Economic Development Lessons Learned
While the economy again struggles to regain its footing, it seems reasonable to pause and ask ourselves what's changed since the 1980s. What have we learned about developing our community economies? What can we control? What can we or should we be doing to help assure our future economic viability?
Economic development is complex, and there are no quick, easy solutions to the issues facing us at the moment. However, we have learned a great deal from the work of Indiana communities and our colleagues in the economic development profession. Perhaps past lessons can bring some perspective to the present economic situation.
Tapping the Best Leaders
Every successful community can point to the individual or individuals who are primarily responsible for its success. Conversely, struggling communities invariably point to lack of leadership as the main reason they cannot move ahead. True community leaders view a community as a whole, clearly see the interconnectedness of every component, and understand that economic development is not an activity isolated from the development of the entire community.
Creating Comprehensive Plans
Every community should develop-with citizen input -a comprehensive plan addressing land use (not just zoning), infrastructure, capital improvements, and community economic development. Such plans provide the framework for making development decisions. Planning helps avoid the wasted time and resources associated with ad hoc development decisions and can help mitigate the adverse impact of sprawl on Indiana's downtowns.
Retaining Existing Businesses
The majority of new jobs are created by existing businesses. Unfortunately, few communities have an organized program for retaining and expanding existing businesses. Many existing businesses with growth potential are unaware of the many local and state resources available to assist them. These businesses have changing needs, and the community must be in a position to meet them. Those needs may include more skilled workers, more advanced telecommunications, access to an airport, or better lifestyle opportunities. These attributes are developed over time, and only constant contact with local companies can keep a community fully informed of their growing needs.
Accepting Change
It's natural for some existing businesses to close or leave; these changes occur for a variety of reasons, often outside a community's control. Businesses compete in a global environment, are influenced by external economic pressures, and are subject to normal business cycles.
There is little a community or economic developer can do to combat, for example, business consolidations, the movement of companies offshore, or business failures due to changing consumer preferences. The commitment of additional financial or other incentives only prolongs the inevitable.
Welcoming Start-Ups
Business creation is a high-risk arena, but new small businesses are a significant source of new jobs. Every business must start somewhere, and the more conducive the environment to business start-ups, the more likely they are to occur. Access to capital, expertise, facilities and mentorship are among the most essential things a community can offer.
Seeing the Big Picture
Economic development happens at the local level, but there are no local economies. Economies are regional, and the most valuable information a community can have is a true and accurate picture of its regional economy. Along with pertinent demographic information, a regional analysis should identify existing industry groups and indicate whether those groups are stable, growing or declining. By further identifying buyers, suppliers and other related businesses, a community can invest its time and money supporting and attracting the types of businesses that clearly fit into the regional economy and, as such, are far more likely to stay or move there.
Forming Partnerships
Given that economies are regional, it makes sense to coordinate economic development within regions. This often means local organizations partnering with each other and with regional entities, such as the state's Workforce Investment Boards. For example, in some regions in Indiana, local economic development organizations have formed regional groups to conduct economic development marketing.
Unlike the environment of the 1980s, each region of the state is now served by numerous organizations whose mission includes some aspect of community and economic development. Yet, in many areas there is still a traditional unwillingness to partner, and there are many very small and under-funded local organizations who individually can have little effect. It is probably unrealistic to assume that local organizations will disappear, but coordinating their efforts is
To maximize scarce resources is to maximize their impact. It is especially important for the poorer areas of the state to put aside differences and form partnerships to address issues from a regional or multi-county perspective: planning, economic development marketing, economic development strategy, telecommunications infrastructure development and transportation development, to name a few.
Enhancing Quality of Life
Economic development is not just about creating jobs! It's about building communities-physically, economically, socially and culturally. Aside from their specific business-related needs, companies want in their communities what citizens want in their communities. Companies have many choices about where to locate a new operation. Overall quality of life and lifestyle are far more important to them now than at any time in the past and are often far more important than any economic incentive a community may offer. Research tells us that the high-tech and the highly educated workforce have a strong preference for communities that are broadly diverse and offer a wide variety of recreational and cultural opportunities. Lifestyle is important to today's workforce, and, consequently, it is important to their employers.
A good economic development program is based on good research, a clear understanding of the regional economy, and solid strategic planning. It focuses on the development of local business; utilizes realistic, targeted marketing; and promotes the wise and strategic use of economic development incentives.
That said, the best economic development efforts cannot overcome significant community shortcomings. The development of the total community should be the single most important focus of community leaders who want to affect their long-term economic viability.
Elaine M. Fisher, Director
Center for Economic & Community Development,
School of Continuing Education & Public Service, Ball State University