Matt sends along a link to comments by Ed Paisley on regional development (focusing on “regional centers of innovation,” like Silicon Valley. From the transcript:

How can the federal government cultivate regional centers?

One of the complicating factors about trying to develop regional centers of innovation is they spring forth kind of on their own. Policy is very hard to pull together to develop them. And that’s particularly the case with the federal government. The federal government provides lots of funding for science and innovation for basic research, but one thing it doesn’t do very well today is focus on the development of a holistic approach to this kind of regional development, including workforce development; education; training; finance, which is very important for start-up companies; and other regulations such as that, taxes as well. These are the kinds of policies, if they’re brought together by the federal government and can work with state and local government, that you can develop a working solution for different areas in different ways.

Actually, regional centers do not at all spring forth on their own. Many of them are underpinned by universities. The Research Triangle, for instance, is built around three regional universities, two of which are public. And private universities nonetheless benefit considerably from public funds, particularly for things like research.

And many of the nation’s most successful regional centers, including Silicon Valley and the Research Triangle owe quite a bit to direct government action. An interesting look a the interplay of government policies that helped produce these places can be found in Margaret Pugh O’Mara’s essay in The New Suburban History. In a nutshell, waves of defense research money flowed to a number of regions during the era of mass suburbanization. Where local politicians were best able to package themselves to the government, enduring technology corridors grew up. And innovative centers are strongly persistent. Research subjects and technology have changed remarkably in the past half century, and yet the map of key research centers looks an awful lot like it did in the 1950s and 1960s.

So it’s not at all correct to think that there’s no policy angle here, at the local or federal level. There are several key ingredients that the government can contribute. One is funding for education, at basic and higher levels. Another is funding for research. A third is funding for infrastructure around which regional centers can grow. And finally, the government should work with agglomeration economies, not against them. What this suggests is that excessive dispersion of developmental efforts will lead to failure. Sadly, not every state can have a major regional center. It also suggests that many policies should be targeted toward making existing centers more accessible, by improving infrastructure and increasing housing supply in those places.

Really, none of this is that hard. Educate your population, and foster urban growth. What’s striking is how poor a job we’ve managed to do on these counts.