| | Remarks of David A. Sampson, U.S. Assistant Secretary of Commerce for Economic Development - EDA Philadelphia Region Economic Development Conference Tuesday, April 2, 2002 | Back |
| Good morning.
Thank you Steve (Nesmith) for the kind introduction. It's a pleasure to be with you today. As you heard, Steve is from this city, and I can assure you that the City of Philadelphia is well represented in Washington. Steve is one of the reasons EDA's reputation is gaining a higher regard, both on the Hill where Steve represents the legislative interests of EDA, and among important agencies such as OMB and the GAO.
It's a pleasure to be with you today. I see that Phil Singerman is here this morning. As you all know, Dr. Singerman precedes me as Assistant Secretary of Commerce for Economic Development. I have enjoyed meeting with him and getting to know him since joining the Administration. Dr. Singerman, I appreciate the insights you have shared and the assistance you have given as I settled in. It is also my pleasure to serve on this opening session with Jim Cuorato and Peter Longstreth.
The mission of the Economic Development Administration is to help our partners across the nation create wealth and minimize poverty by promoting a favorable business environment to attract private capital investments and create higher-skill, higher-wage jobs. I want to thank you all for your outstanding support of EDA and our mission. It is through your efforts that we will are achieving our vision. We rely on you to be our partners who create the local and regional strategies that identify the kinds of potential investments in which we can invest our resources.
I am pleased to report that here in the Philadelphia region, you are already responding to our call to be more market based. Paul Raetsch has informed me that since I assumed the leadership of EDA in August 2001, this region has invested $81 million with 66 awards. The EDA funds have been matched with $81 million of local or state funds. These public funds are leveraging over $1 billion in private sector investment, will create 15,000 jobs and retain 9,000 other jobs. Just a month ago we approved an investment to help continue the conversion of Pease AFB in New Hampshire into a highly successful economic asset. Our assistance will lead to $30 million private investment and 850 new jobs. Here in Philadelphia, one investment will help create 2,700 new jobs. A small EDA investment in Caribou Maine will enable a company to invest $150 million in new plant and equipment creating 225 jobs in one of the most rural areas in this region. This conference will highlight our investment guidelines and offer a great opportunity to hear success stories and discuss innovative strategies.
As you may have heard recently, there are very encouraging signs emerging from both the private and public sectors regarding the economic recovery. Ken Goldstein, the Conference Board chief economist, said recently "The U.S. economy has quickly turned from recession and is now firmly in recovery."
As you may have heard, Construction Spending Hit a One-Year High In February. The Commerce Department reported yesterday that construction spending increased 1.1 percent in February, nearly double the expert forecasts. The 1.1 percent figure is the highest increase in a year.
Spending on single-family homes went up 3.1 percent in February, while commercial construction spending declined by 3 percent. Residential spending overall rose 3.5 percent.
Manufacturing Activity was also Up In March. The Institute for Supply Management released its index of business activity yesterday morning, which charts an increase to 55.6 in March from 54.7 percent in February. Experts had been predicting a slight retreat from the February number. Any number above 50 indicates an expansion in the manufacturing sector. All of these are fresh signs that an economy shaken by recession and terrorist attacks is on the road to recovery.
Federal Reserve Chairman Alan Greenspan is more upbeat than he's been in many months. Many of the Fed's member banks report that economic conditions are improving in their areas, after months of decline.
It would seem that spring is just around the corner ... that the country is on the mend. I know that's the message Secretary Evans is receiving as he talks to business executives around the country. That is good news for Americans and the global economy.
But economic risks remain. Ken Goldstein also said "But the road ahead is far from smooth, with sluggish profits and weak export demand restraining growth."
One million American jobs were lost last year. That's causing an awful lot of pain, to be sure. That's why President Bush pushed so hard to get an economic stimulus package through the Congress earlier this month. It clearly did not include all that the President thought was needed to help get this economy back on their feet. But it did include additional benefits for the unemployed. And it did include some $40 billion in tax relief for capital investment. All this should help.
There's more the President wants to do for America's economic security. President Bush is providing the leadership to spur economic growth and job creation. The President recently said, "The role of government is to create conditions in which jobs are created, in which people can find work." EDA is a critical tool in accomplishing this mandate. In order to do this we will transform EDA into an effective and efficient, results oriented economic development agency. We will "leave no geographic area or demographic sector behind."
Work is the strong backbone of our economy. Work creates wealth, maintains our freedoms and provides opportunity. But work does more: it gives people dignity, security, and peace of mind for themselves and for their loved ones.
We are "Working for America: a great country that stands for so many values: inclusion, freedom, ingenuity and innovation, entrepreneurship, opportunity for all, care for the environment, and compassion for those affected by forces beyond their control. At EDA, we will do our part in keeping all of America working toward that uniquely American dream.
Our strategy to help Americans accomplish this dream lies in our 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.
Need, or economic distress, qualifies a community for consideration for EDA investment assistance. However, as the need for assistance vastly outstrips resources, EDA has established clear funding priorities and investment policy 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 just a few moments you will hear from Jim Gollub, who will discuss cluster based economic development in detail. He will lead a workshop this afternoon.
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.
We will also work to forward the President's economic security policies. As Secretary Evans said on recently in a speech before the Broadband Technology Expo, "Over the next ten years, broadband is expected to add half a trillion dollars to the economy. And building the national broadband network will create over 1 million new jobs."
As we know, high-tech companies are the backbone of the American economy in terms of jobs and growth. In this regard, President Bush wants to make high-speed access to the Internet available to all Americans and American businesses.
EDA has a proud history of helping communities put in place the broadband infrastructure they need to compete. We will continue to work to afford every community and business in the Nation access to broadband.
EDA will also continue to play an important role in brownfield redevelopment. In testimony delivered before the Senate Environment and Public Works Committee recently, I reiterated the importance of EDA's important partnership with the Environmental Protection Agency and our established record of working with local stakeholders to redevelop and reuse brownfields - Dr. Singerman, I know how badly you must miss having to testify before the Senate!
EDA has a long-standing role in supporting the economic redevelopment of abandoned, idled, and contaminated commercial and industrial sites. Since 1997, EDA has invested over a quarter of a billion dollars in more than 250 brownfield redevelopment projects. Last year alone, EDA invested $55 million in 58 brownfield projects.
The President has announced that his FY 2003 budget will double the funds available through EPA in FY 2002 from 98 million dollars to 200 million dollars - to help states and communities around the country clean up and revitalize brownfield sites.
Since need will always exceed EDA's resources, it is important to have some objective criteria for making decisions on what we fund and decline. Organizational excellence is built on the ability to differentiate. As many of you know, the President recently traveled to Monterey, Mexico, to attend a global forum concerning aid to developing nations. The President announced a sizeable increase in funding to developing and vulnerable nations, good news for the many governments and NGOs that will be responsible for making sure the funds are spent in a wise and thoughtful manner. To that end, President Bush said "The success of development aid was measured in resources spent, not the results achieved…we must accept a higher, more difficult, more promising call." While international aid goals may be somewhat different than our domestic challenges, EDA will use the same benchmark when considering future investments - specifically, can the results be measured, can the outcomes and deliverables be showcased as efficient investments of the taxpayer's money.
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 regions' 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. By helping our citizens develop their job skills, we will foster productive careers in the private sector rather than dead end jobs.
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 all of you to help 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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