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Exceptionally American Competitiveness: Entrepreneurial-Led Economic Growth Defines Our Nation

SOURCE: Flickr/Kevin Burkett

The Philadelphia Navy Yard is in the process of being redeveloped as a commercial and industrial site. In the coming five years it will serve as the campus for the first Energy Regional Innovation Cluster, one of many groundbreaking new programs enhancing U.S. economic competitiveness that President Obama should highlight in his State of the Union.

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President Barack Obama, his top advisors, and political leaders on both sides of the aisle in Congress know that 2011 must be all about boosting sustainable and meaningful jobs growth by fostering our nation’s global economic competitiveness in the 21st century. There are many ways for the federal government to do this—from serious efforts at deficit reduction and export promotion, to more focused spending on education, collaborative workforce development partnerships among colleges and businesses, and research and development programs.

But central to future U.S. economic growth and prosperity is an array of new federal economic development policies designed to help businesses, state and local governments, universities, community-based organizations, and workers come together where they all work and invest. These bottom-up, entrepreneurial-focused, regionally based federal programs need to become a more integral part of our economic competitiveness toolbox. There’s no better time for the president to make this case than in his State of the Union speech when he turns to competitiveness and job creation.

America must play to its strengths. What is uniquely American about our economic competitiveness is our rich entrepreneurial culture, our willingness to take risks in business, and our huge economy—where all this activity takes place in dozens of regional economies linked to each other and world markets, dynamically and competitively. Not unique to our country but still one of our core strengths is our deep public-sector investment in cutting-edge science and technology at our research labs and universities, which produces new ideas that with the right mix of entrepreneurialism can become world-beating products and services.

From the outset of the Obama administration, economic policy officials in the administration began examining ways for the federal government to help our economy do what it does best in the world—produce new and innovative products and services developed by highly competitive networks of companies, entrepreneurs, engineers, and scientists in hotbeds of regional economic activity across our nation. Officials at the various government agencies with a hand in economic development—the departments of Commerce, Energy, Labor and Education, the Small Business Administration, and the National Science Foundation, to name a few—teamed up over the past two years to roll out cross-cutting policies to link and align their support for these bottom-up, entrepreneurial-led regional collaborations.

Central to these programs is competition among regions for federal grant money and other government support. This competition requires each region to demonstrate its research prowess, its public-private partnerships for commercialization, and the business- and job-creating potential of its proposals.

The best example is a consortium of more than 90 public- and private-sector organizations based in the Philadelphia region that will host the first Energy Regional Innovation Cluster, or E-RIC, a new interagency program to accelerate energy innovation and commercialization. The new consortium contested with more than a dozen other regions to win $129 million in grants and programmatic support from the Department of Energy and six other federal agencies for investment in energy efficiency technologies that take a “system-wide” approach to making buildings more efficient. They will focus not just on the technology but on the design, construction, and operations as well. The overarching goal of the consortium: Job-creating breakthroughs in energy efficiency products and services that will combat global warming and sharply cut our dependence on foreign fossil fuels.

Viewed against a trillion-dollar federal budget, this $129 million program looks like a drop in the bucket in the government’s battle to boost U.S. economic competitiveness. But it is precisely the kind of economic policymaking we must expand upon in an era of heated global competition. The program has a small size in an era of fiscal discipline, and this is combined with a focus on leveraging taxpayer dollars through interagency collaboration and emphasizing private sector-led, innovation-focused regional economic development.

The agencies that spearheaded the E-RIC are now engaged in new collaborative efforts to deploy federal economic development dollars even more effectively and efficiently in 2011 and beyond. These are groundbreaking programs—based on a new way of thinking about the unique value each of our country’s individual regions bring to our overall economic competitiveness—that President Obama should highlight next week in his State of the Union speech.

Economic development at the state and local level has long been focused on the core notion that to start growing an economy you have to build on your existing strengths. U.S. economic development policymaking needs to start from the same principle. By weaving together our core strength in bottom-up, entrepreneurial innovation into our export promotion, workforce development, education, and infrastructure programs, we can ensure American economic development in this century delivers the kind of broad-based prosperity so many American workers enjoyed in the last century. A fair shot at the American Dream in the 21st century is not beyond our means. Not by any means.

Sarah Rosen Wartell is Executive Vice President of the Center for American Progress and most recently the co-author of “A Focus on Competitiveness: Restructuring Policymaking for Results.” Ed Paisley is vice president for editorial at the Center and co-author of “The Geography of Innovation: The Federal Government and the Growth of Regional Innovation Clusters,” published by the Center’s Science Progress program. Kate Gordon is vice president for energy policy at the Center for American Progress and most recently co-author of “Rising to the Challenge: A Progressive Approach to China’s Innovation and Competitiveness Policies.”

For more State of the Union policy suggestions see:

Finding Realistic Deficit Reduction by Michael Ettlinger

Smarter Enforcement, More Targeted Measures by Marshall Fitz and Angela Kelley

Touting the Benefits of Health Reform at This Year’s State of the Union by Karen Davenport

Education Priority Number One for Congress in 2011: Reauthorize ESEA

Clean Energy Progress Without Congress by Daniel J. Weiss

Scale Back the Defense Budget by Lawrence J. Korb and Laura Conley

Outlining a Strategy for Peace by Caroline Wadhams

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