Economic Development 101
What is Economic Development?
"The intentional practice of improving a community's economic well-being and quality of life."
This 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 distributes that wealth in the community through wages paid to employees and through suppliers.
There are two main functions that an economic developer performs in order to attract business.
- Provide information and assistance to companies that are interested in the developer’s community for relocation. 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 demographic data
- Quality of life
- Public infrastructure
- Business assistance programs
- Real estate, taxes & regulations
- Market the community to targeted business industries. Like any company, a consumer won’t buy your product if they aren’t familiar with it. To avoid this, 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
- Multimedia presentations
- Public relations
Economic developers work with elected officials and community partners to ensure that a positive environment for business growth exists in the community. The same things that attract new employers will keep existing firms in the community. These factors include:
- Proximity to markets
- Local labor skills and availability
- Quality of life issues
- Proximity to major universities
- Ease of international travel
- Tax and regulatory environment
- Cost of doing business
- Concentration of existing industries
There are a multitude of reasons why companies choose one location over another. It is the role of an economic developer to understand a company’s needs and to portray the area in a positive light. According to Area Development Magazine’s Corporate Survey 2010 of corporate decision makers, the top 10 site selection criteria are:
- Availability of skilled labor
- Labor costs
- Highway accessibility
- Energy availability and costs
- Availability of telecommunications services
- Tax exemptions
- Occupancy or construction costs
- State and local incentives
- Proximity to major markets
- Availability of land
Economic development does not just involve attracting “outside” dollars. Most communities also include small business development and business creation in their definition of local economic development.