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This file, “REPP-1990-Redman.pdf,” is a report titled “Understanding State Economies Through Industry Studies” by John M. Redman, published in 1994 by the Council of Governors’ Policy Advisors. The report serves as a guide for state policy advisors, economic development officials, and public sector researchers to understand their economies through focused industry studies. It argues that states need to be more strategic in their economic development efforts, moving beyond traditional “market failure” approaches to more targeted, industry-based strategies. Key takeaways from the document include:
- Usefulness of Industry Studies: These studies help states prioritize business assistance, choose effective policy options, enhance service delivery, foster public-private collaboration, build program support, and increase policy credibility.
- Defining an Industry: The report discusses various ways to define an industry, from broad Standard Industrial Classification (SIC) codes to more detailed “value-added production chains” that consider interconnected firms (suppliers, distributors, customers) and related institutions (labor force, government programs, substitute/complementary products). It highlights the limitations of relying solely on SIC codes due to aggregation issues and lack of linkage information.
- Questions for Industry Studies: The document proposes two main paradigms for structuring industry studies:
- The Cluster Paradigm: This approach focuses on identifying and supporting geographic concentrations of interdependent, internationally competitive firms and their supporting institutions. It emphasizes nurturing export-oriented industries and strengthening “backward and forward linkages” within these clusters.
- The Functional Specialization Approach: This paradigm suggests a more selective state response to economic globalization, though its details are less elaborated in the provided text.
- Considerations for States: The report stresses the importance of understanding firm size (large vs. small/medium enterprises) as their needs for assistance can differ significantly. It also emphasizes including factors like labor force quality, consumer demand, and government policies in industry definitions.
The appendices offer resources for literature reviews, statistical data, and tracking performance in industries, further supporting the practical application of the concepts presented in the report.
