Steven Deller

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? 

The 4th Wave

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University of Minnesota Extension Department of Community Development’s CD Exchange webinar series.�University of Wisconsin-Madison, Division of Extension, Community Economic Development’s Lunch-n-Learn series.

July 22, 2025

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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“Why are we trying to create more jobs when we can’t fill the ones we have?”

Rural Wisconsin resident at a community meeting.

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“[f]ind an area that you want to live, then start your business.”

Rural small manufacturer (Halstead and Deller 1997)

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

There is a long tradition of attempts to influence local economic growth in the U.S.

• Tax incentives were offered by the state of New Jersey in 1791 to industrialist Alexander Hamilton to influence the location of a manufacturing plant.

• The famed Erie Canal, completed in 1825, is one of the first public investments in infrastructure and was justified in terms of offering a cheap and safe way to transport agricultural products to markets.

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• By 1884 the State of Pennsylvania had invested over $100 million and placed promoters of the state on the board of directors of more than 150 corporations.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Mississippi Balance Agriculture with Industry (BAWI) policies of the Great Depression era (1933)

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Established the idea of a positive business climate around ideas of:

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• Cheap labor
• Cheap land
• Limited regulation
• Limited taxation

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First shots fired in the “new war between the states”.

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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Texas Office of the Governor:

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Texas offers companies of all sizes and across all industries one of the best business climates in the nation, with a fair, transparent tax and regulatory structure designed for businesses to succeed. With no corporate or personal income tax at the state level, companies operating in Texas enjoy one of the lowest overall tax burdens in the country. Texas is committed to maintaining its position as the best state for business, and passed legislation providing over $4 billion in tax relief for businesses. Texas prides itself on being a right-to-work state and will continue to make strategic investments to ensure it maintains our competitive advantage, allowing businesses to prosper and grow.

North Carolina Economic Development Organization :

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North Carolina has a proven track record of reducing and streamlining business taxes. At 2.5 percent, our state has the lowest corporate income tax rate in the country. North Carolina’s business costs rank among the lowest in the nation, making our state a more profitable place to work. Recent tort reform, streamlined practices and the strengthening of business courts in the state have earned North Carolina accolades and rankings among the best legal climates in the U.S. What does this mean for you? When there’s less red tape and litigation, your business can reach new heights, faster.

Florida Economic Development Organization:

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Florida consistently ranks among the best states for business, thanks to its pro-business state tax policies, competitive cost of doing business and streamlined regulatory environment. Florida is working on legislative, fiscal and marketplace initiatives such as insurance tort reform, targeted industry incentives and many more. Florida is also a right-to-work state. Businesses thrive in this low-tax environment, and employees enjoy the benefit of no personal income tax.

Tennessee Economic Development Organization :

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Tennessee is proud to be a right-to-work state with no personal income tax on wages. Our state and local tax burdens are among the lowest in the country, and our state budget operates with a healthy surplus rather than a deficit. Successful overhaul of our tort and workers compensation laws.

Idaho Department of Commerce:

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In Idaho, we keep our costs and taxes low, and we remove the burdensome regulations that get in the way of success.

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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Policies that may have made sense 75 or 50 years ago do not make any sense today.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

1^st Wave: Industry Recruitment, focus on manufacturing.

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• Big firms were the focus of attention. (What is good for General Motors is good for America.)

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• Tax incentives. (Throw money at businesses to invest in your state.)

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• Public dollars invested in infrastructure

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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Work by David Birch (1981) found strong evidence that job growth comes not from large but smaller, and more recent work (e.g., Conroy and Deller 2015; Haltiwanger, Decker, Miranda 2013) notes particularly newer, firms.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

2^nd Wave: Smaller Businesses, focus on existing businesses.

Starting in the 1980s several things came together:

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• Recruitment proved to be exceedingly frustrating and a waste of time, energy and limited resources.

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• Communities realized they are not positioned to play the “incentives game”, leave that to the state government.

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• Realization that job growth came from new business formation.

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• Shift in focus on fostering entrepreneurship and existing businesses.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

2^nd Wave: Smaller Businesses, focus on existing businesses.

• Technical assistance for startups
• Incubators and accelerators
• Access to capital for small businesses
• Networking & mentoring programs
• Business retention and expansion programs
• Place focused efforts such a the Mainstreet Program

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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Starting in the late 1990s and into the 2000s two things came together:

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• Efforts seemed disjointed and scattered, lack of strategic focus.

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• The EDA embracement of Micheal Porter’s notion of economic clusters.

3^nd Wave: Public-Private Partnerships, focus on “clusters”.

(Shoot anything that flies, claim anything that lands.)

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

3^nd Wave: Public-Private Partnerships, focus on “clusters”.

• Focus limited resources on existing industrial “clusters” with an eye toward new-emerging “clusters” (be strategic).

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• Networking is key to dynamic and vibrant clusters, to facilitate such networking form public-private partnerships.

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• Invest in public institutions that can support the cluster.

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• Regional approaches that require cooperation across many communities.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Starting in the late 2000s through today several additional factors became prominent:

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• Innovation comes from people and notions around Richard Florida’s “Creative Class”.

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• People are “voting with their feet” and quality of life matters.

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• Structural labor shortages.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Structural labor shortage?

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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Greater than One: Labor Surplus

Less than One: Labor Shortage

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

“voting with their feet”

Historically the data supported the idea that “people follow jobs”. Focus on creating employment opportunities and people will come.

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Increasingly the data is suggesting that “jobs follow people”.

That rural manufacturer: “[f]ind an area that you want to

live, then start your business.”

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Quality of life, or livability, is becoming a focal point of community economic development efforts.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Are communities shifting from a “jobs, jobs, jobs” view of economic development to a “people, people, people” view?

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Realization that “jobs follow people” may have flipped?

Why would people want to live and work here and perhaps start their business here?

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

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Planners talk in terms of Placemaking, which in the context of economic development, refers to the intentional process of creating, enhancing, and sustaining public spaces and built environments in ways that improve quality of life, attract talent, foster community identity, and stimulate economic activity.

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Planners like to talk in terms of “walkability” and “mixed use developments”, and “inviting public spaces….

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But the challenge is much of the work by planners is located in larger urban centers. Do the “lessons learned” from urban translate into rural and smaller communities?

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

• Good schools, not to feed the labor market but to be attractive to families with children.

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• Public safety, do I feel safe walking my dog at midnight.

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• Parks, recreation, libraries.

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• Community fairs, festivals (art in the park, farmers markets, music on the square).

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• Viable local business organizations, including professional development opportunities for local businesses.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

• Free public wi-fi.

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• Active volunteer organizations.

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• Early childhood education (Quality elder care)

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• Create networking opportunities for small business owners and those interested in starting a business.

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• Be open and receptive to newcomers to the community.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Be open and receptive to newcomers to the community….

“You don’t understand because you're not from here……….”

This “attitude” of the community can be the “kiss of death”………

Do the strategies that flow from these different “waves” of thinking replace those that came before?

No, rather reorientation of our thinking and refocusing types of strategies considered.

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One could think in terms of broadening our approaches.

Steven Deller

Center for Community and Economic Development

Economic Development Administration University Center

Department of Agricultural and Applied Economics

University of Wisconsin-Madison

Are We at an Inflection Point in Community Economic Development? The 4th Wave.

​

Thank You!

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Steven Deller

scdeller@wisc.edu