Economic Development - Broadly Defined
Updated: Feb 11, 2019
I love economic development. It is a big, wide, wonderful field that plays a critical role in our society and affects people’s lives in a profound way. Jobs and corporate investment create wealth that citizens can use to purchase goods and start new businesses. Strong economies at all levels of government produce tax revenues, which allow governments to achieve their missions in education, infrastructure, citizen welfare, and service delivery. As an academic, I like that economic development encompasses many different disciplines, including economics, business, political science, public administration, marketing and communications, sociology, community planning, education, and many more. As a practitioner, I like that it involves a diverse range of actors, including local governments and development agencies, chambers of commerce, non-profit community development agencies, private enterprises, consultants, state development agencies, and the federal government. Also, it takes place on varying geographic levels (neighborhoods, cities, metropolitan areas, states, multi- state regions, national, and international). As an area of study and work, it offers great challenges and abundant opportunities.
“Economic development” has been defined as “the process by which a community creates, retains, and reinvests wealth and improves the quality of life” (David Dodson, MDC, Inc.). When many hear the term “economic development”, they think about recruiting industry. But industrial recruitment is not the only, or even most important, determinant of a strong local economy. Bringing economic health and prosperity to a community requires much more than just enticing a company to open a new plant in the local industrial park. Business retention and expansion, small business and entrepreneurial development, tourism and retiree attraction, for example, generally receive short shrift compared to industrial recruitment.
More importantly, prosperous local economies are built upon the foundation of strong communities. Community and economic vitality is largely determined by the quantity of leaders in a community and how, individually and collectively, they talk, decide, act, and interact with one another. This focus on the community and civic infrastructure contrasts with the prevailing view of economic development dominated by issues of business marketing, financial incentives, and recruitment. We often overemphasize marketing and sales (industrial recruiting) and pay too little attention to product development (improving the quality of life in the community). While industry recruiters certainly play important roles in the economic development of their communities, so do the high school coach, the hospital administrator, the plant manager, the Sunday school teacher, the city beautification council, and the citizen who organizes a town meeting.
One thing I like about the definition of economic development used here is its emphasis on the concept of “quality of life”. Indeed, the ultimate goal of economic development is to improve the quality of life for the people who live in a community (state/nation). It is a means to an end, not an end in itself. Quality of life is also an important site selection criterion for many major employers. Companies are attracted to, and want to stay in, communities that are good places to live, work, and conduct business. Top quality schools, exceptional medical care, diverse recreational opportunities, good roads, clean water, effective public safety, and much more, make a location appealing. Therefore, preserving, promoting, and improving a community’s educational system, natural environment and community aesthetics, and civic life must be integral components of its economic development strategy.
Finally, it is important to note that not all economic growth is desirable. A proper conception of economic development must embrace the concept of “sustainability” — meeting the needs of the current generation without compromising the ability of future generations to meet their own needs. That is, our goal should be to grow employers, jobs and incomes without compromising our natural and other assets.