Finding a long-term place for ‘place-based’ development strategy

The watershed legislation of the Biden years continues to loom large as the Biden administration winds down.

Most conspicuously, the administration’s major spending bills—the American Rescue Plan Act (ARPA), the Infrastructure Investment and Jobs Act (IIJA), the Chips and Science Act, and the Inflation Reduction Act (IRA)—stand out for their sheer size.

Together, the bills loom historically large and account for some $3.8 trillion in outlays aimed at modernizing the U.S. economy. What comes after them in the next administration, if anything, is a vital question.

And yet, beyond the big bills’ scale, something else matters intensely about this legislation: the inclusion within it of nearly $80 billion in explicitly “place-based” industrial policy that is now being tested in the nation’s regions.

Authorized by the 117th Congress but in many cases under appropriated, the nearly two dozen individual place-based economic development programs embedded in the big policy packages stand out as a critical experiment for a nation that has been struggling with stark regional divides and uneven economic progress.

The “place-based” experiment matters because “place-based” policies—which channel investments or other interventions into particular locations—reflect a growing recognition that the nation’s economy is itself place-based—shaped by a tilework of distinct local economies—and requires place-focused problem-solving.

As such, the new place-based economic investments have put into action compelling new programs such as the Economic Development Administration’s Regional Technology and Innovation Hubs and the National Science Foundation’s Regional Innovation Engines that take a fresh stab at engaging more directly, precisely, and efficiently with the roots of the nation’s economic issues. Such programs purport to support “bottom-up” local problem-solving that gets at the “micro” underpinnings of broader “macro” challenges, whether it be building up the nation’s semiconductor sector in Phoenix to compete with China or improving worker training for an advanced mobility cluster in Tulsa.

But now, the presidential election may bring a major decision point. The presidential candidates each point to the China competition and the struggles of places “left behind,” but they would likely train very different views on place-based initiatives.

Kamala Harris appears fully committed to the Biden-Harris focus on large, place-focused grant competitions channeled to top-quality ideas from places—often ones scarred by deindustrialization. In her September 25 speech in Pittsburgh on industrial strategy, Harris spoke of “prioritizing investments for strengthening factory towns” and “investment that brings all places and workers along”—a clear reassertion of the Biden-Harris administration’s focus on place-based growth strategies.

For his part, Donald Trump expresses anger at the damage wrought by the deindustrialization caused by Chinese low-cost impacts but doesn’t have much to say about place-oriented industrial policy. To the contrary: The conservative Project 2025 agenda for the next administration calls for abolishing the Economic Development Administration—a focal point of the Biden-Harris administration’s awards to regions—and reallocating its funding to other priorities.

And yet, with that said, murmurings on Capitol Hill continue to suggest that there could be bipartisan investment in place-based programs like the Tech Hubs in the next administration, regardless of who wins the election. The investment would likely be oriented toward technology scale-up on topics like AI that are vital to the China competition.

In any event, the election will likely greatly affect the scope of the next phase of place-based policy in the U.S. While a Harris administration would likely seek to extend the experiment, Trump might well let the experiment peter out, with only a few exceptions.

Given that, the stakes are high as the nation continues to test new “place-based” programs to counter the regional inequality that continues to divide the nation.

For the first time in several generations, the nation has on the table sizable new tools for addressing the stubborn economic problems that wrack the scores of local communities following deindustrialization.