Giving Compass' Take:

• Robert D. Atkinson, Mark Muro, and Jacob Whiton argue that "growth centers" in the heartland can spread tech innovation to areas that have been left behind. 

• Are you in a position to support growth centers? Which communities are the best candidates for growth centers? 

• Read an argument for more philanthropy in the heartland. 

Rather than growing together, the nation’s regions, metropolitan areas, and towns have been growing apart. That has been a shock for mainstream economists and policymakers who have long trusted the self-regulating nature of the regional economics market. And indeed, for much of the 20th century, market forces had tended toward “convergence” among communities—reducing wage, investment, and business formation disparities between more- and less-developed regions.

However, that trend began to break down in the 1980s, as digital technologies and innovation moved to the center of economic activity. Intense new demands for talent and insights increased the value of “agglomeration” economies, unleashing self-reinforcing dynamics that increasingly benefited big, coastal regions, often to the detriment of cities and metro areas in other parts of the nation.

Amid these conditions, convergence gave way to “divergence.” A top tier of tech- and innovation-heavy metro areas such as Boston, San Francisco-San Jose, and Seattle began to consistently outperform less-tech-based places on measures of innovation-driven prosperity.

The result is a crisis of regional imbalance.

Markets alone won’t solve the problem—“place-based” interventions will be essential. When the economy was “converging,” it was easy to assume that any problems of regional unevenness would naturally resolve themselves. However, the rise of newer, innovation-oriented economic theories has given more attention to the power of local “agglomeration” effects, by which large benefits accrue to firms when they locate together in urban areas. In that context, “bottom-up” economic development efforts likely will not change these patterns by themselves, in part because the resources states and cities can bring to bear are limited. Accordingly, the U.S. needs not just nation-scaled solutions for its regional imbalances but place-based ones as well.

The nation should counter regional divergence by creating eight to 10 new regional “growth centers” across the heartland. The time is right for, among other initiatives, a 21st century update of “growth pole” strategy—the 1960s and 1970s emphasis in regional economic planning that called for focusing transformative investment on a limited number of locations to catalyze the takeoff of those regions and the nation.

Read the full article about growth centers and tech innovation by Robert D. Atkinson, Mark Muro, and Jacob Whiton at Brookings.