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The International Economic Development Council’s

Economic Development Reference Guide

1

Economic Development Reference Guide
Acknowledgements

Verizon
Verizon's mission is to open doors for economic development and to build relationships and
partnerships that help create and retain jobs in Verizon communities
...
Job
creation or retention in a community produces a ripple effect that can have a profound impact on
every aspect of community life, and Verizon's leadership in economic development focuses
primarily on these areas
...

Launched in 2000, the Verizon Foundation serves the nonprofit community on behalf of Verizon
Communications
...


The following individuals and IEDC staff contributed to the preparation and publication of
this report:






Project Management: Courtney Anderson and Shari Garmise
Lead Researcher: David Holman
Online Publication Assistance: Jason Christian, Director of Web Development, and Uli
Luckert
Copy Editors: Katie Burns, Editor, and Corey Taylor
Additional Researchers: Phillipe Accilien and Sherry-Lee Abrahams

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2

Economic Development Reference Guide
What is Economic Development?
No single definition incorporates all of the different strands of economic development
...
These are most commonly
described as the creation of jobs and wealth, and the improvement of quality of life
...
In the broadest sense, economic
development encompasses three major areas:




Policies that government undertakes to meet broad economic objectives including
inflation control, high employment, and sustainable growth
...

Policies and programs explicitly directed at improving the business climate through
specific efforts, business finance, marketing, neighborhood development, business
retention and expansion, technology transfer, real estate development and others
...

As there is no single definition for economic development, there is no single strategy, policy, or
program for achieving successful economic development
...
Each community, therefore, will have a
unique set of challenges for economic development
...
As competition among communities for
increasingly footloose businesses heats up, business retention programs have become the most
popular economic development efforts of communities nation-wide
...
Surveys of U
...
economic development
organizations rank it as the number one economic development activity
...
Retention programs typically involve partnerships among public and
private organizations that assess the assets and opportunities of individual companies through
periodic surveys, interviews, and visitations
...
Business retention initiatives usually include a mechanism
for linking expanding businesses with public programs designed to mitigate growing pains and
regulatory issues
...
Local
businesses have strong community ties, reducing the risk of leaving and BRE programs are often
less expensive than business attraction, yielding more jobs on average
...

Bond programs are created to help lower the cost of borrowing for a business; the interest
on a bond is much lower than on traditional bank loans
...

Tax credits for businesses encouraging business retention and expansion
...
Sharing concerns
such as infrastructure, zoning and quality of life enables a more powerful voice to be
heard, influencing business climate improvement
...

Ensuring business finance availability is an important part of BRE
...
This allows for heavy industry and upscale residential property to
coexist, reducing sprawl
...

Business retention programs may not be directly involved with service provision, but they need
to know how to get a business the assistance it requires
...

Quantitative Measures
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Number jobs created/retained
Number of retained businesses
Cost per job created/retained
Number of businesses visited
Number of businesses surveyed
Number of at-risk businesses assisted
Percent of jobs held by local residents/low income persons
Average salary of jobs created
Spinoff private investment

Qualitative Measures
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Business perceptions of local government
Business perceptions of the community
Relationship between business retention programs and city services available to
businesses (e
...
workforce development initiatives)
Involvement of assisted businesses in other community activities

Web-based Resources for Business Retention and Expansion
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U
...
Department of Commerce
U
...
Department of Commerce International Trade Administration
U
...
Department of Labor
U
...
Small Business Administration
U
...
Small Business Administration Office of International Trade
Business Retention & Expansion International (BREI)

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Economic Development Reference Guide
Brownfields
The United States Environmental Protection Agency defines brownfields as commercial or
industrial sites that are abandoned or under-utilized and have some degree of environmental
contamination, whether real or perceived
...
S
...
Historically, brownfields, which tend to be located in
economically distressed neighborhoods, were not redeveloped because environmental clean-up
costs were high, pertinent regulations were complex, and unclear liability dissuaded both
developers and banks from investing in these projects
...

Brownfields remediation adds new developable land to a community's inventory, uses existing
infrastructure, and adds new construction, investment and jobs to the city
...
Brownfields, therefore, can be important catalysts for economic development
...

Mixed-use projects are tied to efforts to curb suburban sprawl and foster urban
revitalization
...
A recent study found that of 240 sites, 45
...
1 percent for industrial uses
...

In a sample of 107 projects, IEDC research found that $1 of public investment in
brownfield redevelopment leverages an average private investment of about $2
...
We
also found that localities contribute the most public investment in brownfield
redevelopment
...

Partnerships among states, cities and federal agencies can induce redevelopment
...




The redevelopment of brownfield sites has the inherent problem that developer’s may
face liability issues in the future
...

Environmental insurance reduces investment risks attributed to environmental
contamination liability
...

Marketing brownfield sites over the Internet reaches a wide audience with a wide range
of sites available for redevelopment
...

Because brownfields redevelopment tends to cost more than the average redevelopment project
due to remediation expenses and the likelihood that the site is located in a highly distressed
neighborhood, job creation costs tend to be higher and private-sector leverage lower than in
average economic development projects
...

Brownfields projects require long time frames to implement; therefore, practitioners should
expect that economic benefits will increase over time
...

Quantitative Measures
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Number of jobs created/retained
Cost per job created/retained
Private-sector leverage
Percent of jobs to local residents/low-income persons
Average salary of jobs created
Spin-off private investment

Qualitative Measures

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Significance of project to community
Stated project goals and the degree to which they have been achieved (e
...

creation of open space or crime reduction)
Community engagement in the process
Perceptions of the neighborhood
8



Degree and character of public-private partnerships

Web-based Resources for Brownfield Redevelopment
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Brownfield News
The Brownfields Center at Carnegie Mellon University
Center for Public Environmental Oversight
Federal Reserve Bank of Atlanta
Northeast-Midwest Institute
Trust for Public Lands
U
...
Conference of Mayors
U
...
Department of Housing and Urban Development Brownfields Economic
Development Initiative
U
...
Economic Development Administration
U
...
EPA Brownfields Program

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Economic Development Reference Guide
Business Climate
Business climate indicates how states state, regional and local policies, relationships and local
communities support business development
...
While no business climate is perfect for every kind of company,
certain attributes of the regional or local economy allow investors to find fewer risks and higher
returns when compared to other places
...
States
and localities targeting specific sectors fine-tune their regulations, policies and other site location
factors to create a business climate favorable to a specific industry or group of industries
...

De-regulation of utilities has allowed businesses to purchase lower cost energy
...

10

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Income tax is kept as low as possible because many skilled workers demand high net pay
and prefer working and living where they have maximum purchasing power
...

Public and private sector investment initiatives in telecommunications infrastructure
ensure that high speed, high bandwidth communications are available for business
...

Localities focus resources on improving arts, culture and other the quality of life factors
to attract and retain skilled workers that businesses seek
...


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Economic Development Reference Guide
Clusters
Clusters are geographic concentrations of interdependent, complementary and/or competing
businesses in related industries that trade with each other
...

Clusters act as a powerful magnet for business location and create diverse pools of skilled
workers
...
Clusters
thrive on a steady stream of skilled workers, finance, infrastructure and a good business climate
...
Built around core export orientated firms,
industry clusters generate new wealth in a region
...


Key Trends in Clusters

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To prevent talent poaching, regions are using business clusters to identify shared skill
needs to prepare joint workforce development and training programs
...

Communities are targeting clusters that provide well-paid jobs and promise high growth
including:
o Bio-tech
o Pharmaceutical
o Optics
o Information Technology
o Nanotechnology
o Electronics
o Defense
o Aerospace
Resource-based and manufacturing clusters like wood, plastics, brewing, and auto
industries strongly influencing regional economies
...

Clusters working together to attract federal research and development funding
...

Identifying and removing barriers to the commercialization of university-developed
technology and encouraging access to federal laboratories
...

Cluster databases are increasingly combined with Geographical Information Systems
(GIS), creating many applications for land use planning and city plans
...
Commercial and residential growth in
the suburbs has contributed to the decline of downtown
...
Developing downtowns, therefore, involves a range of activities,
including marketing for both business and tourist attraction, building or improving infrastructure,
clean-up initiatives, property redevelopment and reuse, and retention programs
...

Since downtown development encompasses multiple activities designed to meet complimentary
goals, it requires partnerships among local government, chambers of commerce, and publicprivate partnerships - such as business improvement districts and convention or tourist bureaus in order to succeed
...
Strategies that are used include:
o Security surveillance equipment
o Public advice on using public transportation safely
o Environmental design that deters crime, such as improving street lighting
o Positioning of 911 boxes in the streets and other areas
o Security guards
o Ambassadors, which give people important information, such as directions
Arts districts - with their galleries, cinemas, opera houses, artist housing, and theaters are emerging as an important revitalization tool and are continuing to grow in popularity
in downtowns of all sizes
...

Retailers are showing a renewed interest in central business districts (CBDs), due to the
potential size of untapped markets
...
For example the new
convention center in Washington, DC is expected to generate $14 million in economic
stimulus each year
...
Baltimore’s once desolate
Inner Harbor has been developed into a thriving commercial and tourist area
...

Some communities are moving away from developing large projects such as sports
stadiums (attracting people only on game days) towards smaller-scale projects
...

Hotel construction in downtown areas meets the growing demand for accommodation
from people on business, and also acts as a spur encouraging tourists
...

Understanding local markets helps to decide which potential projects will meet local
demand and receive support
...

Downtowns have also developed fiber optic infrastructures to support IT businesses
...

Funding for downtown projects has become more widely available and easier to obtain,
due to public, media and government interest shown in CBDs
...
To evaluate a downtown
development initiative means taking all these components into consideration
...

Since downtown development requires many partners and affects many people, neighborhoods,
and businesses, evaluators need to look at who is involved and the nature of their relationships,
as well as what gets done
...
Since each
community has its distinct vision for its downtown, requiring different packages of programs and
investments, it will be hard to make direct comparisons between community efforts
...

Quantitative Measures
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Number of jobs created/retained
Number of housing units developed
Cost per job created/retained
Vacancy rates for retail and office space
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Absorption rates for retail and office space
Quality of available space (ratio of A, B and C office buildings)
Crime rates
Number of positive press hits on downtown activities, improvements
Tourism rates (number of hotel nights, conference attendance)
Culture (attendance at performances, museums, special events)
Private-sector leverage
Percent of jobs held by local residents/low income persons
Average salary of jobs created
Spinoff private investment

Qualitative Measures
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Number of actors involved in the downtown development strategy and the quality
of their relationships
Types and degrees of public-private interaction
Stated project goals and the degree to which they have been achieved (e
...
crime
reduction, increased retail sales or tourism development)
Community engagement in the process
Perceptions of downtown (cleanliness, accessibility, safety)

Web-based Resources for Downtown Development
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The Downtown Research & Development Center
The International Downtown Association
National League of Cities
National Main Street Center
National Urban League
Urban Land Institute

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Economic Development Reference Guide
E-commerce
E-commerce allows commercial business transactions with the assistance of electronic-based
tools
...

E-commerce consists of four main markets:






Business to Business (B2B), one business selling a good or service to another business
...

Business to Government/Government to Business/Government to Consumers
(B2G/G2B/G2C):
o B2G: Sale of a good or service to a branch of the government
o G2B: Sale of a good or service to a business e
...
Building permits
o G2C: Sale of a good or service to consumers e
...
driving licenses
...


The development of the Internet has been the main force behind the growth in e-commerce,
enabling transactions to be completed quickly, reliably, and securely
...
Downtowns can offer:
o Large open plan offices
o Vibrant urban scenes attractive to young technology workers
o Coincidental meetings on the street with others in the same line of work
o Alternative meeting places
...

Online retail has grown in the U
...
particularly for computer equipment, fresh flowers,
event tickets, books, travel, and auctions
...

Utility competition lowers the cost of access to the Internet, while improving speed and
capacity
...

o High demand for skilled graphics and Web designers, leading businesses to locate
near or recruit from art schools to take tap into their talent pools
...

E-government at the state and local level offers services like permitting and vehicle
registration
...

E-businesses locate near universities and in areas with high qualities of life to attract and
retain programmers and other IT professionals
...

In the future, mobile commerce, or m-commerce, will enables people to buy online from
almost anywhere
...

Entrepreneurs create new goods and services based on new technologies or demands
...
Entrepreneurs are the engines of the economy
in every generation, so many economic development efforts support their needs in the hope of
creating new employment prospects
...
Incubators are
one of the many initiatives used for entrepreneurship development, but programs also include
technical assistance, financing, legislation, marketing, accounting, and networking
...

Skilled individuals leave large businesses to become entrepreneurs because they see:
o New and emerging market opportunities
o Greater career progression/use of skills
o Independence
Graduates and university students in IT-related fields are becoming entrepreneurs in IT,
e-commerce, and electronic engineering businesses
...

Entrepreneur training programs through local colleges give entrepreneurs skills and
business acumen to develop ideas into real businesses
...

Programs aimed at developing women and minority entrepreneurs, often offer technical
assistance, access to capital, administrative services, information, networking, and
incubators
...

States are trying to mobilize networks of angel investors who meet regularly and listen to
presentations from local companies seeking investments
...


19

Benchmarking and Evaluating Entrepreneurship Programs
Programs established to support entrepreneurship also need to weed out individuals who would
not be good entrepreneurs
...
In the case
of this particular type of economic development initiative, drop-out rates may indicate a
successful program
...
g
...
g
...
Incubators strive to accelerate the successful development of new
ventures through low start-up costs
...
Incubators should be
evaluated by the degree to which they meet their unique objectives
...
S
...
S
...
S
...
To help with these problems,
communities can apply to become designated one of HUD's Empowerment Zone/Enterprise
Community Initiative's (EZ/EC)
...

EZ/EC's use federal seed money to create partnerships leveraging public and private investment
to fund revitalization strategies aiming to generate jobs; provide business assistance and services;
train and educate youth and families; improve access to childcare, healthcare and transportation;
and increase residents' safety and involvement in their neighborhoods
...
There are currently 21 urban
Empowerment Zones and 95 Enterprise Communities
...

Recruitment of businesses needing available workers and incentives, such as wage credits
and tax-exempt bonds
...

Establishment of industrial incubators helping community based start-up businesses
...
Economic development
finance meets the capital needs of businesses that are not addressed by traditional lending and
investment institutions
...
In addition,
financial capital helps existing businesses expand and stay competitive
...
These programs usually target small businesses – both at the start-up and
expansion phases – that face strong limitations in their ability to raise debt and equity financing,
including:

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


Small capital requirements
Difficulties meeting their short-term debt obligations
Limited collateral
High debt-to-equity ratios
Exposure to higher risks
Lack of expertise in raising capital, management experience, and financial planning
...

Though these projects may contribute over the long-term to the revitalization and development
of at-risk communities and commercial areas, private financiers may consider them too risky to
support alone
...
Economic development
activities that are funded by TIF include:
o Infrastructure improvements
24

o
o
o

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Acquiring land
Clearing and preparing land for redevelopment
Job training and educational programs
Insurance companies and pension funds provide long-term financing to businesses
...

State and local tax credits encourage investment in specific kinds of businesses, locations
or project types which states and localities target for development
...

Mergers and acquisitions of finance institutions have reduced the availability of smaller
commercial loans which cost more to administer and earn less interest than large loans
...

Some public sector economic development finance programs choose to weigh social
return to the community in addition to financial return as a goal of investment
...
For
example, community development corporations' finance programs often have higher costs than
other business finance organizations because they serve lower income populations
...

When evaluating programs, economic impact differences must be kept in mind
...
g
...
g
...
Because microenterprise finance assists individuals with little or no credit rating, and often with insufficient
business experience, effective programs tend to couple finance with various types of technical
assistance efforts (business plan development, accountancy, marketing plans)
...

Consequently, costs and failure rates may tend to be higher than in larger, less targeted business
finance initiatives
...

Micro-finance is predominately about entrepreneurship development and new, small business
formation
...
Job creation figures should only be a minor consideration in the evaluation of these
programs
...
Similar to general
business finance programs, results vary for different types of financial projects and lending
institutions
...
When
evaluating programs, these economic impact differences must be kept in mind
...

Review of Best Practices for Tax-Increment Financing in the United States
National Association of Independent Public Finance Advisors
National Association of Seed and Venture Funds
National Development Council
National Association of Development Companies
U
...
Department of Agriculture Rural Development Agency
U
...
Small Business Administration

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27

Economic Development Reference Guide
Incentives
Globalization has led to competition between nations, regions, and communities to attract and
retain businesses that are moving or expanding
...
Economic development incentives can be either financial or non-financial, such as tax
exemptions and credits or workforce training and public infrastructure improvements
...
Before offering an incentive, an economic development practitioner should analyze
the cost and benefits of providing the incentives in terms of both dollars and social returns
...
When
businesses choose between two or more sites/communities, they weigh several factors of the
business climate important to their industry
...
Competing communities may
choose to bargain with the business and even to out-bid one another
...


Trends in Incentives

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The variety of incentives continues to grow as more state and local governments create
and customize incentives to be comparable or competitive with each other
...

Performance-based incentives require businesses to deliver promised jobs and payroll to
the public
...

Recipients of economic development incentives often have to guarantee job quality
standards ranging from wage and health insurance to full-time hours rules
...
Arizona does not allow TIF laws
...

Many economic development organizations use workforce and infrastructure
development incentives more than tax-based incentives for economic development
...

Rebuilding the physical infrastructure of a community improves the local business climate and is
critical to the redevelopment of distressed neighborhoods
...
Many distressed neighborhoods suffer from inadequate
infrastructure, decreasing their access to economic opportunities and their ability to integrate into
wider city, national, and international markets
...
Additionally, modernizing physical
infrastructure can help improve the image of a distressed neighborhood
...
Many manufacturers operate a "just in time"
30

supply and delivery process, which requires a highly efficient transportation infrastructure
...
Telecommunications companies and utilities, such as water
and electricity, are also upgrading their services to cope with growth in demand
...

Old warehouses and empty office buildings near fiber optic lines are becoming carrier or
teleco hotels to house transmission equipment for telecom businesses
...
50 to $5 per square foot may command $10 to $12
per square foot and more
...

Competitive Local Exchange Carriers (CLEC's) are increasingly the main tenants of these
buildings
...

Electricity suppliers are being asked to supply as much as 100 Watts of electrical power
per square foot, creating new demand
...

The U
...
Maritime Administration's Marine Transportation System (MTS), consists of
waterways, ports, and intermodal connections which allow various modes of
transportation to move people and goods to, from, and on the water
...

Increasing demand for air travel exerts pressure on airports to remain efficient, free of
congestion, and safe
...
S
...

Some communities use tax increment financing for infrastructure improvements, such as
road repairs, utility upgrades and raising low-level clearance viaducts
...
Economic impacts of
infrastructure improvement should only be critically evaluated after an appropriate period of time
has elapsed
...
The degree to
which public agencies involve the community in these efforts will influence how smoothly the
project procedes
...

Quantitative Measures
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Jobs created/retained
Amount of investment generated
New businesses created

Qualitative Measures
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Community involvement and support
Conditions of roads, transportation services
Stated project goals and the degree to which they have been achieved
Improved physical access to the community
Access to information technologies at reasonable prices
Access to energy sources at reasonable prices
Perceptions of the community

Web-based Resource Links for Infrastructure

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

Bureau of Transportation Statistics
Federal Rail Road Administration
Federal Transit Administration
Metropolitan Atlanta Rapid Transit Authority (MARTA)
U
...
Department of Transportation

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Economic Development Reference Guide
Economic Development Marketing
Communities market to achieve multiple economic development objectives including:





Attraction, retention, and expansion of businesses
Attraction and retention of residents and tourists
Improvement of the community's image locally, nationally, and internationally
Promotion of policies and programs

Communities can market the community as a whole, individual properties or sites, particular
neighborhoods or specific programs or policies
...
Alternatively,
when businesses leave the area, they eliminate jobs and have negative economic consequences
on other businesses in the area that had relied on their patronage
...

Many organizations contribute to a community's marketing activities – state and local
governments, chambers of commerce, utility companies, regional organizations, community
development corporations, property developers, hospitals, universities, and hotel, convention and
tourist bureaus
...


Trends in Economic Development Marketing

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



Manufacturing businesses have traditionally been the target of marketing
...

According to Development Counsellors International (DCI) 1999 survey of site location
professionals, the role of web-based marketing increased two-fold from 1996
...
com help to distinguish State and city economic
development sites
...

Television ads promoting jobs and industry are used to recruit talented workers
...

33

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Practitioners advertise the capabilities of the entire region as well as their community
...

Economic development practitioners target a particular industry in a country/region or all
industries in a region through cluster analysis, sectoral analysis and geographic targeting
...

Public-private partnerships and entities increasing conduct regional marketing
...


Benchmarking and Evaluating Economic Development Marketing Programs
Communities use marketing to achieve different objectives
...
Marketing efforts should be evaluated to the degree their marketing campaign
meets their economic development objectives
...

Thus, how and the degree to which coordination occurs should be considered in the evaluation
...
g
...
Like downtown development, it includes a range of initiatives that target multiple - but
complementary - development goals including business development, infrastructure
improvements, workforce training, facade improvements, amenity development and property
reuse
...

Many organizations in the community should contribute to neighborhood revitalization
...


Trends in Neighborhood Economic Development
Inner city neighborhoods have been in serious decline for many years, people have moved out of
the cities due to increased crime, high property prices and taxes
...
Key trends include:









Promoting minority business development is an essential part of many revitalization
programs
...

Crime reduction is a precursor to neighborhood economic development
...
S
...

The Community Development Financial Institutions(CDFI) Fund assists in the expansion
of credit availability, investment capital and financial services in distressed urban and
rural communities
...

36


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

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
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Community Development banks focus services on improving the economic health of
neighborhoods they are located in
...

Mixed-use land use in neighborhoods are becoming a key part of neighborhood economic
development, serving as hubs for neighborhood services such as youth training, health
services
...

Collaborative efforts between local governments and institutions, neighborhood residents
and the private sector to provide services are on the rise
...

Development of venture capital funds for neighborhood development
...
Many social entrepreneurs are coming together for the well being
of communities
...

Community Development Corporations run by professional staff and citizen boards take
responsibility for improving an area or community that they live in
...


Benchmarking and Evaluating Neighborhood Revitalization Programs
Since neighborhood revitalization seeks to improve the economic, social, and physical conditions
of the neighborhood, evaluation must emphasize qualitative improvements in the image and
quality of life of a neighborhood
...
It can
take many years, if not decades, to turn neighborhoods around
...

Community participation and public-private partnership development are both conditions for and outcomes of - neighborhood revitalization
...

Quantitative measures






Number of new businesses
Number of retail and consumer businesses
Number of vacant or underutilized sites rehabilitated or reused
Business failure rates (or ratio of startups to failures)
Number of jobs created
37

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Cost per job created
Percentage of women and minorities assisted
Number of local residents hired
Private sector leverage
Available amenities

Qualitative measures



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



Diversification of businesses (e
...
new industries, new services)
Stated project goals and the degree to which they have been achieved
Physical appearance of local businesses, local buildings and the neighborhood in
general
Neighborhood residents and businesses satisfaction with services, shopping,
amenities and the physical appearance of the neighborhood
Range and quality of public-private partnerships to support neighborhood
initiatives
Community involvement in initiatives (local residents and local businesses)
Changing use of the neighborhood (e
...
more people using the local park, easier
access to the neighborhood)

Web-based Resources for Neighborhood Economic Development





Community Development Financial Institutions Fund
Executive Office for Weed and Seed
National Congress for Community Economic Development
Community Development Venture Capital Alliance

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38

Economic Development Reference Guide
Public-Private Partnerships
Public and private organizations often come together, forming non-profit organizations with the
aim of:






Undertaking economic development efforts
Promoting sustainable business
Improving workforce development
Diversifying the economic base of a region
Improving the quality of life

Both the public and private organizations who form these non-profits contribute either
financially or "in kind" support (i
...
administrative support, grant writings, etc
...
These organizations have
greater flexibility than the public sector to conduct economic development activities since they
do not have to answer to such a broad constituency
...
The form of most publicprivate partnerships is very similar; however, the aims of many partnerships vary
...

Universities create partnerships targeting economic development in their communities
...

Communities have formed public-private partnerships to build fiber-optic
telecommunications networks
...

o SmartCities, Kansas City
o Tampa Bay Partnership

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40

Economic Development Reference Guide
Quality of Life
Quality of Life is the economic well being, life style, and environment that an area offers
...
A balance has to be maintained between encouraging the growth of the local
economy, while limiting impacts upon the quality of life
...
The report shows that quality of life is now the main
consideration in selecting a place to work:
"Young worker lifestyles fit no earlier pattern in history
...
They marry late and have fewer children
...

They move around among jobs and locations and they'd just as soon rent as buy
...
Many prefer to walk, bike, or roller-blade
to work than drive
...
They want the environment
protected and they see the outdoors as an amenity
...
They've money to spend
...
They're into authenticity
...
"

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Talented youth, the new key to any truly successful economy, look for high-grade natural
environments and places with real urban charm: sociable and walk-able places with
restaurants, cafes, bars, night clubs, health clubs, and public spaces
...
Relocating or expanding businesses also place a strong emphasis on education
standards to encourage existing employees to move, attract new employees, and to take
advantage of a well-educated workforce
...
Many areas are trying to attain a mix of urban and rural to help
foster new economy businesses and workforce
...
Rural/suburban lifestyles cater to a familyorientated workforce
...

Professionals planning to start a family are moving from California and New York to
areas such as Philadelphia, which offer lower costs of living, less pollution, open spaces,
and lower crime, while offering employment in similar fields or enabling professionals to
begin their own business
...
Many factors influence the
decision of a company or an individual to move into or out of a city, with a major
consideration being the city's quality of life
...
Improving the quality of life through the
expansion and enhancement of public open space is a key initiative of many urban areas
...


Web-based Resources For Quality of Life







Congress for New Urbanism
International Society for Quality of Life Research
The Argus Foundation
National Institute for Family Literacy
American Library Association
Literacy Volunteers of America

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Economic Development Reference Guide
Real Estate Redevelopment
Vacant and older buildings blemish many urban neighborhoods, contributing to blight, crime,
and perceptions of the neighborhood as an undesirable place to live and do business
...
The Urban Land Institute estimates that the United States holds
876 million square feet surplus of industrial space, which present threats to neighborhoods if left
unattended, and opportunities if reused or redeveloped
...
Redevelopment consists of demolition with new
construction, or the process of improving an area through both new construction and property
reuse
...
Reuse and
redevelopment projects, often located in distressed neighborhoods, are usually high-risk
development projects from a private sector point of view, and require public action to leverage
private activity
...
Redevelopment and reuse provide
ways to rebuild neighborhoods economically, remove blight, and improve the quality of life
...

Urban economic developers may become involved in real estate redevelopment to revitalize their
core areas and retain firms within the city limits
...
Many cities in the United States are littered with empty shells of buildings that
once housed manufacturing firms, derelict shops, and huge empty warehouses
...
The following are key trends:


Buildings are being reused for mixed-use projects incorporating retail, office, and
housing, or solely as office developments
...
Mixed-use development
can capitalize on this by including multiple components that serve different markets
simultaneously
...

Carrier hotels for IT businesses are being developed from old warehouses in urban cores
because these buildings offer high load bearing capabilities and high ceilings essential
necessary to store large amounts of equiment
...

Public finance continues to play a crucial role, especially in the revitalization of
distressed neighborhoods
...

Real estate redevelopment is often part of downtown and neighborhood development
...

Redevelopment projects addressing environmental concerns include features like:
o Quality insulation to cut HVAC costs
o Natural lighting to cut electricity costs
o Solar-heated hot water
o Reuse of building materials, such as bricks from demolished buildings
o "Smart" buildings, which sense when people are (not) present and adjust heat,
lighting, etc
...

Military bases are often redeveloped for economic development purposes
...
Evaluation, therefore, should consider both
...
Studies of EDA projects showed that full jobs-creation impacts often take six
to ten years to emerge
...

Because property reuse and redevelopment may not create as many jobs as business finance,
retention, or attraction programs, it should be evaluated using a wide range of indicators
...
Job creation is only one of several key objectives, so it should be used as one of the
judging criteria, not the main criterion
...
g
...
Typically it is described in terms of
its objectives: these are most commonly described as the creation of jobs and wealth, and the
improvement of the quality of life in rural areas
...
For rural communities, the challenges are very
different from those in urban areas
...

Rural America is home to one-fifth of the nation's people
...

Today, rural America comprises more than 2,300 counties, including 83 percent of the nation's
land and 55 million people
...
These include:
o The Empowerment Zone/Enterprise Community (EZ/EC) program
o Community Development Financial Institutions (CDFI) Fund
o Community Adjustment and Investment Program (CAIP), assisting areas
impacted by the North American Free Trade Agreement (NAFTA)
EZ/EC programs include economically depressed rural areas and communities with real
opportunities for growth and revitalization
...

They also aim to demonstrate how distressed communities can achieve self-sufficiency
through innovative and comprehensive strategic plans developed and implemented by
alliances among private, public and nonprofit entities
...

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

Small Business Investment Companies (SBIC) programs target venture capital to lowand moderate-income areas
...

Sustainable rural community development are being promoted by the U
...
Department of
Agriculture (USDA)
...
Federal assistance for
telecommunications infrastructure funding is also available through the USDA's
telecommunications loan program
...

Cars donated to rural nonprofits are repaired, then loaned, leased, or given to rural
residents who need car access, enabling them to commute to work
...

The Grahm-Leach-Bliley Act of 1999 allows banks, securities firms, and insurance
companies to merge, which enables rural consumers to one-stop shop for a variety of
financial services
...

To help combat the problem of the rural technology gap, distance learning and universal
Internet access in schools and libraries are subsidized
...

Farmers have adopted technology including the use of the latest chemicals and
machinery; however, pressure is put upon farmers to use environmentally friendly
farming practices, and has led to a growth in organic farms
...


Web-based Resources for Rural Economic Development










United States Department of Agriculture, Rural Development
Home of the Rural Empowerment Zone and Enterprise Community Program
American Farmland Trust
The National Rural Economic Developers Association
American Planning Association
Center for Rural Studies (CRS)
Community Toolbox
Applied Rural Telecommunications (AeRie)
Appalachian Regional Planning Commission

47

Economic Development Reference Guide
Site Selection
Site selection is the process by which firms find new locations for business facilities or
expansions of their operations
...
New facilities often mean new jobs, new investment,
and an enhanced tax base
...

Though most new locations are within the same region and about 60 percent are due to
expansion, communities market themselves extensively to expanding firms and to independent
third parties called "location professionals"
...
This
data is submitted by the community, often on short notice
...

Good data collection provides a competitive advantage to communities that are able to chart
economic, industrial, and workforce trends
...
Web sites offer extensive information about the community 24 hours a day,
seven days a week and can be downloaded at any time from anywhere in the world
...
Communities with quick,
flexible data presentation capabilities have an advantage in the site selection process
...

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Performance-based incentives are used to attract businesses and assure tax payers that
they will recoup public investments like tax abatements, land write-downs, etc
...

The availability of skilled workers is a high priority, sometimes more so than financial
incentives
...

Buildings are being retrofitted with fiber optic cable to attract tenant firms, especially
small technology firms, that need fast, high-bandwidth connections to the Internet
...

Attracting and retaining skilled workers requires that firms seek out places offering a
high quality of life that is vibrant and exciting for a wide range of people and lifestyles
...

Remediation usually occurs with the use of redevelopment incentives for manufacturing
and some retail end uses
...

Site location professionals conduct 30 to 55 percent of all site selection searches, creating
demand for new U
...
and international site location consulting firms
...


Web-based Resources for Site Selection











Area Development Magazine
DevelopmentAlliance
Business Development Outlook Magazine
Business Facilities Magazine
Expansion Management Magazine
Harris Publishing
Lexis-Nexus
Plant Sites & Parks Magazine
Site Selection Magazine
STAT-USA

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49

Economic Development Reference Guide
Small Business Development
America's 25 million small businesses employ more than 50 percent of the private work force,
generate more than half of the nation's gross domestic product, and are the principal sources of
new jobs in the U
...
economy
...

Since the U
...
Small Business Administrations's definition of small business is any business with
fewer than 500 employees, small businesses vary widely in size and character
...
Small businesses often require economic development finance tools and programs to
grow and develop new products
...


Trends in Small Business Development












Community Development Block Grants and tax increment financing are used as a source
of funding for local entrepreneurs and small businesses usually on condition that the
money will contribute to increasing the size of the business workforce
...
Small business incubators provide office space, administrative
assistance, funding information such as links to venture capital and proactive
entrepreneurial mentoring
...

Business improvement districts fund activities and improvements, such as streetscaping
and stronger law enforcement, which benefit small retail businesses in commercial areas
...

Small e-commerce businesses ranging from Web design to online retailers allow
entrepreneurs to sell goods and services all day long, all around the world, with minimal
investment in bricks-and-mortar storefronts
...

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Fee-based small business buyer's consortia make members eligible for bulk discounts on
raw materials, such as food products and metals or other inputs like broadband service
...
S
...
S
...
S
...

Our current pattern of growth, sometimes known as sprawl, has a number of negative cultural,
economic, environmental, and social consequences
...

In newer suburban areas these problems may include increased traffic congestion and declining
air quality, the absence of a sense of place, and the loss of open space
...

To address these problems, smart growth emphasizes the concept of developing "livable" cities
and towns
...
Smart growth
demands comprehensive planning, driven by input from affected people on real outcomes cast in
terms of the needs of both present and future people along three main strands:




Economic
Environmental
Social well-being

Trends in Smart Growth







Smart growth is focused on reversing the trend of isolated poverty in urban cores,
through revisions to the federal tax code, federal housing program incentives, and
regional tax base-sharing strategies, in order to reduce fiscal disparities among localities
...

Transportation and land use are being integrated to reduce pollution by:
o Creating and extending cycle routes
52

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Developing more integrated mass transit systems
Building pedestrian-friendly streetscapes
Barriers to brownfield redevelopment are being removed or lowered
Infrastructure in existing neighborhoods is being rebuilt or modernized
...

Focus has increased on participatory planning, including cooperation between
environmentalists and developers
...

Downtown development has become a key component of smart growth strategies
...
More and more financing is going to the development of buildings that save
energy, reduce raw material use through using recycling building materials, and are
designed to fit in with the surrounding environment
...


Web-based Resources for Smart Growth





American Planning Association, Growing Smart
Smart Communities Implementation Guide
The Smart Growth Network
Sprawl Guide (Planning Commissioners Journal)

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53

Economic Development Reference Guide
Sustainable Development
As described by the World Commission on Environment and Development, sustainable
development is the process of change in which the exploitation of resources, the direction of
investments, the orientation of technological development, and institutional change are all in
harmony and enhance both current and future potential to meet human needs and aspirations
...
Sustainable development brings together matters such as land use planning, an
integrated transport policy, housing and construction, and regeneration of cities, towns and rural
areas
...


Trends in Sustainable Development







Rapid growth in land consumption, which has a potentially negative effect on the
environment, transportation, and infrastructure in both cities and suburbs has helped
create smart growth initiatives
...
This leads to a reduction in pollution and resource use, because the demand
on fossil fuel-burning electricity generators is reduced
...

Urban areas are developing and promoting alternative environmentally-friendly methods
of transport, through:
o Creating and extending cycle routes
o Developing more integrated mass transit systems
o Building pedestrian friendly streetscapes
54

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


There has been a move towards the involvement of social partners and policies that
promote sustainable development
...

Brownfields redevelopment enables remediation of contaminated sites, and provides
prime real estate
...


Web-based Resources for Sustainable Development








Center of Excellence for Sustainable Development
Great Lakes Growth Council
International Centre for Trade and Sustainable Development
International Institute for Sustainable Development
Southern Growth Policy Board
State Science and Technology Institute
United Nations Commission on Sustainable Development

» Back to Table of Contents

55

Economic Development Reference Guide
Technology-led Development
Technology-led economic development fosters the development of new technology-based
products and encourages the deployment of technologies to the private sector
...


Trends in Technology-Led Development
Less than a decade ago, technology-led development focused on technology transfer and
deployment initiatives
...
From 1995
to 1998, information technology industries accounted for one-third of the nation's real economic
growth and created demand for these kinds of firms in many local communities
...

Encouraging students to enter science and engineering fields
...

Technology report cards enable communities to gauge their technology business climate
...

Developing Technology Innovation Centers supporting start-up technology businesses
...

Increase in the number of programs that commercialize R&D such as manufacturing
extension partnerships, and consortiums
...

Matching out-of-town companies needs with technology companies in a geographic area
...

State and local investment in technology infrastructure such as fiber optic cable and
wireless communications ensures high speed and high bandwidth Internet access for
businesses and residents
...

The U
...
Economic Development Administration (EDA) funds community technology
transfer projects
...

Removing barriers to commercializing federal laboratory technologies
...

Technology parks attract start-up and leading businesses in IT, biotechnology, and
advanced materials by offering below-market office space, finance acquisition, business
plan development and providing mentoring services
...

Transforming city center buildings into high tech carrier hotels for Competitive Local
Exchange Carriers (CLEC)
...

State government agencies increasingly provide services to the public via the Internet
...

Manufacturing Extension Partnerships
National Governors Association
National Institute of Standards and Technology
National Science Foundation
Public Technology, Inc
...
Tourism attracts temporary visitors to places where they
purchase goods and services before leaving
...
Both rural and urban localities
based their visitor attraction strategies around favorable local advantages such as a climate,
history, and cultural and natural resources, which attract visitors
...
For this reason,
many local economies diversify their existing economic base with complementary tourist
activities
...
For these
reasons, some communities prefer not to make tourism their keystone for economic growth
...
Heritage tourism is travel based on an
interest in history, culture, or a region's natural resources, harvesting existing assets and
boosting home-grown economic development
...
The main motivation
of the tourists is the observation and appreciation of nature as well as the traditional
cultures prevailing in natural areas
...

Local communities of all sizes host celebrations and events which draw visitors
...

Rural tourism draws on remoteness and natural resources to attract visitors
...

Some states partner together to promote regional tourist attractions and create new
opportunities to boost economic development
...


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Easing of gaming regulations enables communities to use anchor casinos to spur
economic development initiatives, development of public amenities and infrastructure
improvements
...


Web-based Resources for Tourism








Department of Commerce, Tourism Industries Office
Listing of State Departments of Tourism
Travel Industry Association of America
United Nations Environment Program, Division of Technology, Industry and Economics
(DTIE), Tourism Activities
World Tourism Organization
World Travel and Tourism Council (WTTC)
Examples of Local Celebrations and Events:
o Boston Marathon
o New Orleans Mardi Gras
o Pasadena Tournament of Roses
o Philadelphia Flower Show
o Scottish Highlands Games and Clan Gatherings
o Tampa Bay Gasparilla Pirate Fest
o Whitwater Canoe and Kayak Events

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Economic Development Reference Guide
Export/Trade Development
Export/trade development and promotion enables firms to expand their market area and possibly
extend the life cycle of products or services that have exhausted their existing markets
...

Exporting can contribute to a firm's sales volume and create new jobs for the local economy
...
The
export process is not necessarily linear or systematic, however firms usually:





Become aware of exporting in general
Determine whether to make an initial investment
Identify marketing opportunities
Assess competitive challenges

Trends in Export/Trade Development
With the development of NAFTA and increasing global trade, US businesses can look at new
markets for their products and services
...







Within the NAFTA region, U
...
businesses can export products and services with low
tariffs
...

The Internet has facilitated export growth in four primary ways:
o Web sites penetrate markets around the globe, 24 hours a day, seven days a week
at a low cost
...

o Businesses and their clients can transfer accurate product or service specifications
at high speeds across any distance
...

The U
...
Commerce Department's Economic Development Administration (EDA)
awards grants to help increase the export capacity of small and minority owned firms
...

States dedicate resources to assist existing and potential exporting companies
Local organizations are supporting the export capabilities of local businesses, often
targeting small and minority owned businesses, through training on the export process
and marketing
...
Strategic alliances are usually based on
licensing agreements, allowing foreign firms to produce the business or service in their
domestic market
...
S
...


Web-based Resources For Export/Trade Development


Export-Import Bank of the United States



International Economic Development Trade Associations and Networks
o Association of Southeast Asian Nations (ASEAN)
o British Urban Regeneration Association (BURA)
o Economic Developers Association of Canada (EDAC)
o European Association of Development Agenicies (EURADA)
o International Network of Economic Developers (INED)
o Local Economic Development and Employment Development (LEED) of the
Organization for Economic Co-Operation and Development
North American Development Bank
U
...
Department of Commerce International Trade Administration
U
...
Small Business Administration Office of International Trade
o Small Business Administration Office of International Trade- Export Finance
o SBA Guide to Exporting
World Trade Organization

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

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Economic Development Reference Guide
Transportation
Transportation moves people and goods from one place to another
...
Transportation
enables the trade of goods and the movement of workers to occur; thus it is vital for economic
development
...
Transportation is a key component of business
climate and quality of life
...

Just-in-time inventory systems are likely to move inventory out of warehouses and into
the transportation system, requiring both system capacity and greater reliability
...

Air cargo demands will grow in response to e-commerce and globalization with larger
aircraft dedicated to freight and passengers carrying as much cargo as possible
...

The United States has signed 37 Open Skies agreements with other nations to open new
markets and create opportunities for international air service
...

The development of the Airbus A380, to be in service by 2006, will carry up to 800
passengers (almost double a 747) and has forced U
...
airports to plan runway extensions
to accommodate the aircraft
...

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Dense traffic threatens quality of life rankings for relocating and expanding businesses
because workers and goods are difficult to transport
...

The Marine Transportation System transports goods and people to, from, and on
waterways in a technologically advanced, safe, secure, efficient, and environmentally
sound manner
...


Web-based Resources For Transportation








American Association of Port Authorities
The Eno Transportation Foundation
U
...
Department of Transportation
U
...
Department of Transportation, Federal Highways Administration
U
...
Department of Transportation, Marine Administration
U
...
Federal Aviation Administration
U
...
Federal Railroad Administration

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Economic Development Reference Guide
Venture Capital
Venture capital (VC) is professionally-managed equity money (money for stock), that is repaid
by capital gains through the sale of stock
...
With average investments well over $1 million, venture capitalists seek high rates of
return by investing in high-risk, early-stage businesses
...
Typical investee companies have demonstrated sales, but
are not yet profitable
...


Trends in Venture Capital








High-tech businesses often need venture capital up-front in their idea stages, often before
any product is established
...

To help stem entrepreneur migration to places with strong venture capital resources such
as Silicon Valley and Boston, states have pursued private capital for seed venture funds
...

Venture capitalists may steer their struggling start-ups to better business models to
sustain them or to yield earlier profits
...

Venture capitalists investing in technology look for quality science and a first-rate
management team
...


Web-based Resources For Venture Capital






Capital Growth Interactive
MoneyHunter
National Association of Seed and Venture Funds
National Venture Capital Association
Venture Finance

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Economic Development Reference Guide
Workforce Development
Workforce development and/or training refers to community efforts to train individuals for
specific jobs or industries
...
Community workforce efforts may also include job placement
assistance, resume writing, interview skills, and retention services such as legal advice and child
care, that help people stay in a job once placed there
...
A good workforce training program, therefore,
serves two customers: individuals and businesses
...
By 2020
almost 20 percent of the U
...
population will be over 65 years old
...
1 percent growth of labor supply and a 2
...

Suburban areas experience approximately 30 percent more high-tech business growth
than do cities
...

Former welfare recipients, mature workers, the disabled, dislocated workers, and other
low-income individuals provide new talent the labor pool
...

Formalized business clusters can delineate shared skill needs and standards to alleviate
concerns over talent poaching and to develop joint workforce training curriculas
...

Partnerships pool and leverage a range of financial, physical, human and intellectual
resources and provide a collective voice for workforce development funding
...

Cities are establishing programs to retain local university graduates who posses needed
skills for high tech firms
...

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Corporate universities offer specialized certifications and diplomas such as Microsoft
Certification
...

Firms seeking new locations are interested in data that shows the level of unionization
and employee/management relationships
...
Individuals need training that supports their aspirations and
businesses need employees that serve their needs
...
Business involvement in programs, therefore, is critical
...
Placement rates
are only one part of the picture
...

Quantitative measures








Number of individuals trained
Number of individuals placed
Retention rates (lengths of time individuals stay in a job)
Percentage of women and minorities assisted
Cost per person trained
Number of businesses hiring from the training program
Number of businesses that keep coming back for new hires

Qualitative measures





Business involvement in design of training program (e
...
identifying skill
standards)
Type and range of supportive services (e
...
retention services)
Stated project goals and the degree to which they have been achieved
Follow up (does the program follow up with businesses and individuals to ensure
that training is appropriate)

Web-based Resources for Workforce Development




ACT Workkeys Program
ERISS
Hudson Institute
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

National Association of Workforce Development Boards
State Programs
U
...
Department of Labor

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