The Search for Infrastructure-Driven Transformation
December 5, 2010 Leave a comment
The challenge facing state and local government today is not merely to spend money on infrastructure, but to spend that money in a way that will foster economic development. Economic development leaders often approach this in a one-off way — an off-ramp, rail spur or property that benefits a business they’re trying to attract. Such an approach may help a specific business, and in turn, help the community. But it’s not likely to lead to transformative economic development efforts. Transformative efforts are usually systemwide, and they generally do one of three things:
Make it easier to move goods and people, as the Erie Canal, Transcontinental Railroad and interstate highway system did.
Make it easier to move information vital to commerce. Think of the telegraph, telephone and Internet.
Radically reduce the cost of doing business — or alternatively, greatly increase the capacity to do business. The introduction of electricity as well as the Internet served both of these purposes.
The point (read the whole thing) is that many local and Federal infrastructure improvements are inefficient and targeted at the wrong things – or rather, targeted at the politically well connected and not that which will create the best return on investment. We also prop up dying 19th and 20th century industries with bail outs and infrastructure “economic stimulus” – while shipping our 21st century industries to India and China.