CUED
Center
for Urban Economic Development
University of Illinois at Chicago
The
State of the Economy and Economic Development
in the Chicago Metropolitan
Region
Project Number: 240
Report Date: May 1986
Author(s): Wim Wiewel
The various plans regarding economic development in the region which have been produced over the last half dozen years differ in their assumptions. Some quite eloquently argue that the region's old industries, especially in manufacturing, are dying, not just here but nationwide, and that resources should be devoted to new industries. Others offer evidence that manufacturing, although shrinking in size and importance, is restructuring and remains a mainstay of the region. Indeed, it is argued that without a strong manufacturing base other industries have no chance of taking off. Depending on the assumptions, some of the plans recommend marketing the area to outside firms, others emphasize the importance of improving the business climate for firms here, while others seek to identify what is needed to encourage growth among the emerging new sectors of the economy. The plans also differ in the relative importance they attach to different components of the labor force, especially whether training and retraining of the currently unemployed and displaced workers is most important, or whether training resources should be focused on new labor market entrants. Depending on their sponsors, the plans often differ in the relative importance they give to government or to the private sector in generating economic growth, although they all agree on the need for greater cooperation.
If resources to undertake economic development activities were unlimited, almost all of the proposals and initiatives would be worth pursuing. While certain areas and population categories would benefit more from some programs than others, there are probably few proposals that would not result in a net benefit to the region's economy. However, given limited resources, such a net benefit is not sufficient. With the limited amount of planning resources, civic energy, and public dollars which are available, we need to seek out the most valuable intervention programs, which requires an understanding of present conditions.
The review of conditions and trends in the region, presented in Section I, shows the tremendous assets for economic growth which exist, as proven by the very high growth rates in some of the suburban areas. In spite of this growth, there is good reason to be concerned about the business climate of the region. The main factors in this business climate may not be so much taxes and other financial considerations, as well as the quality of life issues, such as education, perceived safety, and political stability. To the extent that the region has a poor image in this regard, both internally and externally, it is connected in part to the other side of our economic reality: the tremendous job loss in Chicago's neighborhoods and the worsening conditions of the city's increasing minority population. Regional economic policy needs to deal with both realities.
The analysis in section I concludes that there are four main tasks for the region. First of all, redevelopment needs to be stimulated in the areas where the greatest job loss has taken place and where the vast majority of the un- and underemployed live. Second, access from high unemployment areas to areas of high growth needs to be improved. Third, there is a need to continue to build on the strengths of high growth economic and geographic areas. Finally, development in high growth parts of the region needs to be guided and channeled so that its negative side effects are minimized and growth doesn't choke itself, either through congestion or overspecialization.
Different economic development entities in the region have different roles in regard to these tasks. For instance, it makes perfect sense for the City of Chicago and neighborhood organizations to focus on the first task, neighborhood development, while also continuing to enable growth in the Loop. The city's "Chicago Works Together" plan presents this as a goal of "balanced growth" (Chicago Department of Economic Development, 1984) It is also quite reasonable for many county and suburban economic development agencies to focus on the third and fourth tasks, enhancing growth while minimizing its negative side effects. The "Make no little plans" report of the Civic Committee of the Commercial Club (1984), as well as many suburban plans, address these issues in particular. The second task, increasing access, however, should be a concern of all parties.
Furthermore, all organizations need to have a clearer sense of how their individual tasks relate to joint problems. It is the natural task of regional organizations, such as the Regional Partnership and its members, to continually formulate, monitor and promote these common realities and joint tasks. Section I will first briefly discuss the main economic trends in the region. It will discuss the decline of manufacturing and the extent of growth in other sectors of the economy, with particular attention to issues of technology and new business formation. In this section we will also discuss some of the locational consequences of economic changes, focusing on the process of suburbanization, the needs of neighborhood economic development, and the situation of minorities. Section II presents many of the economic development programs in the region, while Section III summarizes the key programmatic initiatives which are needed to adequately address the region's main problems.
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