During the 1960's and 1970's, the primary economic development

Question

During the 1960's and 1970's, the primary economic development strategy of local governments in the United States was to attract manufacturing industries. Unfortunately, this strategy was usually implemented at another community's expense: many manufacturing facilities were lured away from their moorings elsewhere through tax incentives and slick promotional efforts. Through the transfer of jobs and related revenues that resulted from this practice, one town's triumph could become another town's tragedy.

In the 1980's the strategy shifted from this zero-sum game to one called “high-technology development,” in which local governments competed to attract newly formed high-technology manufacturing firms. Although this approach was preferable to victimizing other geographical areas by taking their jobs, it also had its shortcomings: high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce, and there simply are not enough high-tech firms to satisfy all geographic areas.

Recently, local governments have increasingly come to recognize the advantages of yet a third strategy: the promotion of homegrown small businesses. Small indigenous businesses are created by a nearly ubiquitous resource, local entrepreneurs. With roots in their communities, these individuals are less likely to be enticed away by incentives offered by another community. Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship.   1 
 1. The primary purpose of the passage is to

(A) advocate more effective strategies for encouraging the development of high- technology enterprises in the United States 
(B) contrast the incentives for economic development offered by local governments with those offered by the private sector 
(C) acknowledge and counter adverse criticism of programs being used to stimulate local economic development 
(D) define and explore promotional efforts used by local governments to attract new industry 
(E) review and evaluate strategies and programs that have been used to stimulate economic development

2 
 2. The passage suggests which of the following about the majority of United States manufacturing industries before the high-technology development era of the 1980's?

(A) They lost many of their most innovative personnel to small entrepreneurial enterprises. 
(B) They experienced a major decline in profits during the 1960’s and 1970’s. 
(C) They could provide real economic benefits to the areas in which they were located. 
(D) They employed workers who had no specialized skills. 
(E) They actively interfered with local entrepreneurial ventures.

3 
 3. The tone of the passage suggests that the author is most optimistic about the economic development potential of which of the following groups?

(A) Local governments 
(B) High-technology promoters 
(C) Local entrepreneurs 
(D) Manufacturing-industry managers 
(E) Economic development strategists

4 
 4. The passage does NOT state which of the following about local entrepreneurs?

(A) They are found nearly everywhere. 
(B) They encourage further entrepreneurship. 
(C) They attract out-of-town investors. 
(D) They employ local workers. 
(E) They are established in their communities.

5 
 5. The author of the passage mentions which of the following as an advantage of high-technology development?

(A) It encourages the modernization of existing manufacturing facilities. 
(B) It promotes healthy competition between rival industries. 
(C) It encourages the growth of related industries. 
(D) It takes full advantage of the existing workforce. 
(E) It does not advantage one local workforce at the expense of another.

Skywalker18 · Accepted Answer

Took 6 mins 15 seconds, including 2 mins 15 seconds to read

1. The primary purpose of the passage is to
(E) review and evaluate strategies and programs that have been used to stimulate economic development - it discusses three strategies

2. The passage suggests which of the following about the majority of United States manufacturing industries before the high-technology development era of the 1980's?
(C) They could provide real economic benefits to the areas in which they were located. -"Through the transfer of jobs and related revenues that resulted from this practice, one town's triumph could become another town's tragedy."

3. The tone of the passage suggests that the author is most optimistic about the economic development potential of which of the following groups?
(C) Local entrepreneurs - the last para talks only good about them

4. The passage does NOT state which of the following about local entrepreneurs?
(C) They attract out-of-town investors.

5. The author of the passage mentions which of the following as an advantage of high-technology development?
(E) It does not advantage one local workforce at the expense of another. -"Although this approach was preferable to victimizing other geographical areas by taking their jobs"

nikhilbhide · Answer

Why answer of first question (primary purpose of passage) is E and not C. What is the subtle difference between both of them? Pls explain

aceGMAT21 · Answer

Hi  nikhilbhide ,

To answer your question we first need to understand the structure of the passage.

1st PARA :  During the 1960's and 1970's, local governments in the United States were looking for the primary economic development of their community/town. They opted a strategy -- this strategy was usually implemented at another community's expense.

2nd PARA :  In the 1980's the strategy shifted from this zero-sum game to one called “high-technology development,” in which local governments competed to attract newly formed high-technology manufacturing firms.

3rd PARA :  third strategy: the promotion of homegrown small businesses.

As can be understood from the above structure and reading the details of each para, the author is talking about 3 strategies out of which the first 2 did not worked well due to some limitations. The tone of author for the 3rd strategy is positive and optimistic. So, local governments have increasingly come to recognize the advantages of it.

Now, coming to the question,
 1. The primary purpose of the passage is to

(C)  acknowledge   and   counter adverse criticism   of programs being used to stimulate local economic development   
 The author is simply reviewing and evaluating the 3 strategies as mentioned in the passage. Also, only the limitations are mentioned for the first 2 of the above mentioned strategies. There is no direct and adverse criticism which is countered by the author. Also, only the 3rd strategy is acknowledged by the author, because of the optimistic view of the author we can say this. So option C is incorrect.

(E) review and evaluate strategies and programs that have been used to stimulate economic development 
 Correct Answer. As discussed above.

Hope it clears your doubt. Let me know if you have any questions.

Thanks.
-Varun

praveenmittal95605 · Answer

Could you please share the explanation for Q 3 and 4

GMATNinja · Answer

In the first paragraph, the author describes the shortcomings of the strategy used in the 60s and 70s (attracting manufacturing industries). In the second paragraph, the author describes the shortcomings of the strategy used in the 80s ("high-technology development"). Then in the third paragraph, the author discusses the  advantages  of a third strategy (the promotion of homegrown small businesses, which are created by local entrepreneurs).

To summarize, the author discusses the  shortcomings  of two strategies and then the  advantages  of a third strategy. "  are less likely to be enticed away by incentives offered by another community. Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship." Thus the author seems most optimistic about the third strategy, which supports local entrepreneurs.

As for question 4, refer to the last paragraph:

debtanuB · Answer

GMATNinja   GMATNinja Two

for the 2nd question, I need you help..!!

I eliminated A,B, & D as it cannot be inferred from para 1. Between C & E, I choose E my reason-
Para 1 last line- "Through the transfer of jobs and related revenues that resulted from this practice, one town's triumph could become another town's tragedy." Made me think another town's tragedy=bad effect of industry(after being invited by the govt.)!!

Later on I read the 1st line of para 1- "During the 1960's and 1970's, the primary economic development strategy of local governments in the United States was to attract manufacturing industries." It made me think that maybe this is the right reason for choice C to be the right one. We can infer that industries were invited in an attempt by local govt. to improve their locality's economy. Though I'm not sure about this!?

Please help me out!!

Thanks & Regards~

GMATNinja · Answer

The first paragraph implies that "jobs and related revenues" are moved from Town A to Town B when a manufacturing facility was lured to Town B from Town A (through tax incentives and slick promotional efforts). Now that Town B has the manufacturing facility, it will enjoy those "real economic benefits" (jobs and related revenues).

The areas in which the manufacturing industries  are located  (i.e. Town B) are the areas that enjoy those economic benefits. Meanwhile, the towns that LOSE the manufacturing facilities, etc., (i.e. Town A), LOSE jobs and related revenues. So Town B's triumph is Town A's tragedy.

As for (E), the passage doesn't say anything about negative consequences to  local  entrepreneurs once manufacturing industry comes to town. In other words, we have no reason to suspect that the movement of manufacturing from Town A to Town B will interfere with the local entrepreneurs in Town B -- or their entrepreneurial ventures.

The only "bad effect of industry" described in the passage is the loss of jobs and revenue in the former town when, for example, a manufacturing facility moves from one town to another.

I hope this helps!

GMATNinja · Answer

Question 5

Question 5 asks us to identify an advantage of high-technology development (HTD) mentioned in the passage. This type of development is discussed in the second paragraph. Much of this paragraph is devoted to a discussion of the shortcomings of HTD, but the author briefly mentions what appears to be a potential advantage of HTD in the second sentence of the paragraph. He/she says “this approach was preferable to victimizing other geographical areas by taking their jobs....” With that in mind, let’s take a look at the answer choices.

(A) is tempting. The term “high-technology development” seems to imply some level of modernization. However, in describing HTD, the author notes that local governments compete “to attract NEWLY formed high-technology manufacturing firms.” So, even if HTD encourages the modernization of EXISTING manufacturing facilities, this is not mentioned in the passage. Eliminate (A).

HTD does seem to promote competition, but not between rival  industries . The passage mentions that it causes local  governments , not industries, to compete. Eliminate (B).

It’s totally possible that HTD encourages the growth of related industries. The problem is that the question asks for an advantage  mentioned  in the passage. The passage simply doesn’t talk about the effect of HTD on manufacturing-related industries. Eliminate (C).

HTD actually does the opposite of what is described in (D). According to the author, one of the shortcomings of HTD is that “high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce.” So, HTD does not take full advantage of the existing workforce, and we can eliminate (D).

Remember, the author mentioned that HTD “was preferable to victimizing other geographical areas by taking their jobs.” In other words, unlike the strategy discussed in the first paragraph, HTD did not aim to lure  existing  manufacturing facilities from one geography to another. Instead, by attempting to attract  newly  formed high-technology firms, HTD provided jobs to one area without stealing jobs from another area. This is exactly what is described by (E).

(E) is an advantage of HTD mentioned in the passage, and it is the correct answer for question 5.

I hope that helps!

Taulark1 · Answer

Hi  GMATNinja ,

"it also had its shortcomings: high-tech manufacturing firms employ only a specially trained fraction of the manufacturing workforce, and there simply are not enough high-tech firms to satisfy all geographic areas."

Is my interpretation correct ? - 
Shortcoming ->High tech firms only employed specially trained fraction of the manufacturing workforce, so all the manufacturing workforce for the geographic areas couldn't get jobs. (Hence didn't satisfy all geographic areas).

GMATNinja · Answer

The author lists two separate shortcomings of high-tech development in this sentence:

1) It only employs specially trained employees, leaving the rest of the workforce out of luck.
2) Separately, there aren't enough high-tech firms to help the economies of all geographic regions. This implies that even the specially trained employees are in danger, because there aren't enough companies to give them jobs.

The first shortcoming isn't necessarily causing the second shortcoming. Instead, they are both factors that weigh against high-tech development as a universally great strategy.

I hope that helps!

Taulark1 · Answer

okay if we take point 1 as you described above shouldn't option E in question 5 be a disadvantage rather than an advantage?, since its taking advantage of a local workforce (specially trained) at the expense of the other (not so specially trained).

GMATNinja · Answer

Question 5 
 
The wording in (E) for question 5 is tricky!
 
The key here is to determine what "another" refers to. Another  what , exactly?

Earlier in the sentence, we have "...  one local  workforce." So, "another" actually means "another  local  workforce." So, (D) is talking about  two different  local workforces -- or, in other words, two workforces in separate locations.

We know that this is an advantage because the author tells us that high tech is "preferable to victimizing other geographical areas by taking their jobs."

You're right that high tech only benefits some workers within one given location, but (E) is talking about workers in different locations. That's why (E) is the correct answer to question 5.

I hope that helps!

GMATNinja · Answer

Question 1

To answer primary purpose questions, start by breaking down the structure of the passage as a whole. Why did the author write each paragraph?

Here's a breakdown of this passage:

Paragraph 1: The author describes and evaluates an economic development strategy from the 1960s/1970s. 
 Paragraph 2: The author describes and evaluates an economic development strategy from the 1980s. 
 Paragraph 3: The author describes and evaluates an economic development strategy from current times.

From the above breakdown of each paragraph, why did the author write the passage as a whole? Well, he/she wants to describe and evaluate several different economic development strategies.

That fits beautifully with (E):
 
(E) is the correct answer to question 1.

I hope that helps!

pulkitrana · Answer

(D) define and explore promotional efforts used by local governments to attract new industry

Isn't the PP of the passage revolving around the local governments efforts to attract new industry?

GMATNinja Please help

GMATNinja · Answer

Question 1 
 
Good question!

It's true that the passage is about the "efforts of local governments." But what efforts specifically?

Well, the first paragraph discusses a strategy local governments used for " economic development ." The next two paragraphs discuss two different strategies local governments employed with the same goal, i.e. achieving economic development.

Notice that the common denominator of all these strategies is their goal of "economic development." True the first strategy seeks to achieve economic development by attracting manufacturing industries, while the second tries to attract high-tech firms. But the third strategy  isn't  about attracting industries from elsewhere. Rather, it's about encouraging homegrown business.

Let's now take a look at (D):

Notice that the author discusses efforts to attract new industries as  examples  of a larger project. More specifically, the project of economic development. For that reason, (D) isn't an accurate way to define the primary purpose, and we can eliminate it.

I hope that helps!

NickC · Answer

Hi  GMATNinja

For Q2, why isn't option D correct? It does mention that during the high-technology development era, only a specially trained fraction of the manufacturing force could be employed. Is it wrong of me to assume that that WASN'T the case prior to the 80s?
Thanks in advance!

GMATNinja · Answer

The passage does indeed tell us that "high-tech manufacturing firms employ only a  specially trained fraction  of the manufacturing workforce". That means that the people working at those high-tech manufacturing firms have some sort of special training.

But NOT having that  specific  special training does not necessarily mean that you don't have ANY specialized skills. It just means that you don't have the special training necessary to work at those high-tech manufacturing firms.

For example, let's say that most (or even all) people in the manufacturing workforce have at least one specialized skill. But only 2% of those workers have the SPECIFIC special skills needed to work at the high-tech manufacturing firms. Everyone else might have specialized skills, just not the right ones needed to work at those particular firms.

(D) could be true, but there's no evidence in the passage to support it. (C), on the other hand, is supported by the first paragraph, so it's the best answer.

I hope that helps!

MyNameisFritz · Answer

1. The primary purpose of the passage is to

(A) advocate more effective strategies for encouraging the development of high- technology enterprises in the United States - Author is not advocating or encouraging anything 
 (B) contrast the incentives for economic development offered by local governments with those offered by the private sector - Nothing mentioned by private sector 
 (C) acknowledge and counter adverse criticism of programs being used to stimulate local economic development - Too narrow 
 (D) define and explore promotional efforts used by local governments to attract new industry 
 (E) review and evaluate strategies and programs that have been used to stimulate economic development - Author reviews strategies and gives pros and cons, keep this

2. The passage suggests which of the following about the majority of United States manufacturing industries before the high-technology development era of the 1980's?

(A) They lost many of their most innovative personnel to small entrepreneurial enterprises - small entrepreneurial enterprises? this is not mentioned 
 (B) They experienced a major decline in profits during the 1960’s and 1970’s - not mentioned 
 (C) They could provide real economic benefits to the areas in which they were located - the governments competed to get these companies, so there must have been some benefit to having them. Keep. 
 (D) They employed workers who had no specialized skills - incorrect, they employed workers who were skilled 
 (E) They actively interfered with local entrepreneurial ventures - not mentioned

3. The tone of the passage suggests that the author is most optimistic about the economic development potential of which of the following groups?

(A) Local governments - incorrect 
 (B) High-technology promoters - incorrect 
 (C) Local entrepreneurs - yes! the author mentions that the potential can benefit local entrepreneurs as per last paragraph 
 (D) Manufacturing-industry managers - incorrect 
 (E) Economic development strategists - incorrect

4. The passage does NOT state which of the following about local entrepreneurs?

(A) They are found nearly everywhere -  Small indigenous businesses are created by a nearly ubiquitous resource  
 (B) They encourage further entrepreneurship -  Indigenous industry and talent are kept at home, creating an environment that both provides jobs and fosters further entrepreneurship.  
 (C) They attract out-of-town investors - not mentioned  
 (D) They employ local workers -  Small indigenous businesses are created by a nearly ubiquitous resource, local entrepreneurs.  
 (E) They are established in their communities -  With roots in their communities

5. The author of the passage mentions which of the following as an advantage of high-technology development?

(A) It encourages the modernization of existing manufacturing facilities - not mentioned 
 (B) It promotes healthy competition between rival industries - not mentioned 
 (C) It encourages the growth of related industries - not mentioned 
 (D) It takes full advantage of the existing workforce - it only employs skilled workers 
 (E) It does not advantage one local workforce at the expense of another -  Although this approach was preferable to victimizing other geographical areas by taking their jobs, it also ...

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During the 1960's and 1970's, the primary economic development

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During the 1960's and 1970's, the primary economic development

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