Fundamentals of Economic Development

Jeffrey A. Finkle, CEcD
President & CEO
International Economic Development Council (IEDC)
March 2018

 About IEDC
 What is Economic Development
 Why is Economic Development So
Important
 Who are the Economic Development
Players
 Role of the ED Practitioner
 Key Issues in 2018

Membership organization
serving the ED profession with
5,000 + members
• Public state, regional, city and
county ED professionals
• Chambers of Commerce and
business support agencies
• Technology development
agencies
• Redevelopment authorities
• Educational Institutions
• Nonprofits
• Consultants
• Utility companies

2001:
The American Economic Development
Council (AEDC) & the Council for Urban
Economic Development (CUED) merged
to form IEDC

• Conferences
• Professional Development & Certification
• Legislative Tracking
• Clearinghouse
• Career Services
• Newsletters and Journal
• Advisory Services & Research

 IEDC is the world leader in
economic development
education and training
 Educational opportunities
exist for professionals at
every stage of their career

The Economic Development Research Partners Program
– EDRP – is IEDC’s “think-tank’’
EDRP partners direct cutting-edge
research that advances the economic
development profession as a whole
 Meet 4 times a year to consult and brainstorm with
peers, coordinate activities, and set the agenda
 Engage in VIP networking opportunities

Economic Development is the
process that policy-makers and
community stakeholders use to
promote the economic well-being
of a specific locality
This entails enhancing the
wealth and the quality-of-life
within a community

There is no single strategy, policy or program
for successful economic development, but
efforts typically focus on:
 Job creation and retention
 Increasing investment
 Tax base enhancement
 Expansion of visitor trade
 Revitalization of older areas
 Engaging in strategic partnerships
Generally improving the quality-of-life
by creating wealth & opportunity

 Business Development Issues:
Business Retention & Expansion (BRE), Marketing,
Business Attraction
 Human Capital Issues:
Workforce Development and Talent Retention
 Fostering Entrepreneurship:
Start-ups & Small Business Programs
 Land Use Issues:
Real Estate Development & Reuse, Revitalization
Redevelopment, Neighborhood Development
 Driving Innovation:
Technology-Led Dvpt., Fostering Innovation
The basic tenets of Economic Development
activities

Shifts and Challenges in the 21st Century
have impacted the U.S. economy
 Globalization occurred and is now
juxtaposed by new rise in protection
 An increase in natural & man-made
disasters and disruptions
 Lack of Diversification (of a local
economy)
 Economic and Social Exclusion

Globalization created larger more
competitive marketplace and a
riskier economy
 Added competition for local
business from global sources
 Increased competition between
communities for jobs, financial
assistance, foreign investment
 People are more connected – and
business today is 24/7
* Over the past few years, we note a
marked increase of protectionist
measures by national governments

Disasters & Disruptions are severely impacting
people and the communities in which they live
 Natural disasters include hurricanes across
the earthquakes, fires, floods, tornadoes
 Man-made disasters include BRACs, human
safety errors, terrorist acts, transportation
disasters, and public relations fiascos
 Disruption can be the loss of a major
employer, new technology, and bumps in the
economy

Lack of diversification and reliance on a single
industry is dangerous to communities, increasing
their vulnerability
 Makes it harder to adapt to a disaster
or economic shift
 Limits the ability to attract new business
 Hinders opportunities to improve the quality-of- life in a
community
Inhibits innovation

Economic inequity is growing in
communities across the nation
 Changing U.S. demographics and the
new economy heighten the need to
cope with disparities
 The growing skills gap and makes it harder
for people to advance
 Blight discourages investment
 Providing people access to good jobs,
transportation & education is critical

In sum, 21st Century shifts and disruptions mean that:
Economic Developers want to build a resilient economic
base for a community & create quality jobs
Economic developers work very hard to recruit, retain,
and expand jobs in their region or community
Companies are increasingly looking “someplace else”
for a higher ROI
There is no simple way to quantify ED performance

Who are the Economic
Development Players

 Federal, State, and Local
Government
 Special Authorities
 Private EDOs
(e.g. business groups)
 Public-Private
Partnerships
 Knowledge-Based
Organizations
 Neighborhood Groups &
Residents
 Port Authorities &
Utilities
 Financial Institutions
Economic Development Players

 Provide funding and technical assistance
 Have regulatory powers
 Offer programs that focus on both rural , suburban,
and urban issues
ED Players: Federal Government

 Department of Agriculture
 Department of Commerce
*Economic Development Administration
 Department of Housing and Urban Development
 Small Business Administration
 Department of Energy
The Key ED Players in Federal Government

 Department of Justice
 Department of Health & Human Services
 Department of Defense
 Federal Reserve
 Department of Treasury
 Federal Home Loan Banks
 Department of Labor
 Environmental Protection Agency
More: The Key ED Players in Federal
Government

States are main providers of ED through state funds and
distribution of federal dollars
 Tax credits, abatements, enterprise zones, other incentives
 Loan and venture funds & technical assistance for businesses
 Education & Workforce Development
 Transportation & Infrastructure
 Trade Development
 Research & Development and Innovation Support
ED Players: State Government

Primary initiator of ED through use of state and
federal funds with authority over:
 Taxing
 Zoning & Permitting
 Eminent Domain
 Issuing Bonds
 General Obligation Bonds, General Revenue Bonds
 Private activity bonds, industrial development bonds
ED Players: Local Government

 Infrastructure
 Commercial revitalization
 Small business development
 Tax-Increment Financing
 Community Development
 Business Assistance
 One-Stop Shops
 Façade Improvement Programs
ED Players: Local Government may
provide:

 Organizations with a mandate to encourage
economic growth, but with no public control of
government nor formal links to government
Examples:
 Chamber of Commerce
 Business Advocate Groups
ED Players: Private EDOs

 Groups which share long-term common goals
related to the social, political, and business
environment in a community
Two-types:
 Unincorporated committee that performs
planning, advisory, policy, and information
dispersal functions
 Non-profit, tax-exempt corporations with financing
and implementation responsibilities in addition to the
above functions
ED Players: Public/Private
Partnerships

 Organizations which often diversify and build the
economic strength of a region with jobs and spin
off industries
 Develop both knowledge and a knowledge-based workforce
 Examples:
 Universities & Community
Colleges
 Hospitals
 National Laboratories
ED Players: Knowledge-Based
Organizations

Community groups with location-
specific wants and needs from the
economic systems
Common Issues:
 Community Jobs
 Quality of Life
 Diverse employment opportunities
for various skill levels
 Land-values
ED Players: Neighborhood Groups
& Residents

Provides vital infrastructure
• This plays an integral role in economic
development decisions on the
community, local, state and federal
levels
ED Players: Port Authorities &
Utilities

 Extends necessary financing to
businesses, neighborhoods, etc.
 Types of Financial Institutions:
 Banks
 Bank CDCs
 Community Development Financial
Institutions
 Community Development Banks
 Community Development Credit
Unions
 Community Development Loan
Funds
ED Players: Financial Institutions

The Role of the ED
Practitioner

 Provide incentives to leverage investment
 Invoke enthusiasm within community for support of
initiatives
 Facilitate regional collaboration and
public-private partnerships
Role of the ED Practitioner

The ED Practitioner is also:
An Analyst: providing quantitative and
qualitative information
A Catalyst: designing programs that
work at the local level
A Gap Filler: providing assistance when
markets and institutions cannot
An Advocate: protecting the interests
of local business and the community

Key 2018 Issues in
Economic Development

Economic developers today are focusing on the same issues as
business and political leadership:
 Loss of traditional manufacturing jobs -> rise of advance mftg
 Trade Deficits
 Low unemployment rates, but increased inequity
 Budget Cuts (at state, county, and city levels)
 Questions over Incentive Use
 Sustainability and the Greening of the Economy
 Workforce Development
 Entrepreneurship

The challenge to attract and retain
business is further complicated by
the use of economic incentives to the
potential business, such as:
 Tax incentives investment capital
 Tailored training deals
 Utility rate discounts

The use of community profiling tools
and database templates to measure
community assets versus other areas
is also an important item in economic
development today

Questions?
Please visit our website at www.iedconline.org
Join IEDC on Facebook and LinkedIn!

Fundamentals of Economic Development

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