Global Economies Disrupted, Local Communities Responding

Over the past two to three years, the global economy has been rocked by unprecedented disruptions. Covid-19 has shifted how and where we work. The pandemic and geopolitics have snarled trade and supply chains. Technology has become more ingrained into the global economy—for both good and ill. All the while, the consequences of climate change continue to mount. The norms and assumptions of the post-Cold War international economic order have been called into question.

In mid-2020, the CSIS Economics Program launched Economy Disrupted, a live event series that convened prominent thought leaders to explore emerging disruptions in international economics. Building on a successful first season, we launched a second season of this program in 2021 to examine how four disruptive forces—trade, technology, climate change, and shifts in the workplace—are impacting the U.S. economy at the state and city level and what implications this has for U.S. international leadership.

Over the past year, we invited a diverse group of elected officials representing cities, states, and territories from across the United States to join us on Economy Disrupted. Although the 10 mayors, governors, and lieutenant governors we spoke with came from across the partisan and geographic spectrum, they all shared a deep commitment to addressing the local impacts of global disruptions. In contrast to the frequent partisan gridlock in Washington, the solutions advanced by these local, state, and territorial leaders are pragmatic, innovative, and consensus oriented.

Here are some of the key lessons learned from Season 2 of Economy Disrupted in the four topic areas we discussed in the program:

• Trade: Though trade has become a hotly contested issue in Washington, the subnational leaders we interviewed generally viewed trade as beneficial to their constituencies. As Governor Asa Hutchinson of Arkansas noted in Episode 1, “International trade and access to the global market is essential for a state like Arkansas—from agriculture to manufacturing, that access is critical.” Mayors and governors remain engaged in trade promotion and foreign direct investment attraction efforts to boost job growth in their jurisdictions. However, some guests, such as Governor Kate Brown of Oregon, noted that trade—though a net positive—must have its benefits shared more equitably. As she stated on Episode 3, “The key with trade is to have 'worker-first, worker-centered' trade agreements. What we have seen in the past was, frankly, 'worker-last' trade agreements.”

• Technology: Mayors and governors see technology as key to future economic growth in their communities. From a new innovation district that Mayor David Holt of Oklahoma City described in Episode 4 to the new university technology centers that Mayor Paige Cognetti of Scranton, Pennsylvania, highlighted in Episode 10, subnational leaders are investing in innovation as future drivers of their economies. However, barriers to local technological transformation remain. As Lieutenant Governor Eleni Kounalakis of California said in Episode 7, “We have whole areas within our state that are primed for economic development but need to have [broadband] access.” Mayor Kate Gallego of Phoenix noted in Episode 5 that, “The first thing I hear about when companies are looking here is the ability to hire the right talented workforce for technology.”

• Climate Change: The adverse impacts of climate change are already being felt by local, state, and territorial leaders. As Governor Lou Leon Guerrero of Guam shared in Episode 6, “Our greatest evidence of climate change is in our coral reefs . . . We are trying to protect everything we can with the coral reefs.” Subnational leaders see the frontline impacts of climate change in their communities, but also see opportunities to leverage the green transition for economic growth. As Mayor Nan Whaley of Dayton, Ohio, explained in Episode 2, “Job creation comes from climate change. We need to make the solar panels and the wind turbines and the electric cars.”

• Shifts in the Workplace: For mayors and governors, jobs remain both an ongoing challenge and opportunity. As Governor Christopher T. Sununu of New Hampshire described in Episode 8, addressing job loss and displacement during the pandemic was a major focus of mayors and governors. The deployment of federal funds under the Paycheck Protection Program, complemented by additional state and local aid to Main Street, was an important intervention that helped mitigate overall job loss. As the United States emerges from the Covid-19 pandemic, shifts in how and where we work are also poised to impact local communities. Mayor Mattie Parker of Fort Worth, Texas, captured the spirit shaping local leaders throughout the country in Episode 9, when she argued that small- to mid-size U.S. cities in the heartland can offer a new home to remote workers and businesses shifting away from high-cost big cities and coastal areas.

Beyond these lessons, the second season of Economy Disrupted showed us how important it is to go beyond the Beltway to see how local communities are facing the frontline impacts of the economic disruptions we discuss in Washington. The local and global are not often viewed together, but our conversations with leaders across the United States illustrate the appetite that cities, states, and territories have for engaging with global economic challenges. Reframing conversations within the Washington policy community around trade, technology, climate change, and jobs to center on communities on the margins is an essential part of advancing what the Biden administration calls “a foreign policy for the middle class.”

The strength of the United States comes from being greater than the sum of its individual parts. What was once 13 colonies is now over 50 states and territories, each with unique economies and policy solutions. And within these states and territories, thousands of municipalities serve as the foundation for U.S. economic power and attractiveness. As Season 2 of Economy Disrupted made clear, to address the global economic challenges of tomorrow, the Washington policy community must give voice to America’s cities, states, and territories today.

Matthew P. Goodman is senior vice president for economics at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Sarah Ladislaw is a senior associate (non-resident) with the Energy Security and Climate Change Program at CSIS. Aidan Arasasingham is a program coordinator and research assistant with the Economics Program at CSIS.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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