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This report from Jobs for the Future, published in August 1992, examines Strategic Development Organizations (SDOs) and their role in state economic development. The report defines SDOs as groups that aim to make state governments more efficient and imaginative in fostering development, with a goal of renewing or revitalizing state development policy.Key aspects of SDOs highlighted in the report include:
- Role and Purpose: SDOs are seen as a new force in reinventing economic development, re-creating state government, and revitalizing state economies by promoting sustainable long-term investment. They operate extra-governmentally, facilitating but not dominating the process, and balancing various interests. They seek to bring together disparate political interests, provoke informed debate, and formulate specific policies.
- Approach to Change: SDOs believe meaningful change requires engaging both “top-down” policy elites and “bottom-up” community efforts. They aim to reconstruct the state’s civic culture by building the capacity of organized constituencies and citizens to discuss issues and reach consensus.
- Common Features (Chapter 3):
- Strategic Planning for the Long-term: SDOs fill a critical void by focusing on long-term, structural development, requiring expertise, original research, and a compelling economic vision for the state. They often engage in “visioning” processes with business leaders and, in some cases, a wider array of constituencies and citizens. Their quasi-public nature insulates them from short-term political pressures.
- Convening Diverse Policy Players: SDOs provide neutral forums for focused, informed dialogue to build consensus among diverse policy players, especially as political party power wanes.
- Sponsoring New Research and Policy Analysis: SDOs provide credible, objective research that elevates public discussion, identifies neglected development needs, and frames new analytic frameworks (e.g., Oregon’s benchmarks linking social concerns to economic well-being).
- Building the Capacity of the State Civic Culture: SDOs foster civic participation and nurture the state’s civic culture, going beyond education and participation to hoist up new images and symbols that unite people around a common cause.
- Incubating and Implementing Programs: While primarily strategic planners, SDOs inevitably incubate and sometimes implement new programs, acting as “paternity” for initiatives and carefully selecting projects that break new ground and spark wider reforms.
- Five Pioneering Organizations (Chapter 2): The report profiles five SDOs, noting their unique characteristics but shared resemblances:
- Indiana Economic Development Council Inc. (IEDC): Founded in 1985, focuses on strategic development planning, program coordination, and economic analysis. Emphasizes workforce development and is influential as an opinion leader, reaching the state’s “leadership group.”
- Kansas Inc.: Created in 1986 in response to an economic crisis, acts as a policy think tank and convenor. Instrumental in education, workforce training, and technology initiatives. Has a policy-driven board with government and business representation.
- Oregon Progress Board: Established in 1989, its sole mission is strategic planning through explicit, well-researched benchmarks that drive state policymaking and agency budgeting. Actively educates the state’s leadership elite and citizenry.
- Maine Development Foundation (MDF): Founded in 1977, functions as a convenor, educator, and capacity-builder, focusing on long-term economic development, education, health care, and infrastructure. Reaches out to diverse constituencies and has a strong record of “spinning off” initiatives.
- Enterprise Development, Inc. (EDI) of South Carolina: A quasi-public development corporation focused on technology development, commercialization, and development finance, recently broadening its agenda to include human capital. Emphasizes program implementation and has been remarkably resourceful in leveraging state appropriations with private funds.
- Challenges Facing SDOs (Chapter 4):
- Political Entanglements: SDOs must retain independence while establishing stable relationships with political powers. Total insulation is neither possible nor desirable, as personal ties to leaders are crucial for advancing policy agendas.
- Relationships with State Governments: Governance structures vary, impacting political access, clout, and vulnerability to political changes or budget cuts. Looser affiliations allow more agenda-setting freedom but require greater private financial support.
- Developing Top-down and Bottom-up: While effective in “top-down” policy mechanisms, SDOs face the challenge of engaging “bottom-up” players (mayors, local businesses, citizens) to ensure long-term impact and deep roots for their development visions.
- Funding: The ambiguity of SDOs’ political sponsorship and novel roles makes funding a special problem. They often rely on mixed funding portfolios (state appropriations, private sector, foundations, memberships).
- Evaluation and Accountability: It is difficult to develop clear and quantifiable performance standards for SDOs due to the indirect, intangible, and long-term nature of their work. However, some (like EDI and Oregon) use quantitative and qualitative measures to demonstrate value and improve performance.
- Balancing Competing Concerns: Successful SDOs are often tempted to take on a wide range of projects, risking diffusion of organizational energies and distraction from their core missions, especially the inherent tension between strategic planning and program implementation.
The report concludes that SDOs represent a promising new way for states to think about and implement development in a more systematic, comprehensive, collaborative, and visionary manner, despite the challenges they face.
