Introduction Flashcards
Economic Developments strategies should be based on
needs, assets, and goals of the community
before establishing any new initiative a practitioner must
- study the historical growth and decay of the community over time, including how its natural resources, workforce, and leadership have evolved to meet the needs of the knowledge-based economy;
- discern the critical strengths, weaknesses, opportunities, threats, and challenges the community faces;
- understand existing business and development assistance programs;
- determine if there are existing programs to leverage, expand or modify to fit needs;
- understand the obstacles fro private sector growth and development; 5. build relationships with utilities, workforce development groups, chambers and other stakeholders to create a vision for the community
Economic Development Definition
a program, group of policies, or set of activities that seeks to improve the economic well-being and quality of life for a community by creating and/or retaining jobs that facilitate growth and create a stable tax base
Most common objectives of economic development
create jobs, wealth, or assets and the improvement of the quality of life
economic development efforts typically include the following:
Job Creation
Job Retention
Quality of Life
Job Creation
Traditional objective of economic development ; jobs created should support a desired standard of living and decent working conditions, and opportunity for advancement. Overall goal is to boost local income
Job Retention
Also referred to as BRE focuses on economic development resources on maintaining the current employment levels in a community through outreach campaigns. Most net new jobs created come from within the community which makes existing businesses a critical focus for econ dev
Quality of Life
represented by safety, education, quality and opportunity, poverty reduction, environmental quality, and cultural and recreational amenities. It makes living, working, and conducing business in a community worthwhile
Quality of Place
Places that are open to new ideas, encourage diversity, among residents and have abundant skill sets that are required to launch new business and new industry CREATIVE CLASS
Factors that can significantly affect the likelihood of success for economic development projects and programs no matter the community
- strategic plan with a widely accepted vision and measurable indicators of success and failure
- strong understanding of the local economy, its strengths, weaknesses, opportunities, and threats
- programs built on comparative advantages
- local leadership that stimulates cooperation an collaboration within community
- sustained financing over a long period of time
- management that strives for excellence in customer service
Economic Development Players
Local Government State Government Federal Government Special Authorities Public/Private Partnerships Chambers and Other Business Assoc. Universities and Research Partners Community Colleges workforce development organizations neighborhood groups utilities philanthropic organizations
Local Goverment
primary initiator of economic development programs and how they use state and federal funds. They have taxing, zoning, and eminent domain authority and can provide infrastructure, support commercial revitalization, and promote all business development
State Goverment
broader authority than local gov. they are the main provider of econ dev through state funds and receipt of federal dollars. Powers include taxing and setting compensation levels such as unemployment insurance, education, infrastructure, and transportation. States are involved in technology development, university linkages, special funding for business development, and export assistance
Federal Gov
provides funding and technical assistance through various agencies; regulatory powers include where to locate federal buildings and offices and effects economic development through legislation like the Community Reinvestment Act (CRA). Federal gov also has specific programs that focus on rural and urban issues
Special Authorities
usually legislated by state governments to construct and operate major public projects like an airport , stadium, port, or redevelopment authority. Boards are appointed by state and local officials. Powers typically include the ability to incur debt and acquire and develop property
Public/Private Partnerships
have greater flexibility than the public sector to conduct economic development activities since they don’t have to answer to such broad constituencies. In general they are formed around specific development projects like workforce training, venture capital, marketing, tech development, and technical assistance
Chambers and other business associations
traditional leader in business recruitment, attraction, and retention and tourism; often offer programs and services related to job creation, job training, neighborhood revitalization, and regulatory reform. Industry associations and councils (tech councils) have become key players in workforce development efforts, cluster-based initiatives, and technology-led development
Universities and research institutions
include federal labs and medical centers; major producers of business and scientific research, new technologies, and innovations, educated human capital, and problem solving capabilities
community colleges
major provider of workforce and vocational training and technical assistance to local business; onsite manufacturing labs to train workers and assist small and medium sized business to assist in applying new technologies are common; sometimes house offices that are geared towards providing technical assistance to support local business
workforce development organizations
leverage resources to improve basic skills (literacy and math), hard skills (welding and IT certifications) and soft skills (work ethics and attitude)
neighborhood groups
often referred to as community development corporations (CDCs); typically these group target distressed areas of a community; often involved in housing rehab programs but some are playing a growing role in developing small business assistance programs and commercial development institutions
utilities
provide reduced utility rates, loans, and technology and business assistance. often utilities house active economic development departments, conduct outreach programs, and/or own available land for resale to the community
philanthropic organizations
typically have strong ties to a specific community and mission
roles of economic developer
analyst catalyst gap filler advocate educator visionary ethics champion
analyst
understands the strengths and weaknesses as well as comparative advantages of the local economy; provides quantitative and qualitative information to the decision and policy makers
catalyst
provides incentives to leverage the investment or involvement of different public and private sector actors
gap filler
provides assistance where the markets and institutions cans or won’t meet the needs of the community; important not to supplant the private sector where it is willing and able to make the needed investments
advocate
speaks out for the well-being of the community and protects the interests of businesses; moves strategic planning process along by advocating for the good of the entire community
educator
teaches the general public what they don’t know about economic development and the costs and benefits of such initiatives
visionary
able to loo ahead and see not what is most likely to happen but what could happen if the community’s spirit and resources are focused on catalytic projects that can positively changes the community’s future
ethics champion
need to develop code of ethics for the community, region, and beyond to ensure zero-sum economic development doesn’t destroy the tax base
role of the economic development will depend on the ____ of the economic development organization and the practitioner’s role within the organization
mission
neoclassical economic development theory
believe that capital will flow to areas where it will receive highest return; pure competition without market interference - HOWEVER - decline in investment is not always self-correcting and investment doesn’t always go to the low cost area [FDI locations occur depending on workforce, access to market, proximity to research institutions, etc]
economic base theory
suggests that economies are divided into export/import goods and services( BASIC) and non-export (internally produced) goods and services(NON-BASIC); basic vs. non-basic - HOWEVER - this can lead to less diversified economies that are too dependent on small number of industries and vulnerable to economic downturns like auto industry or defense-related communities
location theory
asserts that economic development is the distribution of employment and economic activity that results from individual location decisions by firms. Businesses typically decide where to location based on their needs like start-up, expansion, relocation, new branches. Higher company location = higher job growth - HOWEVER - technological advances allows firms to locate almost anywhere, no net increase in economic activity is transferred to a new location, businesses have no long term commitment to communities, location differences change overtime
spiral or causation theory
economic development is a casual process; success or failure of development and community economic health can be attributed to to specific local events and conditions - to reverse a downward spiral communities have to encourage investment in their community or a specific neighborhood
product life cycle theory
specific to industrial location and says that industries move based on their product life cycle - in early days most innovative so reliant on high skilled labor and business services = large metro, then as things become more competitive and profits decline move to cheaper more rural areas or international locations where inputs are cheaper
new growth theory
the production of knowledge is the driving force behind long-term economic development; the more knowledge we have the more we can develop. This is the basis behind sustainability
new growth theory *3 interrelated strategies to promote knowledge development
investing in knowledge production (research and development, tech transfer)
investing in human capital (skills, education)
promoting entrepreneurship
Creative Class
Richard Florida; refers to the knowledge-based workers who embody the very essences of innovation and entrepreneurship
