhance regional competitiveness and support long-term development of the regional economy. In healthy regions competitiveness and innovation are concentrated in clusters or groups of inter-related firms and industries in which regions specialize. The nation's ability to produce high-value added products and services that support high-wage jobs depends on the creation and strengthening of these regional hubs of competitiveness and innovation. Some examples are as follows:
- Upgrade core business infrastructure including transportation, communications and specialized training program infrastructure.
- Reflect and implement a regional strategy that involves all stakeholders and:
- Supports regional benchmarking initiatives;
- Encourages institutional collaboration;
- Reflects strong leadership commitment; and
- Encourages a formalized structure to maintain consensus.
- Encourage cluster development.
In addition, for 2002, priority will be given to proposals that:- Help communities plan and implement economic adjustment strategies in response to sudden and severe economic dislocations.
- Support technology-led economic development and reflect the important role of linking universities and industry and technology transfers.
- Advance community and faith-based social entrepreneurship in redevelopment strategies for areas of chronic economic distress.
Investment Policy Guidelines
Successful investment proposals will meet or exceed the following Investment Policy Guidelines.
1. The proposed investments are market-based. The investment should capitalize on the community's unique regional assets and strengths to build comparative advantages for future business investment.
2. The proposed investments are proactive in nature and scope. The investment should support and advance innovation and increased productivity. It should enhance a community's success in achieving a high and rising standard of living.
Prosperity depends upon the productivity with which the U.S. economy uses labor and capital to produce goods and services. Productivity rises because of innovation. Moreover, sustained economic growth will require continued innovation at all levels of the U.S. economy, especially as we enter a new era when the workforce will be increasing more slowly.
3. The proposed investments look beyond the immediate economic horizon, anticipate economic changes, and diversify the local and regional economy. The investment should be part of an overarching, long-term regional strategy that includes expanding existing industry clusters and developing emerging, new clusters. Investments should create the conditions for sustained productivity.
4. The proposed investments maximize the attraction of private sector investment and would not otherwise come to fruition absent EDA's investment. EDA should serve as a unique public sector source of "venture capital" to assist distressed communities that otherwise would be at a distinct competitive disadvantage in attracting the higher levels of private capital investment in facilities and equipment that drives the creation of higher-skill, higher-wage jobs.
5. The proposed investments have a high probability of success.- The investment should have a high level of local, state, and private matching funds. EDA funds are limited and should be highly leveraged with matching funds to the greatest extent possible. A larger local, private match indicates a higher level of commitment to successful completion by the public sector and higher market-based credibility by the private sector.
- High degree of commitment of local political "capital" by elected officials. Local officials' support should not be "pro forma" but should reflect their willingness to champion the cause. Shared vision on the part of local elected officials significantly enhances a sustained economic development strategy.
- Significant commitment of human resources talent to ensure achievement of project outcomes. Strong leadership is a necessary part of any successful economic development strategy, initiative, or investment.
6. The proposed investments result in an environment where higher-skill, higher- wage jobs are created. While wages should be evaluated in comparison to region's average wages and skills, the jobs created or retained as a result of EDA's investments should be higher than the average wage and skill level for the community. The goal of economic development is to achieve a high and rising standard of living.
7. The proposed investments maximize Return on Taxpayer Investment. EDA investment should do more than merely preserve the taxpayers' dollars. Investments should generate a return for the taxpayer by attracting private capital investment and high wage jobs that promote regional prosperity through the consumer demand they create. Successful economic development investments promote economic self-sufficiency; provide the resources for building safe, healthy, and attractive communities; and minimize poverty.
CONCLUSION
The mission of EDA is to enhance community success in attracting private capital investment and higher-skill, higher-wage jobs through building a better economic climate.
In fulfilling that mission we must grasp, advance and support the dissemination of a meaningful market-based economic development strategy with a proven track record to build long-term economic prosperity. From a program and implementation perspective, in an era of extreme financial constraints we must seek out, and invest in, those economic development initiatives that are consistent with the best thinking and best practices of economic development in the 21st century.
EDA Investments should:- Focus on regional economies in transition (EDA's market niche);
- Focus on opportunities that are economic drivers (Locomotives, not cabooses);
- Focus on trade and resource-based industries or clusters, which compete beyond local markets and across regional boundaries;
- Include value-added processes;
- Focus on rational, comprehensive strategies developed by key economic stakeholders.
I am committed to working with you to fulfill President Bush's mandate, that no geographic area or demographic sector is left behind when it comes to participating in the American dream.
Thank you. |
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