US Economic Development

US state and local economic development

States, counties, and cities across the United States are reimagining their economic futures. Leaders are striving to build stronger, more equitable, and more resilient economies in the face of diverse and unprecedented challenges—including the lasting effects of the pandemic and the acceleration of technological change.

This moment presents state and local leaders—and their business and civic partners—with immense opportunity but also poses significant strategic and operational hurdles. How can leaders design strategic programs to help them accomplish their desired goals—whether securing the right skills and talent, fueling productivity and innovation, building vibrant places and communities, or ensuring an inclusive and sustainable future? How can state and local organizations collaborate to achieve target outcomes, measure success, and bring lasting change?

For more than 50 years, we have worked side-by-side with public, private, and social sector leaders across the country on economic development and recovery efforts. Among the many important lessons from this work is that inclusion and growth, or sustainability and growth, are not conflicting goals. In fact, insufficient economic inclusion and environmentally unsustainable approaches are threats to prosperity—and therefore these goals are best pursued in tandem.

The following knowledge collection represents this experience and understanding, as well as independent research on what works, including the latest economic analyses from our internal think tank, the McKinsey Global Institute; a range of capabilities and action-oriented tools that we have developed to help state and local leaders tackle critical economic development challenges; and our deep expertise in managing and delivering on outcomes. Taken together, these insights can help state and local leaders and their business and civic partners to lay the foundation for healthy, and equitable, economies.

Productivity and Innovation 

Report - McKinsey Global Institute

Will productivity and growth return after the COVID-19 crisis?

– Bold innovation by some firms under pressure of the pandemic could deliver a productivity dividend, but that depends on corporate action broadening and robust demand.
Article

Lessons from the past on how to revive the US economy after COVID-19

– Examining what worked in response to previous crises can help policy makers as they make plans to revive economic activity.

Skills and Talent 

Podcast - McKinsey Global Institute

Forward Thinking on unemployment with Sir Christopher Pissarides

– The Nobel Prize–winning economist talks job loss and creation after the pandemic, plus what economic researchers should be addressing today.
Podcast

Creating a postpandemic recovery for women in the workplace

– COVID-19 has pushed working women to the point where many have dropped out. Here’s how companies can help.
Report - McKinsey Global Institute

The future of work after COVID-19

– The pandemic accelerated existing trends in remote work, e-commerce, and automation, with up to 25 percent more workers than previously estimated potentially needing to switch occupations.
Report - McKinsey Global Institute

The future of work in America: People and places, today and tomorrow

– The health of local economies today will affect their ability to adapt and thrive in the automation age.
Report - McKinsey Global Institute

The future of women at work: Transitions in the age of automation

– Concerted and creative new solutions are needed to enable women to seize new opportunities in the automation age; without them, women may fall further behind in the world of work.
Article

Creating an effective workforce system for the new economy

– Governments have an important role to play in building a deeper pool of qualified workers and fueling economic growth.

Vibrant and Sustainable Communities 

Report

How cities can adapt to climate change

– Research identifies 15 proven ways that urban areas around the world can adapt to climate risk.
Article

Rural rising: Economic development strategies for America’s heartland

– There is no one-size-fits-all economic development strategy for rural communities. How can local leaders—including governments, businesses, and individuals—put rural regions on track to thrive?
Article

Preserving the largest and most at-risk supply of affordable housing

– In the United States, naturally occurring affordable housing (NOAH) is at risk. To protect this critical asset class, stakeholders for federal, state, and local housing can all play a role.
Article

Selecting infrastructure projects for the next normal

– Infrastructure projects can create jobs and spur economic growth—both critical as the world reckons with the fallout from COVID-19. But budgets are tight, so which projects should be prioritized?

Equitable and Inclusive Futures 

Report - McKinsey Global Institute

The economic state of Black America: What is and what could be

– Closing racial gaps across the economy is not only about righting historic wrongs. It is also about choosing a more dynamic future and realizing the full potential of a massively underutilized source of talent, to the benefit of all Americans.
Report

The case for inclusive growth

– US leaders across sectors have an opportunity to improve economic performance—and bolster individual and community well-being—through investments that embed equity into the development process.
Podcast

Investing in Black economic mobility

– Racial equity and inclusive growth can drive economic mobility and a postpandemic recovery.
Article

America 2021: The opportunity to advance racial equity

– To America’s leaders, innovators, and changemakers: the task of building a more perfect society needs your help.
Article

Achieving an inclusive US economic recovery

– COVID-19 has most affected workers who were already vulnerable. Unless bold action is taken, the postpandemic recovery will further exacerbate inequality.
Article

Building supportive ecosystems for Black-owned US businesses

– The right business ecosystems can mitigate or negate the effects of structural obstacles to business building for Black business owners—and add $290 billion in business equity.
Article

COVID-19: Investing in Black lives and livelihoods

– The unfolding public-health and possible economic disaster of the pandemic will disproportionately affect Black Americans—unless stakeholders respond immediately.

How to Deliver 

Article

How economic-development organizations can seize funding opportunities

– By harnessing funds from the American Rescue Plan Act, economic-development organizations have an opportunity to effect significant change in their communities—if they can organize themselves first.
Podcast

Creating a more resilient and responsive government

– The pandemic has put demands on the public sector that are likely to increase.
Article - McKinsey Global Institute

COVID-19: Making the case for robust digital financial infrastructure

– The pandemic has been a tough, real-life stress test for government disbursement schemes, highlighting opportunities but also gaps and vulnerabilities.
Article

Rethinking resilience: Ten priorities for governments

– Due to the pandemic, governments are under increased pressure to act quickly and at scale. By reimagining how they work, they can create resilient societies and public services for the next normal.
Article

Using a crisis nerve center to help reopen the economy

– To manage the next phase of responses to the COVID-19 pandemic, government leaders can consider the skills needed to lead and contribute to the effort.

Additional Insight

Article

Reimagining the postpandemic economic future

– As the COVID-19 crisis continues to devastate US lives and livelihoods, policy makers are challenged to emerge from it in a way that lays a foundation for a strong, healthy economy in the long run.

Featured Experts

Wan-Lae Cheng
Partner, Washington DC
Supports private-, public-, and social-sector organizations, including – educational institutions, state and local governments,...
John-Paul (JP) Julien
Associate Partner, Philadelphia
Serves US federal, state and city governments on inclusive economic-development topics and supports private-, public-, and social-sector...
Mike Kerlin
Partner, Philadelphia
Leads McKinsey’s work in infrastructure finance globally and in North America. Works with investors—including infrastructure private...
Jonathan Law
Senior Partner
Supports education organizations and state, provincial, and local governments design and implement major initiatives that advance...
Shannon Peloquin
Partner, Bay Area
Supports major utilities, transportation, and infrastructure organizations to enhance long-term strategy and investments, operations,...
Duwain Pinder
Partner, New Jersey
Serves colleges and universities on strategy and performance improvements and supports organizations across sectors on racial...
Saurabh Sanghvi
Partner, Bay Area - Silicon Valley
Partners with public, private, and not-for-profit organizations around the world to set bold strategies and execute plans that...
Shelley Stewart III
Partner, New Jersey
Helps companies accelerate growth and design new go-to-market models in the private equity, advanced industries, and technology...
Sarah Tucker-Ray
Partner, Washington DC
Helps government leaders deliver better outcomes for the public, including improved operations, enhanced customer experience,...

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