I find so interesting learning about Local Economic Development. First of all because, why should LED be important? And second, What is the purpose of it? Once you start thinking about it, it gets complicated.

Comparing what local governments do, you can see that there is not so many differences withing different countries, and that neither there is too much of a difference between political left and right. Also another thing is that looking at historical examples, one can find the same approaches over and over.

Another point is that there is a great interdependence at the regional, national and global scale. Furthermore the path dependance of a city, is extremely relevant. In other words, the local history matters a lot.

Anyways, recently I went to my wife’s Grandma funeral in Utah. While she was visiting with her family I spent a couple of days at the library of the Brigham Young University, which I found pretty good. There were many interesting books, in fact some of them about Denmark are not available back at Aalborg. I think this happens because there was an enormous Danish immigration to Utah, and therefore there is a lot interest about Denmark in Utah.

Here are some titles of books I went over:

Local Economic Development in Denmark.
Sven Illeris (ed.) 1988. AKF. Local Governments’ Research Institute. Copenhagen.

[Illeris is an economic geographer that has made a great job bringing together a good group of researchers on the issues. I particularly enjoyed the chapter of] Henning Snell :Local Government Promotion of Economic Activities-Publicity Stunt or Community Development?”

Economic and Political Trends in Danish Local Government. National Association of Local Authorities in Denmark. 1981. [A perfect summary that I needed]

Why Don’t State and Local Economic Development Programs Produce Economic Development?
By Margaret Dewar. State and Regional Research Center. University of Minnesota. 1992 [A brilliant report much needed]

Understanding Local Economic Development. Malizia & Feser. Center for Urban Policy Research. 1999
[It discussed a few theories relevant for local economic development, such as:
Economic Base Theory
Extension of Economic Base Theory
Regional Theories of Concentration and Diffusion
Regional Growth Theory
Trade Theory
Product-Cycle Theory
Entrepreneurship Theories
Theories of Flexible Production

With some bias towards quantitative studies, but cool]

Local Economic Development Efforts in the Youngstown-Warren Area. Hearing before the Subcommittee on Trade, Productivity and Economic Growth of the Joint Economic Committee Congress of the United States ninety-seventh Congress. December 14, 1981. U.S. Government Printing Office. Washington, 1982.
[This is the one that I probably enjoyed the most. It took me a whole day to read it and take notes, It was good because it has many key people (entrepreneurs, politicians, academics, community organizers, business owners, etc.) giving their serious opinion about the Local Economic Development of an area which never took off]

Before I start some qualitative research in the area I have to study the background. I always like to pay special attention to history. In the outstanding libraries here I have found some very interesting material, some of them quite old. I have a pearl to share.

This is from “The prospects of Vallejo; or, Evidences that Vallejo will become a great city. A re-publication of a series of articles first printed in the Vallejo evening chronicle, from March to July 1871.”  It came with a nice map, and when they gave it to me, the librarian told me: “careful, the map is falling apart”.

To put in context, the leaders of Vallejo at the time, were explaining the reasons why Vallejo was going to become a big metropolis, probably among the top 3 cities in California (being at that time the city of San Francisco their main competitor, which even though it had the 25% of the State population and the 50% of its wealth, it seemed to show some weaknesses related to economic geography issues). The articles are actually really good. In such a fashion that I think anyone could be convinced. The main reason they argue was that the train arrived to the city (direct connection from East Coast to West Coast), and that their harbour was starting to take off. During the various articles they mix the best skills of real estate, politicians, academics and marketing fellows.  Their main point was to attract capital for their harbour. Probably these guys had all the investments in their life there.

The interesting thing is the different language. Something that now would not look politically correct. Their thesis all across the articles is: 1) “the intelligent men” look for the most profitable places for their enterprises, 2) They go where they are, and 3) That’s what creates economic development (me paraphrasing).

In the following snippet, (that I think I’m the first to transcribe on the internet) they quote the magnate Horace Greeley, and then they present a rebuttal:

Horace Greeley on San Francisco

At a dinner given in New York on the 13th of October, 1869, to an excursion party of the California Pioneers, Horace Greeley having been called on to respond to the toast of “New York and California,” in the course of his remarks said:

When we speak of the present or the expected greatness of these two remarkable cities, New York and San Francisco, I bet that it will ever be remembered that great cities are the expression of great ideas that they grow out of genius men. Alexander gave his name to the city he formed, and that city bears his name and is memorable to this day. Rome is mighty because of the Senate and people that made her high and proud position – made her the Eternal City; eternal because the genius that created her still lingers over her hills, still is reflected in the sunshine that gleams on her palaces; and thus the shadows of ancient greatness recall to our minds memories and associations that make us nobler that we otherwise would be [Applause.]   If these two cities are to be great, they will be great because of the men who have still the genius to preserve and extend the advantages they have won. Had there been no De Witt Clinton, and had there been no Erie Canal, in vain would have been the central position and commercial advantages of this city. She was not the first city of America until her great men gave artificial extension and development to those advantages, and thereby fixed on her, I think, for centuries, certainly for the present age, the honored advantages of being the emporium of the Western World. If she is to maintain this position, she will do it because she will do it because she will have great men continually able to keep her in advance. As she has seized the canal, telegraph and railroad, and pressed them into her service, so she must be ready, as new inventions are presented, to seize them and turn them to her advantage. As it is with New York so will it be with San Francisco. Les us not believe that because this city has quadrupled in population in the last half century that it is in the order of things and must continue. She will maintain her position, for her great men have the power to plan new enterprises, and her great financiers shall second those efforts, and continue to keep her at the head of the commercial world. So with San Francisco. The great railroad recently achieved would never have been if there had not been men in that city who saw capacities and perceived opportunities and possibilities which the multitude did not see.

Mr. Greeley is wrong in supposing that the construction of the railroad is due to San Francisco; he is wrong in supposing that the danger to which that city is exposed (he refers to it, evidently, though he does not mention it,) could be averted by the genius of the business men; and he is wrong again in assuming that genius makes cities. It is the good site that attracts and rewards genius, and stimulates enterprise.

I’m looking at these two cities areas. Frederishavn is a small city of roughly 25,000 inhabitants in North Denmark, with some dependent towns around. Vallejo it’s a city in California 4 times bigger than the Danish one.

For several reasons that I will lay out, I think Frederikshavn has some interesting lessons to learn from Vallejo. Perhaps, it can also be the other way around.

I’m not really doing a comparative study. However I’m going to say some of the differences and similarities between these two places. (See a map of the two)

Differences

  1. Vallejo is considered by some, part of the San Francisco Bay Area. So it’s geographically close to a population of 7 million people.
  2. It’s in the United States, and it’s regulated with its Federal (national) and State (California) laws.
  3. American socieconomic characteristics.
  4. Historical traits of U.S. western city (with booms and busts).
  5. Very diverse population. Frederikshavn has a less than 5% of its population non-white, Vallejo has only 1/3 of its population white, the rest is quite mixed (1/4 Asian,  1/4 African-American, and the rest from different races. Hispanic are 15% aprox.)
  6. Vallejo has a very nice weather :)

Similarities that Vallejo has with Frederikshavn:

  1. Blue-collar town (with all that this implies)
  2. Train got there at the same time (1869 in Vallejo and 1871 Frh.) by the end of railways boom.
  3. Its coast and train arrival are the two most important factor to explain the existence and development of both.
  4. Industrial oriented during all 20th century
  5. Shipyards highest employer during mid 20th century (In Vallejo were mostly military)
  6. Shipyards closed in the 90’s
  7. Traditionally military “Navy town” (Base closed in 1996 in Vallejo)
  8. It can be considered in the “periphery” of innovative regions, supplying people there
  9. ‘Little brother syndrome’ compared to relatively close bigger cities
  10. Even though they’re not a rich town, they have a decent living standard on average
  11. Important recent political changes (political tension).
  12. Recent change of Mayor (2008-09)
  13. Strong emphasis in ‘experience economy’ (recreation, tourism, culture, etc.)
  14. Town in the middle on the way of bigger city-regions (“strategic” geographical position)
  15. Strong focus on fostering entrepreneurship, with partial success
  16. Powerful unions
  17. Regarded as a lesser city by the bigger cities
  18. Education scores are lower than average
  19. A high number of young people leave
  20. Relative violent reputation
  21. There is a small marina
  22. There is a ferry service
  23. Crucial building projects have not started because of lack of funds
  24. Current higher unemployment than average
  25. Recent serious economic troubles
  26. A few groups of very active citizens
  27. They are the poorest rich (The Bay Areas as well as Denmark are very rich places compared to the rest of the world).

I have been updating this post. The more I have studied Vallejo, the more I found similarities.