The Role of Local Elected Officials in Economic Development: 10 Things You Should Know is part of the Center for Research and Innovation’s ongoing work to provide city leaders with the skills to become informed, strategic decision-makers in economic development. The “ten things” were derived from analysis of successful city programs and interviews with economic development professionals, elected leaders, academics and business organizations.
Once the economic development vision and goals are defined, it is important that they not be shelved, but that they guide and determine you community's economic development strategy. If the community has been involved in the process and believes in the vision and goals, residents will hold political leadership accountable for putting them into practice. Strategic implementation of the economic development vision involves linking economic development goals to specific activities, allocating a budget and staff to these activities, and evaluating performance based on specific, measurable, agreed-upon outcomes.
There are many local activities that can be used to accomplish your city's long-term economic vision. The types of economic development policies and tools pursued by your community will depend on those permitted by your state, as well as how your local government perceives its role in stimulating private sector economic activity.
The traditional local government role in economic development is to facilitate economic activity by off-setting the cost of doing business in your community (in terms of time, opportunity, and money). Strategies include land assembly, modifying the permitting process, and providing job training. More entrepreneurial roles, as well as strategies that more directly address the demand for local products may include seeding and investing in local small businesses, matching gaps in supplier/buyer linkages, and international trade promotion. Local elected officials can work with city staff, business, and other stakeholders in the community to educate themselves about the types of programs and tools that are available to them and to decide which economic development role is best for their city.
You can also look to "best practices" in other communities; however, it is important to remember that economic development activities that work in one place will not necessarily work in another. Following economic development fads or strictly replicating another city's approach without putting it in the context of your community is a recipe for failure. Instead, elected officials can learn how and why another city was successful and adapt those practices to local realities.
Elected officials should also work with their staff to determine a set of expected outcomes, the necessary level of resources (staff and budget) needed to achieve these outcomes, and performance metrics to evaluate and measure them. In the context of short-term political cycles, it may be tempting to stray from the strategy and only consider economic development in terms of traditional, more tangible successes, such as attracting a new, large employer. For this reason, it is important that elected officials and staff agree upon, are committed to and accurately measure even incremental economic achievements. This will allow political leaders to demonstrate success and champion all various ways the community is supporting economic activity.
Strategic implementation of economic development, from selecting activities that support the vision to accurately measuring progress, enables local governments to be more responsive in an increasingly complex and uncertain economic environment. It allows the community, staff, and elected officials to be part of a "continuum" of leadership and to make more deliberate progress toward long-term economic success.
Your Community's Economic Development Vision and GoalsLittleton, Colorado (population 43,055)
In 1987, the City of Littleton pioneered an entrepreneurial alternative to the traditional economic development practice of recruiting industries. The "economic gardening" program, developed in conjunction with the Center for the New West, is as an effort to grow local jobs through entrepreneurial activity.
The approach is based on research that indicates the great majority of all new jobs in any local economy are produced by small, local businesses already in the community. According to Chris Gibbons, Littleton's director of business/industry, an entrepreneurial approach to economic development has several advantages over attraction strategies. First, the cost per job is much less than the $250,000 to $300,000 incentives typical in major relocations. Second, the investment is in the community and its infrastructure; should a business choose to leave, it does not take that investment with it. Third, it is a healthier approach in that a community's future is no longer tied to the whims of an out of state company. Its future is entirely a function of its own efforts and investments.
Littleton's economic strategy focuses on creating a nurturing environment for entrepreneurs and "second-stage" companies, those with 10-99 employees and/or $750,000-$50 million in receipts. In a typical engagement, the city's Economic Gardening team will assist a company with core strategy, market analysis, competitor intelligence, and other priority tasks. Since the start of the program, Littleton's job base has grown from 15,000 to 30,000, the retail sales tax has tripled from $6 million to $21 million, and the population has grown by 23 percent.