An ambitious economic development report, published by Brookings Metro on June 30^, 2026, lays out a plan and playbook for modernizing economic development through a structured shift from a state perspective to one that focuses on regions.

Based on hundreds of interviews with economic development directors from states and regions, the report by Mayu Takeuchi and Joseph Parilla, puts forward strong arguments for a shift in strategy and perspective, based on the idea that economies are regional “but governing systems are not.”

A fundamental message of the report is that many state economic development systems “were designed for an earlier era, when growth could be secured by attracting a large employer with the right incentive package.”

In addition to an over-reliance on incentives, and an under-reliance on private sector and philanthropic investment, the report cites current state economic development problems with fragmentation across states, agencies, regions and funding streams, as well as a reactive approach rather than one that is “strategic and proactive.”

The report provides multiple reasons that a regional focus makes more sense, given that “labor markets, housing markets, infrastructure systems, and supply chains operate primarily in regional economies.” Even though organization occurs around regional networks of “firms, workers, universities and civic institutions”, the authors note that these are  “uncoordinated and undercapitalized.”

To help states move forward, the report provides a “practical playbook” with concise advice that focuses on:  

• Defining direction: This includes market analysis and regional engagement to select specific clusters and economic opportunities that yield a competitive advantage. It also “requires combining rigorous market analysis with intentional regional engagement to move beyond broad sector priorities and toward precise, actionable cluster strategies,” 

• Making regions investable: The goal is for regions within the state to have “a long-term investment-ready economic strategy.” This means building regional capacity to coordinate with different sector partners “and ensure sustained alignment across strategy, investment and execution.”

• Aligning capital:  This requires realigning “fragmented funding streams to advance regional priorities.” It also has the goal of achieving “co-investment from businesses, philanthropy and local governments at a scale that can drive meaningful economic transformation.”

Other needed elements include adopting “clear outcome metrics”, building accessible data systems and distinguishing between effective strategies and those that should be adjusted or set aside. These efforts also require shared state-regional priorities and achievement of “strong relationships with regional leaders across the business, education and civic sectors.”  

Beyond the general advice offered in the report, the authors also include substantial specific guidance on the actions that will help facilitate a relatively complex shift in economic development focus. The report provides useful charts on the roles of different players within the economic development system, a chart of forces “shaping economic opportunity over the next five years,” and insights from states such as New York, Virginia and Indiana that have been focusing on a more regional approach.

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