24 Jan Economic Development: What it is, its Importance, and How to Facilitate in Your City
To some, the term development is scary because it’s associated with government spending. Although development efforts do require money, their result should be a positive gain in tax revenue from smarter, better-equipped residents who are creating and filling valuable jobs and business.
This is the third article in my series about the three forms of development in a community, which include community, economic, and business. I began this series to help others and myself better understand them and know how to help move them forward in our respective cities and communities. By understanding and pitching in, we can make a very real positive change in the cities and towns we live in and our friends and neighbors lives.
Visit and read the previous two articles here:
The most confusing aspect of the three forms of development (community, business, economic) is economic development. It’s confusing because you can make an argument that anything within economic development could also be done for the benefit of community and business development.
Understanding what economic development is and putting resources into it is crucial for a community. Let’s explore this further.
What is Economic Development?
Economic development is “the development of economic wealth of countries, regions or communities for the well-being of their inhabitants.” In other words, economic development is increasing the overall wealth in a community for the benefit of those living in that area.
Bloomington, Illinois Alderman Jamie Mathy describes economic development as “setting up the community for a positive economic environment,” and states that the goal is “removing as many roadblocks as possible that local government is capable of.” Due to the positive impact that businesses have on the lives of residents and the city as a whole, the local government is working to make the city “as friendly towards businesses as we can,” says Mathy. By being friendly to businesses, new companies can be launched, existing businesses may move to the city, and as a result, new and better jobs will be available.
According to Town of Normal Economic Development Director Sally Heffernan, economic development is, “activities which create wealth for an identified geographic region.”
“Economic development means jobs to me,” says Dr. Doan Winkel, entrepreneurship professor at John Carroll University and former ISU professor. “But more than that it means effectively preparing people for jobs and putting resources behind them to improve opportunities,” Doan continues.
Matt Brown, Director of Economic Development in Santa Fe, New Mexico, believes that economic development must be focused on the people living in a community. By creating favorable conditions that help people maximize their skills, a town is more likely to retain talented residents who will positively impact the community.
Examples of Economic Development
- A town known for being the home of a large public university is struggling to retain graduates. To keep talent within their city limits, the town works with several entrepreneurs in the area and the school to launch a $5M business incubator in which a business competition is developed at the school. Winners are awarded office space, living stipends, and startup capital to stay in town and work in local startups.
- A city with several tech companies looking to attract more decides to invest in their internet backbone, improving the speeds possible for their residents and local businesses. This allows existing businesses to get more done and encourages new technology businesses to launch in the area. For example, Kansas City, Missouri invested in becoming a “smart city.” Learn more here.
Why is Economic Development Important?
Simply put, cities with more resources are better equipped to provide for their communities. Economic development increases tax revenues, available jobs, and opportunities for citizens.
Keys to Successful Economic Development
Heffernan (Town of Normal Economic Development Director) believes that successful economic development efforts all share the following traits:
- Begin with a vision translated effectively into a plan through evaluation of the region’s assets and identification of realistic outcomes.
- Are regional and focused on primary jobs.
- Serve regions determined by laborsheds NOT by arbitrary boundaries or interstate corridors.
- Are vocally championed by the public and private sector.
- Continuously communicate the vision and the plan.
- Have economic development, and other entities responsible for implementation, who understand and accept their roles in implementing the vision, incorporate those roles into their organizations’ strategic plans, and establish ongoing communication among themselves to avoid gaps, duplication or turf battles.
- Celebrate successes no matter where they occur in the region ALWAYS giving credit to the vision/plan.
- Review the vision/plan periodically and adjust as needed.
How to Facilitate Economic Development in Your City
I live in Bloomington and volunteer in several ways for the Town of Normal where it’s been easy to get involved. Depending on your city, you may have an easy or difficult time contributing to the economic development of your community. However, you don’t have to work with the local government to contribute to economic development. Many efforts extend beyond what the government can or should do.
There are many ways to get involved, including:
- Start a local group or event.
- Join a local council or committee.
- Ask local representatives what is being done to further the economic development of your town.
- Support local efforts and events.
What first step will you personally take to help with the economic development of your town or city? What recommendations do you have for others?
Illustration created by Seth T. Hahne.