Economic Development 101
What is Economic Development?
Economic development is a vital activity for any community. It is the process of creating greater wealth within a community by bringing in new "outside" dollars. Economic developers work with elected officials and community partners to strengthen gaps and to make the community more desirable for businesses. This is mainly achieved through:
- Retention, expansion and recruitment of "primary" jobs
- New capital investment
- Attracting visitors to spend money in the community
What is a "Primary" Job?
A "primary" job is one that produces goods and/or services for customers who are predominantly located outside the community. This creates new "outside" dollars for the community. Once an employer is paid for the products and/or services, he redistributes that wealth in the community to suppliers and through wages paid to employees.
Why Does Our Community Need "Greater" Wealth?
Economic development programs vary based on a community's needs. A successful economic development program produces several benefits.
- Higher quality public services – By increasing a community's tax base, the local government can provide higher quality public services to its citizens. This could mean such things as additional police officers to help ensure public safety or additional parks and recreation areas.
- More job opportunities for citizens – Adding "primary" job opportunities will give citizens more places to find higher-paying jobs closer to home. "Primary" jobs usually pay more than the community's average per capita income. They also create additional "spin-off" jobs within a community.
- Greater protection from economic downturns – Economic development focuses on diversifying the economic base, thereby cushioning the community against economic shocks. A community that has not diversified its industry base can find itself in trouble if a single, major industry downsizes or suddenly leaves town.
What Does an Economic Developer Specifically Do?
Economic developers work with elected officials and community partners to strengthen any gaps in the above mentioned items and to make the community more desirable for businesses. Economic developers wear many different hats, but they have three main functions:
1. Provide information and assistance to companies that are interested in relocating or expanding, or are thinking about leaving.
Economic developers do not create new jobs. They provide information and assistance to companies that create new jobs. A good economic development program strives to have the most comprehensive and current information available on the following:
- Local demographics
- Public infrastructure and costs
- Real estate
- Taxes, fees and regulations
- Quality of life
- Business assistance program
2. Market the community to targeted business industries
Economic developers market the community to businesses in specific industries that best suit the community. Marketing activities often include:
- Print advertising
- Recruitment trips to targeted areas
- Tradeshows
- Multimedia presentations
- Cold calling
- Site selection conferences
- Public relations
3. Work with elected officials and community partners to ensure that a positive business environment exists.
The same things that attract new employers will keep existing firms in the community. There are several reasons why companies thrive in certain communities and struggle in others. These factors include:
- Proximity to markets
- Ease of international travel
- Local labor skills and availability
- Tax and regulatory environment
- Quality of life issues
- Cost of doing business
- Strong and stable political leadership
- Incentives
- Infrastructure
- Proximity to major universities
- Concentration of existing industries
