Transcript Slide 1

Economic Development:
Global Scholars Forum
Judith I. Stallmann, Professor
Agricultural Economics, Rural Sociology, and Public Affairs
Community Development Extension Specialist
April 12, 2006
Constitution and Economics
Korea
United States
• Coin money
• Foreign trade
• Interstate commerce
• Taxing power
– No export taxes
Basis of law
• If not specifically allowed by the law, it is
prohibited.
– For an economy, results in rigidity
• If not specifically prohibited by the law, it is
allowed.
– For an economy, allows flexibility
• Which do you have?
Local power
• Korea
United States
• Decentralized
• Overlaying local
jurisdictions
– General purpose
governments with
taxing and ordinance
authority
– Single purpose
governments with
taxing and
implementation
authority
Overlaying local governments
Single purpose governments
School
district S
c
Hospital h
district o
o
l
Water
district
Multi-purpose governments
County
Town
Budget of General Government
Local government
Structure of decentralized and overlaying
local governments:
• Local governments have a lot of power
• Means need to collaborate and cooperate
• Means that they also compete
– Often choose to compete on incentives and low
taxes
– Could compete on well-run government, quality
of workforce, quality of life, business climate
Economic development
• National government determined
• Market determines
• Market with government policies and
incentives
– National government
– Local government
Level for economic development?
• At the level of the majority of costs and
benefits
– Some projects have national importance
• National government giving incentives
makes little economic sense unless it has
an explicit regional policy
16 Jeju-do
6 Gwangju
10 000
12 Jeollanam-do
13 Jeollabuk-do
5 Busan
11 Chungcheongnam-do
4 Ulsan
3 Daegu
10 Chungcheongbuk-do
15 Gyeongsangbuk-do
7 Daejeon
14 Gyeongsangnam-do
9 Gangwon-do
2 Incheon
8 Gyeonggi-do
1 Seoul
Persons (thousands)
South Korea population by cities and provinces, 2000
12 000
Cities
Provinces
8 000
6 000
4 000
2 000
0
Collaboration and cooperation
•
•
•
•
Between governments
With businesses
With citizens
With non-profit agencies
Citizen participation
Formal:
• Elections
• In some jurisdictions citizens can petition to
put issues on the ballot
• Some laws require citizen input
– Oversight commissions
– Public hearings
Informal
• Local government may ask for citizen input
• Citizens take an idea to local government
How to get citizens to participate
•
•
•
•
Ask citizens for their ideas
Work to make sure all groups are involved
Meet where citizens are comfortable
Have a history of using citizen input
– Don’t ignore the ideas that you asked for
Economic development ideas
• All economic development requires a mix
• A concentration only on manufacturing and large
scale infrastructure may not fit the current global
economy
• Also may not fit the current national economy
• Services (or tertiary) include a lot of business
services that are very important
– Original idea was that services just served the local
population—still true for some services, but not all
– What you call things influences how they are viewed
South Korean employment by economic sector,
1963-2000
16 000
Agriculture, forestry & fishing
Mining & manufacuring
S.o.c. & other service
12 000
10 000
8 000
6 000
4 000
2 000
Year
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1969
1967
1965
0
1963
Employed persons (thousands)
14 000
South Korean employed persons by occupation,
1963-1993
8 000
Official
Sales wokers
Service workers
Agri.,forestry,fishing workers
Production,transport,labor
Professional, techinical, andministrative
6 000
5 000
4 000
3 000
2 000
1 000
Year
31
29
27
25
23
21
19
17
15
13
11
9
7
5
3
0
1
Employed persons (thousands)
7 000
Occupations: 1993-2000
9000
8000
Employed persons (1000s)
7000
Legislators, officials & mangers
Professionals & technicians
Craft, trade, machine operators, elementary occupations
Agri, forestry, fishing
Clerks
Service, shop and market workers
6000
5000
4000
3000
2000
1000
0
1993
1994
1995
1996
1997
1998
1999
2000
Social overhead capital
and other services
•
•
•
•
•
•
•
•
•
•
•
•
•
Electric power, gas & water supply
Construction
Wholesales & retail trade, consumer goods
Restaurants & hotels
Transportation, storage, communication
Finance & insurance
Real estate rent & business service
Public administration, defense, social security
Education service
Health & social welfare
Other public society, personal service
House-keeping service
International & other foreign institution
Manufacturing
Economic development options
• Clusters
• Information technology can be broken into
steps
• The creative class
– Talent and technology needed, but not enough
– Tolerance for new ideas and new ways of
thinking leads to:
• Innovation and entrepreneurship in the private,
public and non-profit sectors
• New ideas often come from outside the mainstream
Thousands
South Korea graduates by school level, 1965-2005
1 200
1 000
600
400
200
Year
Elementary school
Middle school
High school
College & university
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1969
1967
0
1965
Graduates
800
College and University entrants and graduates
350000
300000
200000
150000
100000
Entrants
Graduates
50000
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
87
19
86
19
85
0
19
Number of students
250000
Population
Richard Florida: http://www.creativeclass.org/
Scientific Citations
Richard Florida: http://www.creativeclass.org/
Patents
Richard Florida: http://www.creativeclass.org/
Some questions that were asked
Is political ideology related to type
of industry?
A conservative city tried fashion
and video and it didn’t work
What attracts creative class?
• Quality of life in area
• Other talent in the area
– Clusters are built on this
• Tolerance in the area
Tourism: An island with
international tourism, is looking
at manufacturing because
tourism is too cyclical
• Transportation costs
• National tourism potential?
– Mexico has done this
• Tourism areas have a high quality of life,
which attracts the creative class
– What options exist?
Everyone is talking about
biotechnology
Still new but will be as diverse as
manufacturing is:
• Algae producing hydrogen for fuel
• Bacteria cleaning up oil spills
• Plants producing plastic or pharmaceuticals
• DNA computers
• Gene therapy
• Nano-biotechnology for medicine
Everyone is talking about IT
• Everything that we do relies on it
• Friedman, “The World is Flat,” talks about
breaking down the IT steps
Universities
• Do they increase the local level of
education?
– Also need jobs to keep people in the area after
they are educated
• Should you move universities?
– Generally no, but can start new ones
– Economies of scale for a comprehensive
research university (creative class)
– Focused research university (creative class)
– Teaching university can be smaller
Judith I. Stallmann
[email protected]
Population
Price index
South Korean employed persons by occupation,
1963-1993
Occupations: 1993-2000
8 000
7 000
8000
7000
Employed persons (1000s)
6 000
5 000
4 000
3 000
Legislators, officials & mangers
Professionals & technicians
Craft, trade, machine operators, elementary occupations
Agri, forestry, fishing
Clerks
Service, shop and market workers
6000
5000
4000
3000
2 000
2000
1 000
1000
Year
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
1969
1967
1965
0
1963
Employed persons (thousands)
9000
Official
Sales wokers
Service workers
Agri.,forestry,fishing workers
Production,transport,labor
Professional, techinical, andministrative
0
1993
1994
1995
1996
1997
1998
1999
2000