Economic Development 101
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. This is mainly achieved
through:
• Retention,
expansion and recruitment of "primary" jobs
• New capital investment
• Business
creation and attraction
What is a "primary"
job?
A "primary" job is a job that produces goods and/or
services for customers that are predominantly 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 through wages paid to employees and through suppliers.
What does an economic
developer specifically do?
Economic developers wear many different hats. However,
there are three main functions an economic developer performs:
1. Provide
information and assistance to companies that are interested in the
economic developers community for relocation, retention or expansion.
Economic developers do not create new jobs. They provide
information and assistance to companies who create new jobs. A good
economic development program strives to have the most comprehensive and
current information available on the following:
• Local demographics • Quality of
life
• Public infrastructure • Business
assistance programs
• Real estate •
Taxes, fees, and regulations
2.
Market the community to
targeted business industries.
Like any company, if a
consumer isn’t familiar with your product, they won’t buy it. Another
function of an economic developer’s job is to market the community to
businesses in "targeted" or specific industries best suited for the
community. Marketing activities often include:
• Website development •
Recruitment trips to targeted areas
• Print advertising • Site
selection conferences
• Tradeshows •
Multimedia presentations
• Public relations
3. Work
with elected officials and community partners to ensure that a positive
business environment exists in the community.
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
Why does our community
need "greater" wealth?
Economic development programs vary based on the needs of
a community. There are several benefits of a successful economic
development program.
Higher quality public services–By increasing the tax base
of a community, local governments can provide higher quality public
services to citizens. This could mean additional police officers to help
ensure public safety, additional parks and recreation areas, etc.
More job opportunities for citizens–Adding "primary" job
opportunities to a community gives citizens more opportunities to find
higher-paying jobs closer to home. "Primary" jobs usually pay a higher
average wage than the average per capita income of the community. They
also create additional or "spin-off" jobs within a community.
Greater protection from economic downturns–One of the
focuses of economic development is to diversify the economic base,
thereby increasingly cushioning the community against economic shocks. A
community that has not diversified its industry base can find itself in
trouble if its single, major industry downsizes or suddenly leaves the
community.
Economic developers work with elected officials and
community partners to strengthen any gaps in the
community related to
the above items and make the community more desirable for businesses. |
