Consumption-Driven Urban Development

Abstract

Economic, political, cultural, and environmental distinctiveness may attract highquality workers and firms as well as reflect a region's export viability. We hypothesize that local consumption activity can be a source of such distinctiveness and thus of long-term growth and stability, and that specialization does not reflect export activity alone. Using skewness across metropolitan regions in the United States as a distinctiveness measure, we show that some occupations are more lopsided in their distribution than others. Because some highly skewed occupations like health care support workers and artists, media, entertainment, and sports workers are known to be chiefly local-serving; their regional significance can be attributed to variations in residents' local consumption spending rather than export demand. We conclude that economic development practitioners should weigh the considerable investments, including subsidies and tax incentives, made in wooing and retaining presumptive export base activities against those that might target distinctive local consumption activities.

Keywords:

• consumption base
• occupational analysis
• innovation
• import substitution
• regional distinctiveness