Alleviating the Lagging Performance of Economically Depressed Communities and Regions

Many great twentieth-century centers of industry(e.g., Detroit, Michigan, and Gary, Indiana) are economically depressed areastoday. It seems that large and powerful corporations often lose out when facedwith competition that is truly entrepreneurial. According to this analysis, theinflexibility of the old order is the key to understanding why theentrepreneurial newcomer often prevails. After a discussion of the dynamics of regional cumulative underdevelopment,it is argued that local government responses to economic decline are oftenthemselves contributors to further economic deterioration. Attempts to useeducation and training as place-based redevelopment strategies have provenineffective. What is needed is an entrepreneur who can profitably redeploy theunderutilized resources of the depressed region. The entrepreneur's task is toattract the necessary resources from outside the region that, when combinedwith local resources, will translate it into a viable business entity. This analysisof area revitalization also offers lists of specificconditions that small, innovative manufacturing firms must meet in order tostrengthen the local economy. For example, the market for the firm's productmust be small, and the product must be highly differentiated and capable ofbeing delivered quickly. (SAA)