What is Economic Development?
While there is no single, standard definition of economic development, it can be broadly defined as a group of programs or activities that seeks to improve the economic well-being and quality of life for a community!
This can be achieved by creating and retaining well-paying jobs, supporting business growth, developing key real estate, and providing access to open space, neighborhood amenities and cultural programs.
Key functions include:
- Strategic Planning
- Business retention and expansion
- Business marketing and attraction
- Entrepreneurial and Small Business Development
- Workforce Development
- Real Estate Development and Reuse
- Neighborhood Redevelopment
- Economic Resiliency
Context for Local Economic Development:
- Your City’s economic strengths and weaknesses
- Your City’s role in the regional economy
- The difference between a weak and strong real estate market
- The local regulatory environment
Stakeholders and Partners and their role in Economic Development
- Public economic development agencies and city staff
- Public-Private and non-profit economic development organizations
- Chamber of Commerce: A membership driving organization representing the interests of the private-sector business community. Activities typically include business recruitment and retention, tourism, supporting local businesses, neighborhood revitalization, and business advocacy.
- Community Development Organizations (CDC): a development corporation with the main role of supporting community-based economic development through such actions as developing/leasing property, lending to businesses, and providing workforce training. These corporations can be structured as a community cooperative; nonprofit organization, or for-profit entities
- Community Development Finance Institutions: CDFIs role is to offer affordable financing and capital to economically distressed neighborhoods and low-income individuals. The various forms that CDFIs can take include community development loan funds; community development banks, and community development credit unions.
- Local and Regional business community
- Real Estate Development community
- Residents and Community Groups
- Workforce Development Partners
- City Funding
- State Funding
- Federal Funding
- EDA Planning and Local Technical Assistance
- Community development Block grant (CDBG)
- New Markets Tax Credits
- Historic Preservation Tax Incentives
Public Private Partnerships:
A new approach to funding local economic development projects is the concept of public-private partnerships. These are contractual arrangements between a municipality and a private or corporate entity agreeing to share the responsibility of funding and managing an economic development project.
Focus on Equity:
There is a growing emphasis on how local economic development can be leveraged to improve access to economic opportunities for residents, particularly in cities where there is growing income inequality and a lack of economic mobility. The practice of inclusive economic development is defined as “community-based strategies that aim to improve economic opportunity for all, with a focus on disadvantaged residents”.
Measuring Impact with Performance Management
Measuring the impact of economic development initiatives and projects will help you determine whether you are meeting the needs of your community and local businesses. It’s important to point out that in the context of short-term political cycles, it may be tempting to stray from the strategy and only consider economic development in terms of traditional, more tangible successes, such as attracting a new, large employer or the number of jobs added in your community. HOWEVER, if this is ALL you’re measuring you are seeing an incomplete picture. For this reason it is important for elected officials and staff agree upon, committed to accurately measure even incremental economic achievements. This will allow political leaders to demonstrate success and champion all the various ways the community is supporting economic activity.
Economic Development Metrics include:
- Economic conditions
- Population characteristics
- Population characteristics
- Labor force characteristics
- Physical conditions
- Business climate
- Knowledge-based resources
- Quality of Life
The Role of Elected Leaders:
Just like there are various functions of local economic development, there are also a variety of different roles that elected leaders should play in the process. Particularly for newly elected leaders, it’s critical to understand how to leverage your role to help encourage economic growth!
- Be a student
- Be a convener
- Be a listener
- Be a policymaker
- Be a salesperson
- Be an ambassador
Economic development demands buy-in and leadership from local elected officials. From the bully pulpit to the design and coordination of public policies, mayors and councilmembers have opportunities every day to effect change and promote a strategic vision of economic growth for their city. This vision can be one that promotes equity and inclusion across all neighborhoods, is grounded in data and evidence, and is implemented in partnership with community stakeholders and partners.
To read this complete document: What You Should Know 2.0: Elected Leaders and Economic Development produced by the National League of Cities – Cities Strong Together in 2017, click here!
We also recommend this document for additional basic background: The Role of Local Elected Officials in Economic Development – 10 things you should know! – written by the National League of Cities – Center for Research and Innovation in 2010, click here
Our staff at the RADC are competent and are here to partner with you and your community to assist and facilitate for you the development of your projects, work with your businesses, and assist with marketing your community, available properties, and promote your community for new businesses, and to your new residents who are considering a move to your town! Click here to connect with our Economic Development Specialist, give us a call or send us an email!