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I highly recommend the new (4/19) book, "Jump-Starting America", by @jonathangruber1 & @baselinescene . The book does a great job of linking policies to increase U.S.'s overall growth w/ policies to spread growth more widely, in particular to more places: jump-startingamerica.com
The book's argument: we need to invest more in basic & applied R&D, in a wide variety of places (they identify over 100 U.S. metro areas as potential high-tech hubs), together with supporting investments in real estate (research parks), venture capital funds, & education/training
They rely in part on lessons from U.S. history that such R&D, which not only develops new research ideas, but brings them into production, can be effective in promoting both local and national growth. They in particular provide extensive econ history of WWII & Cold War era.
However, they critique this history. These investments were too narrowly focused geographically. This is a problem both politically and substantively. Politically because it leads to lack of adequate support for the govt funds required.
Substantively it is a problem because we need to spread benefits of job growth to diverse population, & various congestion costs impede growth if we just focus on a few cities. Yes, moving to more YIMBY policies might help, but also must spread labor demand .
Specific proposal is for a $100B/yr (0.5% of GDP) federal fund for basic&applied R&D, spread across many local tech hubs, coupled with state/local/federal funds for research parks, roads, financing, & science/tech education. Funds distributed by independent commission.
What would I add to this? First, I think my recent paper w/ Nathan Sotherland on high-tech multipliers supports their notion that there are high agglomeration economies to high-tech in many local economies, not just Silicon Valley.
This multipliers paper finds a higher local high-tech multiplier (due to input-output effects, & agglomeration effects, net of congestion costs) in local areas w/ more high-tech. But multiplier variation w/ initial high-tech share shows threshold effects.
Yes, Silicon Valley has higher high-tech multiplier than some random area. But high-tech multiplier is very similar to Silicon Valley in Twin Cities, Denver, & many other areas whose high-tech share is significantly above average. research.upjohn.org/up_workingpape…
2nd, I think it would be useful to think about how to evaluate their $100B fund. If Commission used quantitative rating system to identify high-tech hubs, RDD could be used for evaluation.
3rd, I would add funds for customized services for smaller businesses to their mix: manufacturing extension, customized job training, business incubators, small business development centers. Good evidence that such customized services can work: hamiltonproject.org/papers/bringin…
4th, I would add funds for better linking local non-employed w/ entry-level jobs that would be created in high-tech hubs, modeled after a Minnesota labor market program of the 1980s: research.upjohn.org/cgi/viewconten…
More jobs for local non-employed both promotes equity, & reduces labor supply constraints to these labor demand shocks.
Overall, I highly recommend this book not only to persons concerned with national growth, but with any students of regional economies who want to think about how to promote broadly-shared local prosperity. We must move beyond current incentive wars to more effective strategies.
