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HUD Archives: News Releases

David Egner (202) 708-0685 ext. 147Tuesday
Bill Connelly (202) 708-0685 ext. 115Oct. 15, 1996


DETROIT-- The New Economy of the Information Age is creating major opportunities for cities and suburbs to work together to create jobs and economic prosperity in metropolitan regions, according to a study released today by the U.S. Department of Housing and Urban Development.

HUD Secretary Henry G. Cisneros, who announced the study findings in a speech today to the Detroit Economic Club, said the study is the first bottom-up survey that the federal government has ever made of regional business, government and civic leaders to determine the needs of metropolitan economies.

"Our study shows that the New Economy will bring good news to America's metropolitan regions, where 80 percent of our people live and 90 percent of jobs are being created," Cisneros said.

"HUD's study shows that communities that emphasize cooperation over competition within their region have succeeded in expanding economic prosperity and creating jobs in the New Economy," Cisneros said. "Suburbs and cities, working together, can move people from welfare to work and can become more competitive in the global marketplace."

Based on the groundbreaking results of the study, called America's New Economy and the Challenge of the Cities, HUD will encourage communities to form partnerships for metropolitan economic growth, Cisneros said.

Cisneros said that Detroit Mayor Dennis Archer has agreed to bring together the region's government, business and civic leaders to form a partnership that can serve as a national model.

"The New Economy is media, computers, global trade, financial services, research and development, engineering, bio-medicine and telecommunications," Cisneros said. "It is new because many of these business activities literally did not exist before. But it is also new because of the unprecedented interconnectedness of the world's new competitive environment."

While many industries in the Old Economy were limited geographically to particular cities or suburbs, businesses in the New Economy are scattered across metropolitan areas and cross many municipal boundaries, the HUD study found. As a result, the study concluded that metropolitan growth strategies make more sense than those focused on particular municipalities.

The HUD report is based on research on 114 metropolitan regions nationwide, including detailed case studies of the economies of 10 metropolitan areas in the United States: Akron, OH; Atlanta, GA; Austin, TX; Detroit; Los Angeles; Jacksonville, FL; Nashville, TN; New York City; Portland, OR; and St. Louis, MO. The case studies list actions the federal government can take in each area to assist the metropolitan economic strategy.

The study found that economic growth and prosperity in America's metropolitan regions is being generated by 18 dynamic economic sectors -- called industry clusters in the study --that account for 54 percent of the jobs in the nation.

The producer-supplier clusters of related industries depend on each other for growth, the new study found. For example, auto manufacturers create jobs for companies that specialize in design and engineering of new vehicles, for suppliers of machines and technology used in making cars, for auto parts suppliers, for truckers who transport new cars to dealers, and for related businesses in research, computers and marketing.

The study identified the strength of the 18 clusters in 114 metropolitan regions. Eventually, HUD researchers will develop a Competitiveness Index detailing the strengths and weaknesses of every metropolitan economy in the nation, to "provide a road map to develop more effective metropolitan strategies for economic growth," Cisneros said.

The 18 clusters are: entertainment and tourism; health services; housing and construction; business and professional services; financial services; transportation and trade services; agriculture and food processing; electronics and communications; industrial supplies; materials supplies; industrial machinery; apparel and textiles; transportation equipment; printing and publishing; medical products; consumer goods; natural resources; and aerospace and defense.

The study found that the New Economy is strengthened by public and private investments in key areas, including: regional transportation and infrastructure; research and technology; and education and workforce development.

Cisneros said the Clinton Administration is working to strengthen the New Economy in regions around the country with many initiatives, including:

Steps to Foster Regional Cooperation

  • HUD's Homeownership Partnerships, which are bringing cities and suburbs together to expand homeownership across regions.

  • Federal funding for universities to support research that helps create and sustain regional industry clusters.

  • Expanding global trade opportunities.

  • Directing Federal transportation and infrastructure funds to support metropolitan economic strategies, such as improving airports, water ports, rail lines and mass transit.

Steps to Move People from Welfare to Work

  • Supporting targeted policies to link inner-city residents with regional jobs through initiatives like HUD's Bridges to Work program, which combines job training and placement networks with transportation subsidies and supportive services.

  • Producing plans to create a second round of Empowerment Zones that would enable employers located outside the zone to use the tax credits for hiring workers living in the zone.

  • Launching President Clinton's Welfare to Work initiative, with tax incentives for employers to create 1 million new jobs.

  • HUD's Homeownership Partnerships, which are bringing cities and suburbs together to expand homeownership across regions.

  • HUD's new Campuses of Learners program, which provides education and high-tech job training to public housing residents to prepare them for good jobs in the New Economy.

  • Providing aid to cities to help them revitalize abandoned industrial sites through environmental cleanup programs.

    Content Archived: January 20, 2009

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