ABSTRACT
Development practice in the United States accepts economic growth as a positive force and attempts to facilitate the growth process. Development organizations have referenced the American Economic Development Council (AEDC) definition for many years without addressing the fact that it is inconsistent. The existence of scarcity is a fundamental part of the economic process; scarce resources are used to satisfy competing ends. Economic developers need to grasp four fundamental concepts to learn how to use theory effectively in economic development practice. Developers face an apparent contradiction given the conventional views of theory and practice, as follows: theory is considered abstract thinking that simplifies reality, whereas practice involves human action that changes reality in particular ways. The growth-development distinction also suggests contrasting economic growth to sustainable development. Entrepreneurship theories identify entrepreneurs or, more precisely, the entrepreneurial function as the basic category of economic development. Regional innovation theories consider networks of firms and other actors influenced by institutions as their basic categories.
