Community Economics – Original material presented by Stephan Goetz, Penn State University

Brief Overview – There are many different strategies that a community can pursue to increase the availability of jobs in the region. Communities should select a strategy or strategies based on their current economic context, available resources, and support from others in the community. Economic development, the act of developing a community’s economic opportunities and health, requires communities to be strategic, well-timed, and prepared. It is not about finding the single best strategy, waiting for the perfect time to start, or doing exactly what the neighboring community does. This week, six strategies – each with their own positives and negatives – were discussed: strategic planning, attracting manufacturing, business retention and expansion, downtown development, tourism and recreation development, and entrepreneurship. All six strategies are fairly complex and I will address these strategies separately, in greater length, in future posts.

 Key Points

• Before selecting a strategy, decision makers should consider a community’s strengths and weaknesses and use data during the decision-making process. Communities have different needs, broadly understanding those needs first can find opportunities for investment and collaboration.
• An initial situational analysis, as mentioned last week and reframed as a strategic planning process this week, can be used to gain a broad overview of the community’s needs and resources before developing strategies.
• Some people narrowly define economic development as increasing the number of jobs in a community by attracting manufacturers to relocate. However, fewer jobs are won in this way than in the past.
  • A better way to continue to engage in external business attraction is to consider what businesses will offer a good fit for the community’s existing businesses, institutions and workforce while positively contributing to the community’s quality of life.
• Strategies require different amounts of investment and risk. Building an industrial park and using tax incentives to attract manufacturers is a high risk and financially expensive strategy. Developing stronger relationships among a community’s business owners and establishing a mentoring program for new companies or people with entrepreneurial ideas is less risky and requires social capital but comparatively little financial capital. Both strategies add jobs to a community and can be pursued simultaneously.

Translating these concepts into practice

• There are a number of resources available for implementing these strategies in your community. Consider the trade-offs between obtaining a more one-time analysis by hiring an outsider or making the investment to build capacity within the community to complete parts of the analysis locally. Choosing to involve the community will likely increase how much the final product is used.
• Find local and regional resources and partnerships. Connect to the local small business development center, the regional economic development district, universities and community colleges, and find ways to connect the community’s youth to business owners and managers.
• Be informed and discuss the risks, costs and benefits of available strategies. Be open-minded about pursuing new ideas, multiple strategies at once, and staging the investment in economic development to best use local resources.

In the next session we will be discussing identifying and navigating power structures in a community.