California’s economy recently passed Japan’s to become the fourth largest in the world. But unlike in Japan, where industrial policy and economic planning are standard, California’s economic growth has long been driven by both accidents of history and natural advantages (see sidebar below).
In recent years there have been major new initiatives and investments in regional and statewide economic development, in part to address geographic inequality. Efforts like California Jobs First, K-16 collaboratives, and the Master Plan for Career Education demonstrate the start of a more structured approach to a state and regional economic and workforce development system.
Looking ahead, we can leverage and build on these efforts as we seek to establish a more durable “regions-up” economic development system. In a world of rising competition, changing economic conditions, increasing geopolitical and climate impacts, and inconsistent federal funding streams, we need more long-term initiatives and investments (not one-time funds). Now is the time to build a system an economic development policy and implementation structure that endures.
As other states and countries have shown, consistent regional economic development structures with ongoing government support can create success in diversifying economies, driving innovation and growth, and delivering family-supporting jobs.
This white paper examines how five states: Indiana, Michigan, New York, North Carolina, and Ohio have structured durable, regionally based systems for economic development, and what lessons California can apply.
Sidebar 1: California’s “Lucky Accidents”
For decades, California’s economic growth has been shaped by historical accidents and moments of opportunity, which then scaled into global industry strengths:
- Gold Rush (1849): The discovery of gold in the Sierra foothills brought population growth, capital, and infrastructure development, including the transcontinental railroad linkages over the Sierra Nevada (built largely by Chinese labor and funded by a Civil war distracted Federal government).
- Oil boom (1890s-1930s): The discovery of oil in the Los Angeles basin and Kern County created an oil boom lasting decades as California was the nation’s largest oil producing state in the early 20th century. The state still produces over 100 million barrels of oil per year.
- Hollywood (1910s–1920s): Year-round good weather and an escape from Thomas Edison’s motion picture patents were key factors in the shift in film making to the west coast (although Charlie Chaplin’s filming in the Bay Area’s Niles Canyon was also an early competitor). Ultimately, Los Angeles became the global center of film and entertainment.
- Aerospace & Defense (WWII–Cold War): Beginning with the rapid military-fueled industrialization during after WWII and then Federal defense spending fueled the modern aerospace and defense industry (largely in Southern California but also in and around Silicon Valley).
- Silicon Valley (1950s onward): The return to Palo Alto by William Shockley from Bell Labs led to the first few dozen tech companies of what came to be known as “Silicon Valley” which was then fueled further by Federal R&D, shrewd Stanford tech park growth, and an entrepreneurial culture tied to risk capital.
These accidents in part created a “lock-in” trajectory for California’s many decades of economic growth. Each event – gold, oil, film, war, transistor invention, triggered investment that led to major industry growth and the creation of globally competitive industries and firms. The economic strength continues today as California is home to 3 of the 4 highest valuation companies in history, remains the global center for AI, and continues to capture major shares of venture capital and startup funding (California now receives nearly 70% of startup funding nationally).
Sidebar 2: Public Investments that Mattered
Beyond accidents of history, several important state and federal investments have laid the foundation for California’s long-term economic competitiveness:
- Master Plan for Higher Education (1960): Built a pipeline of skilled workers and innovators in an integrated approach across the UC, CSU, and Community College systems.
- State Water Project (1960s): Enabled major expansion in agriculture and population growth in arid regions, particularly Southern California.
- Infrastructure investments (throughout): Expanded freeways, ports, and airports all supported growth in various regions and the investment in high-speed rail and a state rail vision continues that legacy today.
At the same time, enduring assets like warm and moderate climate in many regions not only supported year-round film production and diversified crops but also tourism. This diversified economy has for decades drawn millions from throughout the country and world as visitors, students, and new residents to pursue a ‘California dream’.
Sidebar 3: Recent California Examples (2019–2025)
In recent years, California has begun to take more deliberate steps toward economic development with investment into high-profile projects through state funding programs:
- Investment through a state CalCompetes award in key pieces of economic infrastructure such as Pacific Steel (Kern County) – the state’s first steel mill in 50 years under construction in Kern County.
- Support for targeted growth of priority industry sectors included in the State Economic Blueprint industries through the California Jobs First Regional Investment Initiative. Examples include Vandenberg Spaceport – Expansion of aerospace and development of commercial launch activity as part of the Vandenberg Space Force Base, and funding for BEAM Circular and growth of circular bioeconomy manufacturing in the North San Joaquin Valley.
- Support for the clean energy transition through CEC’s Electric Program Investment Charge Program (EPIC) program which has provided over $1.2 billion in state and ratepayer funding for clean energy since 2012, unlocking over $10 billion in private funding. This includes over $230 million for the clean energy entrepreneurial ecosystem.
- The Governor’s signing of AB 940 which commits the state to “develop industry strategies for the strategic sectors identified in the California Jobs First State Economic Blueprint,” beginning with quantum computing.
Looking ahead, California must continue the momentum of California Jobs First and the growing recognition that proactive policies are needed to create and sustain quality jobs. Success will require more interagency collaboration and a multi-year commitment in industrial strategy and economic development as an all-of-government goal. Support for individual projects or businesses should continue but be clearly part of a broader strategy to grow strategic sectors as well as strengthen regional economic resilience.
To succeed in the long-run, California needs an economic development system that is durable—outlasting administrations and supported by reliable, year-over-year investment. Without such continuity, each new stand-alone program forces local leaders to scramble to rebuild coalitions and reapply for funding, without the certainty that funding will last beyond a single budget year. Stable, predictable investment creates efficiencies and ensures state action translates more quickly into results on the ground.
Many other states have already built more permanent economic development systems that support regional diversity and opportunity. These include public–private regional councils, state funding streams tied to regional priorities, distinct authorities and tools for regional agencies, and state economic development corporations. While no state or model is directly transferable, the examples below show how economic development can remain an enduring priority across political cycles.
Over the past six months, California Forward (CA FWD) has been meeting with regional leaders from across the state to think through possible options for a more durable economic development structure. As part of this initiative, CA FWD examined other state economic development and planning models across the U.S. In the white paper below, we lay out cross-cutting themes gleaned from looking at other state models, explore several individual case studies that seem particularly applicable to California’s unique governance and economy, and conclude with a roundup of key lessons to apply to policy in California.
Cross-Cutting Themes
From reviewing other states, several cross-cutting themes emerge that frame how different states structure and deliver regional economic development.
- Durability: Successful states put in place programs that last across administrations and budget cycles. Institutionalizing funding and structures can allow states to sustain momentum for economic development over a decade or more.
- Regional Empowerment: States that empower regional councils or partner organizations with authority and resources have seen stronger alignment between state priorities and local action. These states also require measurable outcomes in order to access ongoing state funding or support.
- Integrated Approaches: The most effective models connect workforce, infrastructure, land use, and industry development in common geographies and with shared strategies. This avoids siloed efforts and ensures comprehensive approaches to planning.
Case Studies of States
Indiana (READI)
Key takeaway: Locally defined regions, empowered through Regional Development Authorities, implement development plans using targeted tools and incentives.
Indiana’s approach to regional economic development is based on the creation of formal, multi-county governance structures known as Regional Development Authorities (RDAs). These entities are established voluntarily through local ordinances, allowing regions to self-identify based on history, governance, labor markets, and other data points to plan for growth and investment across jurisdictional boundaries.
The program began with 17 regions. In 2024, the public and nongovernmental entities that applied to the second round of the program “organically and voluntarily formed themselves into 15 unique regions.”
Based on the bottom-up interest in the 15 regions, the Governor recently recommended (though Indiana Executive Order 25-45) that the state establish “one unified set of demarcated regions for purposes of workforce and economic development policy implementation.” This is based on the notion that having different regional geographies across numerous state agencies not only creates confusion and unnecessary complexity, but it also makes it more difficult for coordination between the state, businesses, and local jurisdictions. Through this Executive Order, the Governor commissioned a careful study that measured the differences between regions defined locally and regions defined by commuting and determined the locally-derived regions perform best when combining both governance and economic attributes.
The state supports RDAs through direct funding of individual projects. While this has shifted in names over time, the current READI 2.0 program includes $500 million and is focused on making investments into regions with a requirement for a local 4:1 match (60% of which must be from private funding sources). The current portfolio has nearly 400 separate projects allocated across three “qualities” (life, opportunity, and place) and the state’s regions. Funding decisions are made based on regional development plans submitted by RDAs, which cover a wide range of project types including housing construction, downtown redevelopment, broadband expansion, and workforce training facilities.
RDAs play a central role in identifying priorities, coordinating proposals, and overseeing implementation. The program emphasizes measurable outcomes and encourages regions to focus on long-term impacts, such as increasing labor force participation or supporting industry clusters. The initiative catalyzes public and private investment by requiring local matching funds and partnerships.
Indiana’s model highlights how giving formal governance authority to regional entities, combined with access to flexible financing tools, can help align local priorities with state investment goals. For California, this example underscores the potential value of establishing voluntary, multi-jurisdictional structures with access to capital and a clear role in regional economic planning.
Michigan (Regional Prosperity Initiative)
Key takeaway: Prosperity Regions were established to break silos between issue areas, especially economic and workforce development. But despite effective planning and implementation for nearly a decade, the program shifted under a new Governor and the state’s renewed focus on rural areas and statewide metrics.
Michigan’s 10 Prosperity Regions, part of the Regional Prosperity Initiative from 2014, was an effort to promote collaboration across local governments, economic development agencies, workforce boards, and educational institutions. The program aimed to reduce duplication and increase coordination by encouraging the development of regional strategies that aligned with both local needs and state-level economic goals.
The program began out of a recognition that there were varying types of regional initiatives with diverse missions and reach – councils of government, planning councils, NGOs, private corporate organizations. To address these inefficiencies, the state defined ten Prosperity Regions and provided seed planning grants to help each region develop a five-year collaborative plan. These plans focused on shared priorities such as infrastructure investment, job creation, and education-to-employment pathways.
While the Regional Prosperity Initiative did not create new legal authorities or governance entities, it offered a state-recognized framework for voluntary cooperation and planning alignment (similar to California Jobs First). Each region included a broad table where diverse leaders (across government, business, community) could together identify regional goals and develop priority projects.
Funding under the Regional Prosperity Initiative supported a range of efforts, including small business support, regional marketing campaigns, and infrastructure planning. In some cases, the program was used to coordinate across previously siloed systems, such as aligning workforce development strategies with transportation investments or housing needs. The Michigan Infrastructure Council, for example, worked closely with regions to integrate water and transportation asset management strategies.
The program helped institutionalize a regional lens within existing local and state institutions without requiring statutory changes or the creation of new agencies. Although the Regional Prosperity Initiative’s dedicated funding ended after several years and some collaboratives wound down, many regions have continued to use its framework to guide planning and seek competitive grants. This demonstrates some degree of ongoing impact even after the program ended.
Michigan’s experience illustrates how a light-touch, state-endorsed framework can build the habit of regional coordination even in the absence of new authority structures. For California, it provides an example of how planning consistency, modest state investment, and formal regional identification can lead to improved alignment across sectors and jurisdictions. But it is also a cautionary tale that despite being an effective regional program, the lack of a durable state structure can mean that a change in political leadership may upend priorities and effectively end the statewide program.
New York (Regional Economic Development Councils)
Key takeaway: An enduring model under which the state established 10 economic regions, each with its own regional economic development council, and the state provided ongoing investment to implement regional plans and regionally-identified priorities through a Consolidated Funding Application.
New York State has implemented one of the most structured examples of regional economic development governance in the United States. Established in 2011, the Regional Economic Development Councils (REDCs) were introduced to decentralize economic planning and give regions more influence in shaping their own development priorities. Since 2011, the state has invested $8.2B in over 10,400 projects to implement these regional economic development plans. The power of ongoing investment reinforces the importance of regionalism. Knowing there will be implementation dollars to invest in regional priorities each year then keeps diverse stakeholders at the table.
The state is divided into ten REDC regions, each guided by a council composed of leaders from the private sector, academia, local government, and community organizations. These councils are responsible for identifying their region’s economic strengths and challenges and developing multi-year strategic plans that reflect locally driven goals. Council meetings are open to the public, and members are appointed by the Governor, with input from regional stakeholders. This model is intended to facilitate cross-sector collaboration while maintaining accountability to both state and local interests.
To connect regional strategies with state funding opportunities, New York created the Consolidated Funding Application (CFA). The CFA is a single online portal through which applicants can apply to multiple grant and incentive programs offered by more than a dozen state agencies. It streamlines the application process and makes it easier for businesses, nonprofits, and local governments to access funding aligned with state economic development programs.
The review process involves two levels of evaluation. First, each REDC scores project proposals based on how well they align with the region’s strategic plan. Second, state agencies assess the proposals using their own technical criteria, such as feasibility, financial readiness, and regulatory compliance. Projects that meet both regional and agency priorities receive higher scores. Since its launch in 2011, the CFA process has directed over eight billion dollars in state resources to more than ten thousand projects. These investments span a wide range of sectors and communities, including support for advanced manufacturing, downtown revitalization, agriculture and food systems, tourism infrastructure, and workforce training.
The REDC model and the CFA are a planning, funding, and evaluation system within a single framework. Each year, REDCs are expected to submit progress reports and update their strategic plans to reflect changing conditions or new opportunities. While the councils do not have statutory authority, their recommendations carry significant weight in funding decisions. The state’s approach seeks to reward regions that demonstrate thoughtful planning, strong local engagement, and a track record of implementation.
The model remains one of the most mature efforts in the country to coordinate regional economic planning with state investment. For California, New York’s regional economic development councils and consolidated funding application offer lessons in how to operate in a way that is both bottom-up and top-down: facilitating planning and strategic priority setting at the regional level, and then providing consistent and coordinated support and evaluation for regional plans from the state.
North Carolina (Prosperity Zones)
Key takeaway: A model that directly connects economic and workforce development goals by requiring state agencies and the Community College system to be co-located in each of the 8 regions to better coordinate and connect state resources to regional needs.
North Carolina created eight Prosperity Zones in 2014 to provide consistent geographic areas for coordinating economic development, workforce, and infrastructure efforts. Each zone hosts a regional office staffed by representatives from key state agencies including Commerce, Transportation, Environmental Quality, NCWorks, and the Community College System. Some zones have advisory boards but those are not required.
Prosperity Zones centralize coordination but do not have statutory authority over local governments. They function more as access points for communities seeking state support and help align local projects with statewide programs.
Ohio (JobsOhio)
Key takeaway: Offers an unusual model for durable financing for economic development, in that the state established a private economic development corporation in 2011 funded from profits on liquor sales which are then used to support investment in regional projects. The program operates through seven different partner organizations across the state but has been criticized for providing lucrative tax incentives without sufficient oversight.
JobsOhio is a private, nonprofit economic development corporation established in 2011 to drive business growth and investment across the state. Unlike most state-run agencies, JobsOhio is structured as an independent entity, funded through profits from the sale of liquor as part of the state’s liquor franchise (not liquor taxes which go to the State treasury). This funding source provides a long-term and relatively stable revenue which is outside the traditional appropriations process. This funding design gives JobsOhio durability across political administrations while the structure as a private nonprofit entity gives it flexibility and agility.
JobsOhio was established under state statute precisely to be able to contract with the state to carry out economic development programs and functions that previously had been run out of a state development department (including business attraction). JobsOhio does have some state oversight per its statute, including the requirement to submit annual reports and provide certain records such as incentives proposals and executive compensation.
In 2025, the funding agreement between the state and JobsOhio extended from 2038 to 2053. This extension was not without controversy in part due to the financial arrangement of the entity. In the creation of JobsOhio, they were sole sourced as the entity to control the state’s liquor monopoly (and floated bonds to cover the $1.4 billion they paid for the lease). JobsOhio receives hundreds of millions of dollars annually, much of which it uses to provide lucrative tax incentives to individual companies. Critics of the organization and extension raised concerns about the privatized structure reducing direct public oversight and insufficient benefit to taxpayers. Supporters argued that its independence allows for greater agility and competitiveness compared to traditional state agencies.
JobsOhio offers lessons about state/regional coordination around business attraction, including preparing bids to identify industrial land that is ready for development within days, not years. Through this type of coordination, JobsOhio was successful in luring California aerospace startup Joby Industries to build its main manufacturing facility in Ohio as part of the commercial expansion of Joby Industries.
JobsOhio also operates through a regional network model. The state is divided into seven regions, each served by a designated regional partner organization (such as Team NEO in Northeast Ohio and REDI Cincinnati in Southwest Ohio). These regional partners provide localized expertise and act as on-the-ground conveners of business, civic, and government stakeholders. Together, JobsOhio and its partners focus on attracting and retaining companies, supporting industry clusters, and advancing workforce and site development initiatives.
Like many economic development entities, JobsOhio has identified nine industries critical to the state’s competitiveness—advanced manufacturing, aerospace and aviation, automotive, energy and chemicals, financial services, food and agribusiness, healthcare, logistics and distribution, and technology. The sector focus helps concentrate resources where Ohio has existing strengths and growth opportunities. Yet the bulk of the agency effort is focused on funding individual projects at specific companies.
JobsOhio also administers a suite of flexible financing tools, including loans, grants, and tax credits, which are used to catalyze private investment and incentivize job creation. The organization has played a key role in securing large-scale corporate investments such as Intel’s semiconductor fabrication facilities, Honda’s electric vehicle and battery initiatives, and numerous advanced manufacturing expansions across the state.
For California, JobsOhio provides an example of how a quasi-public, privately funded model can give regions stable resources, sector focus, and long-term planning continuity. Its regional partner system underscores the value of embedding statewide strategy in locally grounded organizations, while its use of independent financing mechanisms highlights one path to reducing reliance on volatile budget appropriations. JobsOhio also provides
Oregon (Portland’s Metro)
Key takeaway: State land use law provides limited land use authority to an elected regional government for the state’s one major metropolitan area (Portland) whose authority is focused on maintaining an urban growth boundary and providing key regional services.
The State of Oregon is unique nationally as it has the only directly elected regional government in the country in the state’s largest metropolitan region, Portland. This regional entity – Metro – is responsible for managing key regional functions such as transportation planning, waste disposal, and—most notably—some elements of land use.
The most relevant and instructive feature for California is not Metro’s structure as an elected body, but its shared land use authority. Through Oregon’s statewide land use planning system, Metro has the authority to draw and maintain the urban growth boundary that determines where development can occur in the Portland region. This authority is not absolute. Local governments continue to control zoning and permitting. But they are legally required to align their local land use and housing plans with Metro’s regional strategy.
This structure enables Metro to coordinate planning across multiple jurisdictions without entirely displacing local control. Local governments must demonstrate that their plans comply with Metro’s growth management goals, which include housing production targets, transportation investments, and environmental preservation. In return, Metro provides technical support and policy guidance to ensure consistency and reduce conflict across cities and counties.
Metro’s approach demonstrates how regional coordination can be implemented through shared authority and aligned planning requirements rather than through centralized control. The system creates legal and policy incentives for jurisdictions to plan together, particularly on complex, cross-boundary issues such as housing, transit, and climate resilience.
For California, where local control over land use often limits regional cooperation, Oregon’s experience offers a potential model for balancing autonomy with shared accountability. Embedding regional planning requirements within broader state systems and creating structures that support cross-jurisdictional coordination could help advance more integrated and sustainable development across diverse regions.
Because Metro’s authority is embedded in Oregon’s broader land use system, it is supported by statewide policies that require consistency between local and regional planning. This enables the region to pursue cohesive strategies for housing supply, infrastructure investment, and environmental management.
Pennsylvania (Ben Franklin Technology Partners)
Key takeaway: A State funded regional innovation network that provides ongoing support for innovation economies in distinct regions through a network of four nonprofits supporting early-stage companies.
Established in the 1980s, Pennsylvania’s Ben Franklin Technology Partners is a network of four regionally based nonprofit centers focused on advancing innovation and supporting early-stage companies. Each center serves a distinct geographic area and collaborates with state agencies, academic institutions, and investors to deliver technical assistance, seed funding, and commercialization support. Ben Franklin Technology Partners is the State of Pennsylvania’s technology-based economic development program and is funded in partnership with the state’s Department of Community and Economic Development.
Independent analyses show a strong return on investment. Clients generated $2.4 billion in revenue and secured $1.1 billion in follow-on financing from state investments of $200 million dollars into emerging businesses.
Lessons and Opportunities for California
While California’s economy and regions are unique, lessons from these models suggest several paths for improving coordination, funding alignment, and long-term capacity for state and regional economic development.
Lesson 1: Consolidate State Economic Development Activities In One Agency
Key takeaway: There is value in consolidating the current portfolio of economic development programs and activities under a single agency structure.
Across the United States, most states have a formal state economic development agency that is independent of the Governor. While there is nonetheless a tendency to distribute economic development in multiple agencies, there is typically a lead agency for business retention and attraction.
In California, the current lead state entity for economic development is the Governor’s Office of Business and Economic Development (GO-Biz). GO-Biz was established in 2008 by Governor Brown in 2008 “to serve as California’s single point of contact for economic development and job creation efforts.” GO-Biz and is an arm of the Governor’s office rather than an independent agency with a secretary confirmed by the Legislature. While GO-Biz has many of the functions found at other state economic development agencies, the staffing at GO-Biz has fluctuated in recent years. While most of GO-Biz staff are now civil service (rather than Governor appointees) the office still lacks some of the greater permanence found in other state agencies. Current efforts such as CA Jobs First are a good step in this direction but are time-limited or advisory in nature. For example, the funding and staffing for the regional outreach roles for CERF (now Jobs First) are no longer in place. Establishing GO-Biz as a more formal state economic development agency with consistent funding and permanent regional offices or functions could provide California with a more durable framework to balance local autonomy with statewide coherence.
The following are some of the benefits of consolidating economic development functions into a single entity:
- Set a statewide economic strategy: easier to articulate the interconnected long-term priorities such as climate resilience, inclusive growth, and industry diversification.
- Ensure funding alignment: coordinate across state agencies so that workforce, infrastructure, housing, and business incentive dollars reinforce regional priorities rather than working at cross-purposes.
- Provide technical support: offer planning assistance, data tools, and capacity-building to regions with fewer resources.
- Institutionalize accountability: require annual regional plans, progress reports, and measurable outcomes tied to state investment.
Lesson 2: Establish Formal Relationship Between the State and Regions
Key takeaway: It is important to have a clear connection between statewide economic development efforts and specific regional activities, such as through formal regional arms of the state agency that coordinate state goals, tools, and investments with regional implementation.
Many states have formally defined regional arms of the state economic development agency. These regional divisions are not just administrative boundaries on a map, but institutional structures with authority, staffing, and budgets that enable regions to implement development strategies in alignment with statewide priorities.
The regional arms, in turn, would serve as the connective tissue between the state and local communities. Depending on how they are structured in statute, they could:
- Represent defined geographies: based on economic regions, not just political or marketing boundaries.
- House cross-sector councils: including business leaders, workforce boards, local governments, and community organizations – similar to those found in New York, a state similar in economic size and diversity to California.
- Develop multi-year strategies: rooted in regional strengths and needs, which guide both state and federal investments.
- Manage competitive and block grants: balancing baseline funding with performance-based incentives.
Other states demonstrate a range of design options. In some cases, regional entities are defined clearly in law (as in New York’s REDCs or Indiana’s RDAs). In others, they are lighter touch, serving more as convening frameworks (as in Michigan’s Prosperity Regions). The common thread is that regions have a recognized role in shaping strategy, aligning resources, and demonstrating outcomes.
For California, a single state economic development agency with regional arms would bring several advantages:
- Coherence: reduce fragmentation across dozens of programs and agencies.
- Equity: ensure less-resourced regions have access to capacity and technical support.
- Stability: provide continuity across political administrations.
- Scalability: allow bottom-up strategies to inform state-level policy and investment in a consistent way.
Lesson 3: Establish and Define Consistent “Regions” for Economic and Workforce Development
Key takeaway: California should consider establishing one consistent set of regional boundaries across workforce and economic development programs, leveraging the recent experiences with Jobs First, K-16 collaboratives, and other efforts while adjusting as appropriate from experiences on the ground.
California has various regional boundaries across its economic and workforce development programs, as well as other planning efforts that vary by program. While there is some coordination between specific time-limited programs – such as between Jobs First and K-16 regions–there is no long-term structural coordination between these areas. In addition, small business development centers, workforce boards, air districts, Metropolitan Planning Agencies, community college consortia, and more all create a patchwork board of regional boundaries and activities that require significant time and effort just to track the overlapping priorities and investments. This process is not only inefficient but also costly, with significant staff time spent attending meetings just to stay on top of the current efforts.
There are several potential models to establish more streamlined and consistent regions. Indiana established locally defined regions but is now moving to institutionalize those regional boundaries after a review of how regional-defined boundaries combine objective analytic metrics (such as commute patterns) with more subjective metrics such as existing governance institutions and organizational relationships. New York’s approach is top-down where the regions were defined by the Governor. While this approach is durable, it may lack local support which would be critical for success in California.
Whichever approach to regional boundaries is taken, the goal is to have one set of regions that supports various related policy goals and initiatives. That reduces duplication of effort and inefficiencies.
Lesson 4: Establish Regional Economic Councils with Dedicated Funding
Key takeaway: California could establish regional economic councils (initially in regions that self-select) with dedicated funding, clear accountability for outcomes, and defined seats.
Enduring regional collaboration depends on institutions with continuity, mandate, and resources rather than ad hoc partnerships or temporary programs. Regional councils, authorities, and joint powers entities serve as the mechanisms through which cross-sector collaboration can be sustained, allowing public, private, and civic actors to engage in long-term planning and implementation.
Across various states, such institutional anchors function as the organizational backbone for translating shared strategy into investment pipelines. Their persistence across funding cycles enables learning, alignment, and accountability. These are key ingredients for regional systems that compound rather than reset each decade.
Adopting the concept of a regional council in California could leverage the experience of New York, though California may consider a less top-down approach with members selected both locally and by the state (as opposed to having all seats selected by the Governor). Such a council might also include specific seats (e.g. representing specific entities like local governments, higher education, Community Colleges, Air Districts, as well as the California Jobs First Conveners).
There are also numerous existing regional entities whose work could be strengthened to support more consistent planning and coordination across jurisdictions. These include joint powers authorities (JPAs), Regional Development Authorities, or other collaborative governance models. These structures can provide regions with a clear mandate to organize investments, align multi-sector strategies, and engage more effectively with state and federal partners. When designed with flexibility, they can adapt to local conditions while fostering accountability and continuity.
Indiana and Michigan provide examples of how regional entities, even when created voluntarily or without additional legal authority, can serve as a stable institutional foundation for cross-sector collaboration, coordinated project pipelines, and long-term economic development planning.
Establishing clear roles, responsibilities, and funding mechanisms for these entities may help California regions sustain efforts beyond individual grant cycles and strengthen alignment between local action and statewide priorities.
Lesson 5: Maintain Transparent and Easily Accessible Economic Data
Key takeaway: California could improve the collection, reporting, transparency, and dissemination of state and regional economic development data, such as through establishing single online portals that include both state and regional economic data.
Data systems form the informational foundation of effective regional governance. Transparent, standardized, and regularly updated regional datasets make performance visible, align incentives, and facilitate evidence-based decision-making. States that maintain open data platforms and common metrics create a shared factual basis for both competition and collaboration among regions. These information systems operate as a governance mechanism, reducing asymmetries and enabling both local innovation and statewide learning.
Developing a centralized, open-data platform with region-specific dashboards could help provide consistent and timely information on key indicators such as labor market trends, housing affordability, infrastructure investment, and economic performance. California has elements of this system already through its LMID site. But in the case of Jobs First, each region funded, procured, and analyzed separately economic data. This led to not only different definitions of how to classify industries (i.e. variations in NAICS used for classification) as well as variations in the extent to which the region prioritized local-serving or traded sectors.
Establishing a more unified state data system could not only lead to greater consistency in definitions but also better selection of priority investments. Leaders in the state legislature and local officials as well can benefit from more consistent data that tells the story of the impact of investments.
States like New York and Indiana have implemented standardized metrics to track regional progress, offering a reference point for measuring outcomes and refining strategies over time. An improvement on the concept from other states would allow any user to analyze their own region’s economic performance and how that region’s portfolio of industries relates to and supports the state’s overall economy.
Lesson 6: Provide Reliable Annual Funding and a More Unified Approach to Secure It
Key takeaway: California should provide stable, annual funding streams for regional economic development activities, including implementing priority projects in regional economic plans, and through better alignment state funding programs.
Short-term or one-time funding cycles can limit a region’s ability to build lasting strategies and implement complex projects. Structured programs that support regions through multiple stages—including planning, pilot projects, implementation, and evaluation—may help build institutional capacity over time. Models such as Indiana’s READI program and New York’s Downtown Revitalization Initiative provide examples of how multi-phase support can encourage longer-term commitment and improve the durability of regional development efforts.
California could consider developing a unified funding application system, similar in design to New York’s Consolidated Funding Application, to improve consistency, reduce administrative burden, and streamline access to economic development resources across multiple state agencies. Such a system would allow applicants to submit proposals through a single portal, with projects evaluated based on both technical merit and alignment with regionally defined priorities. Integrating regional strategies into the funding review process may strengthen coordination between state investments and local planning efforts, encourage more cohesive project pipelines, and create clearer expectations for regional collaboration. This type of structure could also support greater transparency and accountability by establishing standardized criteria and improving visibility into where and how state dollars are allocated.
Lesson 7: Expand Regional Financing Tools and Explore New Authorities for Regional Entities
Key takeaway: California could maintain an ongoing set of effective financing tools available to regions (such as tax increment financing, bonding, and revenue-sharing), while also exploring ways to empower regional institutions to make decisions at the regional scale.
Expanding access to flexible financing mechanisms such as bonding authority, tax increment financing (TIF), or pooled revenue tools could help regions advance large-scale initiatives in areas like infrastructure, housing, and innovation. Indiana’s use of these tools through its Regional Development Authorities illustrates how targeted financial instruments can enable local and private investment while aligning with broader regional goals.
At the same time, Oregon’s establishment of a regional government with clear authority – management of an urban growth boundary – provides clarity on the mission of the regional government and helps all local governments align around a shared regional outcome. Effectiveness can flow from both funding certainty and clear authority. It may be time to try some of both approaches for regional economic development.
Conclusion
California’s regional diversity and local autonomy have long shaped its approach to economic development. While this decentralized model allows regions to tailor solutions to local needs, it can also result in inconsistent planning, uneven investment, and missed opportunities to maximize statewide impact. In short, there is insufficient institutionalization of a system of state and regional economic development.
Given the recent successes and investments through Jobs First and K-16, now is a time to prepare and set up an ongoing structure, especially given changing economic conditions.
California should move from a more ad-hoc approach driven by programmatic funding to a durable ‘regions-up’ system of economic development. By clarifying the role of state economic development, requiring regional lead entities on economic development, aligning state funding with regional plans, and ensuring consistent funding, California can build an enduring framework that outlasts political cycles and helps every region thrive. This is increasingly urgent given increased economic and climate shocks and ever-changing economic conditions.
Now is the time to institutionalize regional economic development as a permanent feature of California governance. Every region needs the tools, capacity, and stability to build shared prosperity. Just as California once turned gold, oil, weather, and silicon into global industries, we can now leverage regional collaboration and resilience as a next great competitive advantage.
Samanta recently earned a Master of Public Affairs at the University of California, Berkeley, Goldman School of Public Policy where she wrote her Capstone for CA FWD. Egon is CA FWD’s Regionalism Fellow.
