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Economic Development

  1. DEFINING ECONOMIC DEVELOPMENT
  2. WHY IS ECONOMIC DEVELOPMENT IMPORTANT
  3. WHAT DO ECONOMIC DEVELOPERS DO?
  4. DEFINITIONS THAT ADDRESS EQUITY AND SUSTAINABILITY
  5. ECONOMIC DEVELOPMENT VS. ECONOMIC GROWTH
  6. ECONOMIC DEVELOPMENT COURSE
  7. ECONOMIC DEVELOPMENT INSTITUTE
  8. ECONOMIC DEVELOPMENT THEORIES
  9. ECONOMIC DEVELOPMENT LINKS

  1. DEFINING ECONOMIC DEVELOPMENT: -

Economic development is fundamentally about enhancing the factors of productive capacity - land, labor, capital, and technology  - of a national, state or local economy.  By using its resources and powers to reduce the risks and costs, which could prohibit investment, the public sector often has been responsible for setting the stage for employment-generating investment by the private sector. The public sector generally seeks to increase incomes, the number of jobs, and the productivity of resources in regions, states, counties, cities, towns, and neighborhoods.  Its tools and strategies have often been effective in enhancing a community's:

  • labor force (workforce preparation, accessibility, cost)
  • infrastructure (accessibility, capacity, and service of basic utilities, as well as transportation and telecommunications)
  • business and community facilities (access, capacity, and service to business incubators, industrial/technology/science parks, schools/community colleges/universities, sports/tourist facilities)
  • environment (physical, psychological, cultural, and entrepreneurial)
  • economic structure (composition)
  • institutional capacity (leadership, knowledge, skills) to support economic development and growth.

However, there can be trade-offs between economic development's goals of job creation and wealth generation.  Increasing productivity, for instance, may eliminate some types of jobs in the short-run. There is lively debate within the field about the differing goals for place-based development strategies and also about whether place-based or people-based is best. Economic development encompasses a broad and expansive set of activities and tools that assist communities in growth and prosperity. The best economic development practitioners strive to bring quality jobs, new business and increased services (along with numerous other benefits) to communities through innovative approaches and outcome driven strategies. Introduction To Economic Development breaks down the complex profession of economic development into the fundamental practices, principles and procedures. Value differences, contending ideological positions, and varied theories of how economic development occurs and how it should be practiced are presented in the following section.

Technology-led Economic Development: -
Technology development has added a new dimension to the role of economic development professionals. The quest for increased technology can be confusing and challenging from many perspectives. Communities must judge to what extent they should strive to recruit and support the technology industry, how to determine the proper role of advanced technology on the organization’s everyday activities and design ways to help local businesses tap into technology opportunities. Many communities have been able to incorporate technology into both their practices and programs while others have struggled to understand the capabilities of this industry. As the information age and technology sector maintain steady growth, the need for more advanced economic development activity is expanding as well. Technology development encompasses increased infrastructure capabilities, advanced financing options, innovative marketing processes and start-up business assistance.

  1. WHY IS ECONOMIC DEVELOPMENT IMPORTANT: -

Economic development in the U.S. is a big deal. To start, many argue that economic development is necessary for sustaining the competitiveness of the United States economy and raising overall productivity and incomes. Second, additional development can help maintain a high level of employment and job quality for all Americans. Third, it can help to create the jobs necessary for providing middle-class opportunities for the jobless and working poor. Fourth, it can provide the earnings needed to make further investments in education, government services, amenities, infrastructure, and quality of life.

Moreover, economic development policy matters. Federal, state, and local governments spend billions of dollars in its name. So, development policy choices affect taxpayers' pocketbooks. What's more, evidence suggests that many development programs actually work and do achieve the goals listed above.

Economic development issues have a way of dominating most policy debates in state legislatures and city councils. Its prominence is due in part to citizens' tendency to evaluate public officials' success by how well their state or local economy is faring. If jobs are being generated, incomes are growing, and high profile companies are being attracted or retained, then a politician's tenure is likely to be extended. If not, he or she may become history.

But there is another important twist on the significance of economic development. Almost every major state and local policy debate, whether it involves taxation, welfare, environmental regulations, or workforce healthy and safety, quickly becomes a debate over economic development. Indeed, most new social and regulatory policies are fought on the grounds that they will harm the area's business climate and cause private investment to dry up. Similarly, education reform and adult retraining are promoted for their potential impact on economic growth.

  1. WHAT DO ECONOMIC DEVELOPERS DO?

During the last thirty-plus years, the field of economic development has changed significantly. Once an ad hoc art and practice, it is gradually becoming more of a science, an industry and a profession. Today, the field has its own journals and trade associations. It is taught in universities and colleges. Certificates are awarded to those who undergo appropriate training. Regional, national, and international conferences are held from Frankfurt, Germany, to Raleigh, North Carolina.

Many lay people mistakenly believe that economic development is simply a hands-on profession. The economic developer promotes sites, visits existing industries, runs a revolving loan fund, and so forth. But this is only the field's external face.

Economic development activities and outcomes are also shaped by public policies. Funding for infrastructure, tax and regulatory policies, new workforce training grants, and countless other examples influence the environment for investment and commerce. Called "business climate," this contested term refers to the extent to which the political and policy environments of a particular state or locality, compared with other jurisdictions, are seen to be supportive or burdensome to businesses. The implication is that any area whose business climate is not "competitive" will be shunned by the corporate sector and will find it difficult to attract or grow new firms and the jobs they provide.

The business climate is affected by both major cost factors (e.g., land, labor, taxes, regulations) and non-cost factors (e.g., quality of life, attitudes toward business). Government has a big impact on business climate (and hence, economic development practice), for it is that combination of services provided by the public sector, such as education, infrastructure, taxation, and regulation, which creates the context within which companies operate. Moreover, government delivers other direct programs to companies in the form of grants, low interest loans, debt insurance mechanisms, and business advisory services.There is no complete roster of all who are involved in this field, but here are some indicators of its size.

  • There are more than 2,000 community development corporations (CDCs) operating in low-income areas throughout the U.S. These groups boast 17 statewide associations and a national organization -- the National Congress for Community Economic Development -- with over 800 members.
  • The state of Minnesota has 200 revolving loan funds providing financing and management services to small businesses.
  • The American Economic Development Council, a major national trade association, has nearly 3,000 members, as well as its own research foundation that is affiliated with a major university.
  • The North Carolina Economic Development Association has close to 650 members, with 200 of these based in local and state organizations and agencies and another 400-plus engineers, attorneys, consultants, businesspersons, bankers, and utility personnel. In fact, its director estimates that 85 of the state's 100 counties have at least one economic development staff person in place.

Once it was virtually synonymous with business recruitment efforts; now it has broadened its boundaries. Today's economic development involves initiatives ranging from improving local amenities (e.g., building a museum and aquarium) to reforming the K-12 educational system, from retaining existing businesses to fostering minority ownership of business enterprises.Indeed, a recent trade association publication that surveyed economic developers found them in general agreement that:

  • The issue of educational quality and workforce preparation will become increasingly critical.
  • Changes in information technology, communications technology, and the growth of the Internet will have a major impact on the profession.
  • Existing business development will be central to economic developers in the years ahead.
  • Economic developers will have to know more about global markets.
  • The ability to forge political consensus within a community will be critical to successful economic development efforts.
  • Because of the scale of investments needed and the speed of economic change, the New Economy places a premium on collaboration. No one can afford to go it alone.

Yet, in many respects the challenge is the same. Economic developers invest to build up their location and promote their assets and opportunities to prospective investors, both inside and outside the community.

  1. DEFINITIONS THAT ADDRESS EQUITY AND SUSTAINABILITY:

Economic development policymakers and practitioners who are concerned about economically disadvantaged and depressed communities highlight some different issues when they define economic development. Community economic development or CED typically has five goals:

  • Stimulating a self-sustaining process of economic development (the dynamic and rate of development); Creating jobs at acceptable wages, with appropriate benefits and career ladders for area residents (the distribution of development)
  • Producing goods and services that meet social needs, like affordable housing, lowered energy costs, better health care, and accessible day care (the composition of development)
  • Establishing greater community control, accountability, and participation in basic economic decisions such as hiring, investment, and location (the control of development)
  • Broadening business and asset ownership within poor and ethnic minority communities.

The first objective is shared by other more conventional economic and business development strategies. But the last four distinguish community economic development from many traditional approaches and are especially important for both low-income and working class communities. The practice of CED also has a strong institution-building dimension, involving the creation and strengthening of economic organizations controlled or owned by residents of the area where these institutions are located. These might include business firms, industrial parks, banks, credit unions, cooperatives, community development corporations, and mutual housing associations. Lastly, there is an implicit anti-poverty mission implied in this definition, given the goal of creating more family-wage jobs.

The following economic development definition goes further on issues of fairness, environmental compatibility, and quality of life. The Corporation for Enterprise Development has argued that economic development should help to achieve a more widely shared and sustainable quality of life. This overall definition may be broken down into three elements:

  • Development entails the enrichment of material, social well-being, which can be measured in the flow of money and goods over time; increases in a jurisdiction's quality and quantity of public goods (such as clean air and water, freedom from crime, better schools, etc.); and access to good jobs (e.g., with wages and benefits sufficient for supporting a family, and opportunities for advancement)
  • Shared growth means there is broad distribution of opportunities for meaningful participation in the economy and enjoyment of the benefits of an increased standard of living.
  • Sustained growth implies that the above goals are achieved in a manner that does not detract from - but rather enhances - the economy's ability to achieve the same goals in the future.

Obviously, this conception of economic development adds to the debate about the means and ends of development policy. Many economic developers see their job solely as one that concerns employment generation and income growth. They believe that they have little influence on other objectives and are not responsive to constituencies that are most concerned with issues of equity and environmental conservation.

But an increasing number of voices contends that economic development policies must pass the tests suggested by the last few definitions: Are the policies, programs, and practices generating a higher standard of living and more and better jobs? Are programs becoming more accountable, cost-effective, and user-friendly? Are they expanding opportunities for all Americans? And are they becoming more compatible with conserving our environmental assets and promoting a higher quality of life?

  1. ECONOMIC DEVELOPMENT VS. ECONOMIC GROWTH: -

Economists Peter Bearse and Roger Vaughan write that:

  • Development is a qualitative change, which entails changes in the structure of the economy, including innovations in institutions, behavior, and technology
  • Growth is a quantitative change in the scale of the economy - in terms of investment, output, consumption, and income.

According to this view, economic development and economic growth are not necessarily the same thing. First, development is both a prerequisite to and a result of growth. Development, moreover, is prior to growth in the sense that growth cannot continue long without the sort of innovations and structural changes noted above. But growth, in turn, will drive new changes in the economy, causing new products and firms to be created as well as countless small incremental innovations. Together, these advances allow an economy to increase its productivity, thereby enabling the production of more outputs with fewer inputs over the long haul. Environmental critics and sustainable development advocates, furthermore, often point out that development does not have to imply some types of growth. An economy, for instance, can be developing, but not growing by certain indicators. Indeed, the measure of productivity should not be solely monetary; it should also represent and shed light on how effectively scarce natural resources are being used and how well pollution is being reduced or prevented

  1. ECONOMIC DEVELOPMENT COURSE: -

Mission Statement: -

The Course is a comprehensive educational experience on the theory and practice of economic development offering a standard course curriculum augmented by region-specific subject matter. The Course offering meets the needs of the new economic development professionals, allied professionals, and community leaders. Completion of the Course qualifies the participant into the Economic Development Institute program.

Description: -

This publication is a compilation of specially selected articles published in the Economic Development Review, describes the basics of the economic development practice and profession. It is perfect for Economic Development Course attendees, students, professional just entering the field or local community leaders who wish to understand economic development.

Among the major topic areas covered are perspectives on economic development, addressing the fundamental components of economic development, creating and marketing a competitive community, case study examples of economic development programs, use of technology in economic development, the role of incentives, retail development, and professional development of the practitioner (including tips on passing the Certified Economic Developer Exam).

The Certified Economic Developer (CED) Program, established in 1970, recognizes the professional economic developer and sets the standard of excellence for the profession. A Certified Economic Developer has attained proficiency with the professional competency standards identified and adopted by the American Economic Development Council (AEDC) and demonstrates to members of the economic development profession, the business community, the public, and governmental authorities, a commitment and interest in providing only the highest quality professional economic development services available. Since the program's inception, almost 1400 professional economic developers have been certified. Certification maintenance is required every three years and is achieved through participating in education and other defined activities. The CED designation is an important qualification for executive employment opportunities in the profession.

In addition, in 1996 the American Economic Development Council established the Accredited Economic Development Organization (AEDO) Program as a means of recognizing the professional excellence of economic development entities throughout North America. To date, more than twenty organizations have gone through the accreditation process. The AEDO Program combines volunteer commitment and peer networking, two hallmarks of the American Economic Development Council.

AEDC offers a variety of educational programs for economic development professionals through its National Seminars. Sign up today if you're interested in gaining more knowledge about the latest and best in the profession. Attend an AEDC Seminar and invest in your career.

  1. ECONOMIC DEVELOPMENT INSTITUTE: -

The Economic Development Institute (EDI) is a nationally renowned, three-year program of economic development education which provides: 1) an advanced, broad education for the professional economic developer incorporating skills and subjects required to carry out an economic development program; 2) classroom training relevant to preparation for professional certification; and 3) a level of education in demand by employers of professional economic developers. EDI is accredited by the American Economic Development Council (AEDC).

The Economic Development Institute is now offered in three locations. Each year of the three-year program is offered in late March or early April in Indianapolis, Indiana, and the second is held each August in Norman, Oklahoma. The third site is San Diego, California in December. Each year’s session lasts one week.

A prerequisite for EDI is completion of an accredited Economic Development Course (formerly Basic) or five years experience and/or education in the field of economic development. Admission to EDI is open to members and non-members of AEDC. Participants must complete research project to graduate from the Institute.

Advanced Symposia: Advanced Symposia are also accredited by AEDC and are held during EDI week at both the Indianapolis and Norman sites. These symposia are offered to EDI graduates, CEDs, Fellow Members of AEDC, and other economic development professionals with at least seven years of experience. The classes are two days

  1. Click here to View ECONOMIC DEVELOPMENT THEORIES: -

  1. ECONOMIC DEVELOPMENT LINKS: -

  • The Center for Economic Development at Jacksonville State University concentrates on providing specialized assistance to business and government. Examples of services provided include economic impact studies, marketing surveys, employee attitude assessment, training, and personnel and pay plan development.
  • The Center for Economic Development at the University of New Orleans was created to assist communities in Louisiana pursue economic development opportunities. The center utilizes university resources to assist government and community based economic development organizations in implementing economic development initiatives.
  • Georgia Tech's Center for Economic Development Services supports Georgia's economic development efforts by conducting specialized development courses, performing economic development research, helping communities prepare for growth, and connecting relocating or expanding companies with technical resources at the university.
  • Among its many areas of interest, the Cyburbia at SUNY Buffalo maintains resources in a variety of topics including economic development, community development, demographics, geographic information systems, property development and finance, growth issues and urban design.
  • Economic developers interested in customized corporate training and development should visit the Dowling College, Dowling Institute web site. The institute fosters partnerships among business, governments, and community groups to enhance local corporation's competitive edge and further educate and train the local work force.
  • The Economic Development Web Site, maintained by the Hubert Humphrey Institute at the University of Minnesota, is designed to assist economic development professionals gather and utilize data available on the Internet.
  • The Haas Center for Business Research and Economic Development - University of West Florida provides a number of services and resources designed to support economic development in northwest Florida. The center acts as a liaison among local government's chambers of commerce, industrial development groups and businesses while providing research and data on regional and state economic development activities.
  • The Office of Economic Development at the University of Massachusetts, Amherst represents the campus in regional and community economic development initiatives and works to maximize the outreach opportunities for Massachusetts firms. The office is situated in the Executive Area of Research and links several key areas that connect the campus to business and industry.
  • The Office of Economic Development at the University of South Florida is USF's coordination center for the Florida High Tech Corridor Initiative and industry, business and work force development issues"
  • The Technical Assistance Center (TAC) at the State University of New York at Plattsburgh is an EDA funded center that works to increase northeastern New York's local capacity to manage and enhance appropriate economic change, including generating employment and fostering capital investment.
  • The Conway Data Site Selection is the economic developer's link to the Geo-Economic Library. Conway Data also sponsors SiteNet, a digital data network for the development field.
  • County Business Patterns accesses a database of county, state and national business and development data. The Bureau of the Census annually collects the statistics used in this database.

{ Click here to View the links to Rural Economic Development }

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