TIP defines economic development as the application of public resources to stimulate private investment. In addition to traditional financial incentives, such resources can take the form of land, infrastructure, marketing programs, business outreach, and workforce training. All of these require stable and adequate financial resources, which is a chief concern for most economic developers.
Beyond their own budgets, however, economic developers must also be aware of how non-financial resources affect private investment decisions. Issues concerning the global supply and demand for goods such as water, food, petroleum, labor, and even rare earth metals are influencing where companies are choosing to invest and hire. In recent years, shifting patterns of global consumption, production, distribution, and financing have resulted in dramatic swings of price and availability.
Recent trends impacting resource availability include:
Global Population Growth
Increasing populations can have positive benefits in the realm of cultural achievement, creativity, and the creation of new ideas. The rapid growth rate of human populations, however, is surpassing the availability of goods and services needed to support growing human need. Chronic poverty, food scarcity, and the spread of disease are some of the consequences of overpopulation. For example, global food prices rose to a new high in December 2010, according to the UN’s Food and Agricultural Organization. Its food price index went above the previous record of 2008 that saw prices spark riots in several countries. Egypt, India, and Brazil have all been severely affected by the spike.
The Rise of China and India
The rapid economic growth and industrialization of China and India and the success of development on the standard ‘fossil fuel automobile-based throwaway consumer economy’ offers a unique opportunity to assess its limitations. China’s success, for example, is bringing massive increases in consumption (grain, meat, steel oil, timber). Understanding the role of emerging markets in the global economy is increasingly critical to fully comprehending local economic development realities.
Competing Interests and Conservation
Conservation of (and control over) resources–water, land, and rare earth minerals–are increasingly at the center of conflicts, both local and international. For example, as a result of Atlanta’s rapid growth over the past decade, Georgia, Alabama, and Florida are in a heated dispute about dividing water rights for the next fifty years. The New York Times reports: “The decisions at hand may be the toughest on water that the Southeast has yet had to make, marking an end to an era in which abundant, cheap and barely regulated water has been seen as a kind of natural right in a region blessed by 50 inches of rain a year.” Rare earth metals, which are used to make a wide variety of electronic goods, including mobile phones and flat-screen televisions, are also at the center of are also at the center of geopolitical battles between China and the countries that manufacture high-tech devices.
Energy and Climate Change
Greenhouse gas emissions and global warming have been at the center of critic’s complaints about the rapid industrialization of China and India. China’s coal habit is a classic example of the tension between economic development and environmental preservation. Additionally, the United States has been consuming energy at a fast rate for far longer than China (not to mention per-capita energy use). Developing clean and alternative energy sources will be a critical component of addressing energy needs in the upcoming decades. One immediate and important way to address the consumption challenge is to prevent waste via concerted conservation efforts.
To put energy production and consumption in the United States in perspective, Good Magazine created an interactive infographic. Click on the image to view it online.
For economic developers, these and other trends are presenting new opportunities to attract new private investment. Already, renewable energy and green-tech are two of the most sought after industry sectors nationally and internationally. Growing Asian demand for agricultural commodities and food products is driving new investments in US agricultural production, processing, and distribution. Large multinational corporations such as GE and Hitachi are organizing their business units around “social infrastructure” sectors such as power, transportation, and water circulation systems. TIP Strategies is tracking such developments and looking for ways communities and regions can capitalize on the ongoing global competition for resources.