Jan 22, 2011

Economic Development


Post-Recession Economic Development

We have conducted an informal survey of our friends and colleagues responsible for economic development programs for counties, cities and villages in the Midwest. We discovered that most of them are very concerned about replacing lost jobs. They know they must expand their community job base.

All those interviewed acknowledged that communities cannot rely totally on federal, state or local economic development stimulus programs to replace lost jobs. They are concerned about the disinvestment now being experienced in their communities.

We also identified that leaders in every community believe an effective economic development program is now vital. They told us that future programs must address the new and different post-recessionary local economy which is developing “right before their eyes.”

Aggressive practitioners are responding to the challenge of this new economic environment. They are working with local and regional leaders on reviewing past economic development efforts. They are developing ways to transform local and regional economic development organizations and programs in response to the vision of their post-recession local economy.

They are actively retooling their economic development strategies, adapting the best traditional “tools” and identifying new economic practices. They hope to “fast-track” growth of their local economy.

Post-Recession Economic Development Principles
Based on these conversations, we concluded that there are 10 economic development principles guiding the preparation of post-recession economic development strategies:
  1. Small businesses will increase jobs more quickly than larger businesses.
  2. It is easier to expand jobs at existing companies than to locate new ones.
  3. Entrepreneurial startup businesses develop a “locally connected” job base.
  4. Lack of financing sources limits startup and second-stage business growth.
  5. Regional collaboration is needed for business recruitment efforts.
  6. Partnering with others increases funds for advertising and promotion.
  7. Supply chain business recruitment is superior to “shotgun” recruitment attempts.
  8. Targeted business recruitment will evolve as new post-recession business linkages form.
  9. Community preparedness with existing sites, buildings and workforce is critical.
  10. Pre-approved and simple-to-understand incentives increase chances for success.


Post-Recession Economic Development Strategy Emphasis
We learned from our investigations that local economic development programs must evolve quickly in response to the anticipated post-recessionary economy. This transformation will place greater emphasis on:

  1. Retention and expansion of existing businesses.
  2. Intensified new business location marketing outreach efforts, partnering with other economic development organizations to increase funding for advertisements in site selection publications, plus sponsorship of business/site selector visitations and similar events.
  3. More effective area-wide branding to increase global and national identity of economic advantages of select geographic areas, especially those with unique natural resources, transportation logistics, educational and worker training capacities or concentrations of specialty skilled labor force.
  4. Better use of websites, electronic newsletters and social marketing to increase the reach and frequency of communications with prospective new businesses.
  5. Greater attention to supplier/vendor recruitment programs.
  6. A re-examination of “cluster” target business recruitment strategies updating specific targeted businesses in anticipation of newer post-recession business linkages.
  7. Pre-packaging of economic development incentives including financing for businesses meeting established community economic development criteria.
  8. Obtaining “shovel-ready” site/building approvals for economic development projects, in advance of need.
  9. Increased funding of economic development incentive programs tied to workforce utilization and training.
  10. Greater emphasis on small business and entrepreneur development programs, especially commercialization of university and private research.

Authors
Chuck Eckenstahler
http://www.linkedin.com/in/chuckeckenstahler


Craig Hullinger
http://craighullinger.com