Local Options for Economic Development in a Maturing Industrial Region

The economy of southwestern Pennsylvania, like the economies in other maturing industrial regions, has shifted from a manufacturing base to a service base. The shifts in population and jobs resulting from this change have not evenly affected all communities but have caused a significant divergence in the assessed value of property and municipal property tax rates. Interviews with corporate executives in the region suggest that while national and international factors had much to do with the decline in manufacturing employment, local government programs might have an important impact on firm retention and development. The authors recommend a number of local policies to enocurage companies to stay and grow and encourage import substitution, the formation of new companies, and flexible but comprehensive approach to economic development. Since most of the communities in the region are small (populations less than 8000), the authors recommend a regional approach to economic development as the only cost-effective alternative for the communities. The authors conclude with a discussion of an innovative new economic development mechanism, the Steel Valley Authority, to be created in southwestern Pennsylvania by the Tri-State Conference on Steel as an example of regional economic development.