Duke University researcher Vivek Wadhwa went to Boulder, Colo., to learn why that community has become an entrepreneurial hub. The last paragraph of his resulting article for Bloomberg Business Week is worth noting:
When I ask longtime players about local government, they shrug. When I ask them about state government, the common refrain is that the best thing it can do is invest in education and otherwise stay out of the way. The lesson here is that it doesn’t take billions in government spending to create a thriving industry cluster. Instead, with a little luck and lots of hard work by residents, local economies can be shaped from the bottom up.
Wadhwa doesn?t say it, but another lesson is that billions in government spending would be counterproductive, since the government spends that money only after taking it away from private-sector actors.
Roy Cordato discussed this problem in July 2009 when he analyzed the impact of federal stimulus spending on North Carolina?s double-digit unemployment numbers:
