Three Keys to Inclusive Growth
In a 2 July 2017 article by Amy Liu, a vice president at the Brookings Institution in the USA, she wrote about the pressures that US cities and regions must confront if they want to create economic opportunities that result in broad-based prosperity.
This is a précis of the article.
The US Cities are under pressure to find solutions for the nation’s weak productivity growth, stagnant wages, and stark racial disparities. Along with the private sector they are expected to step up their investments in infrastructure, basic and applied research, job training, and housing assistance. They need to build more productive, inclusive economies to address the structural barriers, past and future, that prevent many people, places, and businesses from participating fully in the economy.
At the same time, cities and metro areas must help their communities adapt to the rapidly shifting dynamics of the new era, which threaten to exacerbate inequality and exclusion. For instance, technology is transforming every occupation and industry in cities large and small. How can one create more inclusive economies in this disruptive age? City and regional leaders should help their communities adapt in the following three ways:
Help people adapt their skills to the changing demands of our economy. Many older workers are struggling to translate their skills and experience into stable employment, while younger ones lack meaningful workplace experiences or personal networks to find good jobs. City leaders can help both groups by promoting apprenticeships and other work-based learning programs, organizing digital training, focusing on particularly vulnerable youth and providing support for near retirees.
Improve connectivity and access to better opportunities. Too many neighborhoods within metro areas are isolated; cities can help re-connect them by investing in better transport, more affordable housing in opportunity-rich neighborhoods, and a network of innovation hubs and job centers so that residents are close to jobs regardless of where they live.
Help businesses launch, scale, and innovate, promoting greater economic dynamism and productivity. Despite all of the promises of technological innovation, research confirms that business formation and productivity is flat, challenging workers’ paths to upward mobility and income growth. City and metropolitan leaders can create healthier, more productive business ecosystems by helping firms invest in their employees and new digital solutions, encouraging entrepreneurship and startups, especially among under-represented groups, and connecting small and mid-sized firms to new customers and markets abroad.
Achieving more productive, inclusive economic growth requires multidimensional action. Local and regional leaders will need to change mindsets, emphasize systemic reforms over narrow new programs, and reimagine ways to finance solutions. It certainly won’t be easy. But in today’s political climate, progress on these crucial objectives will increasingly depend on the adaptive actions of cities and metro areas.