Economic Development ~ 10 Best Practices

I’ve been in and around economic development efforts for many years.?It’s an odd industry because it’s one that purportedly values measurable outcomes, but famously doesn’t, generally; at least not useful or truthful ones.?Unlike most industries, economic development ventures value activity over measurable progress, particularly when government is the primary funder.?There are, of course, notable exceptions, though they are just that.?Where real, lasting and meaningful growth occurs, most of the following 10 best practices have occurred.

1. Be Grandiose:?The vision for what the initiative’s growth should look like needs to be truly grand, and long-term?(both in terms of achieving it, and sustaining it).?The overly-ambitious efforts are the ones that succeed, even occasionally, counterintuitively, if the initial vision is not wholly realistic.?There is something to building excitement for achieving big things.?The realism will come naturally and quickly as the effort gets underway, and grand efforts will adjust to the reality that’s required.?But the stakeholders need that initial excitement to reach back to, as the work involved becomes routine.?

2. Fund it Well, and Right:?The funding strategy needs to also be grand, and multi-sourced.?Government efforts that don’t demand a matching private investment only work if that initial public investment is massive – and only if the private investment soon follows at an equal or greater level over a significant period of time.?And not all of this can be “in-kind;” actual dollars have to flow.

3. Be on the Same Page:?Relatedly, every sector of the economy has to be involved.?The levels of investment from each sector don’t have to be equal, and generally can’t be; but everyone has to be on the same page, aiming for and supporting the grand vision.?That means private industry, government, academia, nonprofits and the general public.?Drop any one, and the record of success drops precipitously.

4. Fully Invest the Staff:?The venture has to have a fully-dedicated, paid staff that comes from a stand-alone, dedicated budget; and ideally the staff, not just a board of advisors, includes someone from every sector of the economy.?Volunteer or even part time efforts, and limited stakeholder representation, simply won’t work.?And while consultants can be part of the staff, they can’t be the only part.

5. Make it Actionable:?The vision has to be transformed, and soon after inception, into an actionable and stage-gated strategic and operational plan.?Certainly it should be an iterative plan, but successful efforts are ones that translate aspiration into the mechanics of deliberate, accountable action and frequently measured outcomes.

6. Measure it Correctly:?Metrics matter, and true economic development demands goals that are grand yet realistic, measurable from an initial baseline, relevant to all stakeholders, and attributable to the activity.?Generally the only way to ensure accountability to the plan by honest tracking of metrics is an independent third party – once again excluding a board of advisors.

7. Share With Everyone:?Economic develop efforts are competitive, by nature; but successful growth almost always includes giving away knowledge.?Trying to lead other geographic areas in a particular industry sector should be front and center, as it provides natural incentives that lead to improved energy and performance.?Yet in my experience those that are willing to share lessons and even actively assist other initiatives in direct competition with their own are the ones that make it big.?People tend to share back.?Counterintuitive to be sure – but generally true.

8. Think of Growth Differently:?Growth for growth’s sake isn’t enough.?Related to the grand vision requirement, the truly successful ventures are ones that go beyond growing jobs, businesses and the regional tax base.?Real success generally comes from outcomes that drive peoples’ passions and imaginations – creating wholly new innovations and industries, adding to the nation’s competitiveness or resilience, or solving grand challenges that benefit many.?In other words, the grand vision has to also include outcomes that aren’t “traditional” economic development outcomes as the industry and its practitioners generally defines them.?

9. Enable Business – Only Business Drives Growth:?Knowing what, and who, drives lasting growth is important.?It’s not the initiative’s staff, nor the government, nor nonprofits and business associations, nor generally academia.?It’s business, pure and simple; and it’s generally small business with its innovation and speed.?Every sector is important, and yes critical.?But recognition that business drives growth and everything else is support is a truism that everyone involved needs to embrace.

10. Aim to Put Yourself Out of Business:?The last economic development practice is the most controversial, and most difficult to reconcile for the staff, but is nonetheless equally true and important:?the ultimate goal of the initiative itself should be to eventually make itself irrelevant, and put itself out of business.?One of the reasons that endemic poverty has not been “solved” is the multitude of programs and organizations (generally nonprofits) in place to solve it.?They are incentivized to focus on treatments and not cures; the latter meaning their own ultimate demise.

Like all best practices, these represent ones that I’ve experienced over many years, and believe to be relevant and true.?There are others in the business who can legitimately dispute some, and hopefully confirm some too.?Either way, practitioners would do well to examine and augment their own processes by borrowing from the success of others.?Our nation’s competitiveness depends on a vibrant economic development industry, and frankly we’re generally measuring ourselves!

Chip Laingen ~ 2021