I’ve heard two myths about economic development several times in my career that has spanned three states and three decades.
With national economic development week around the corner, I hope to set the record straight about the process.
- Our town would have landed That Big Company, but the founding fathers said no.
The truth is when companies are considering a new location, they research the infrastructure capacity and labor force availability of a community before contacting the locals. If a location is suitable for the company, the deciding factor is often a real estate transaction. When there is a willing seller and a willing buyer, there may not be much a local government could do to prevent the deal. Many communities, especially in rural areas, do not have zoning or land use regulations to prevent a company from coming to town. More often than not, the company rules out the community – not the other way around.
- Economic development is about picking winners and losers.
This is a commonly used phrase by legislators. Instead, I encourage policy makers to think of economic development in terms of winners and winners.
The role of an economic development professional is to balance the needs of the business community with protecting the public interest. That is why the best structure for an economic development organization is a public-private partnership.
So how does that translate to a double win?
Communities and states consider whether to invest in economic development projects – from building infrastructure to waiving fees or rebating taxes. Officials must consider the merits of the investment.
When I was the economic development director in Torrington, Wyo., I remember hearing criticism for offering incentives to a company that didn’t need the help. The fallacy about that line of thinking is incentives aren’t meant to be a charitable contribution. Economic development funds should be invested in projects that will yield greater returns than if the money was left sitting in the bank.
In May, we recognize the economic development professionals across the country. Think of them like investment advisors looking for the best opportunities for our communities.
80% of job growth comes from existing businesses
One more thing to remember. Instead of investing in recruiting That Big Company, the greatest economic benefits – 80 percent of job growth – will come from the expansion of existing businesses.
Orbis Advantage Inc. guides business and nonprofit leaders to build stronger organizations through marketing, strategic planning and professional development. Orbis is located in La Grange, Wyoming.