Invisible Factors in Local Economic Development

While national trends shape the general economic context for growth, industrial performance also depends critically on conditions particular to local areas. This book develops the idea that the interaction between business strategies and local economic environments has a substantial influence on the success or failure of local mature industries. Arguing that the poor performance of local economic development policies--measured by their ability to stimulate investment, create jobs, and expand the tax base--can be improved through a better understanding of this interaction, the authors stress the importance of identifying and promoting "invisible factors," such as worker attitudes and small-scale entrepreneurship, in development strategies for mature industries. They document their findings through statistical models and micro-studies in a local economy they use as a case--the Montachusett region of central Massaschusetts--and argue that it is better to replace traditional policies of tax breaks and subsidies to business with a comprehensive local growth strategy targeted at specific firms that can take advantage of the invisible factors in economic development.