The economy has changed, and our communities must adapt themselves to some new realities. Traditionally, economic development, rooted in the post-World War II era, attempted to build our export base by subsidizing firms to locate manufacturing employment in our communities. This was fueled by cheap inputs—land and labor, national-scale competition, and low-skilled workers. Industrial recruitment became a popular economic development strategy because of its potential to have significant impacts on the local economy. To a lesser degree, some communities also established programs to work with the existing business base to retain and expand what was already in place. Finally, to a limited extent, some communities supported local small business startups, primarily spin-offs and ventures from the existing business sector.
By contrast, a contemporary strategy builds a solid foundation of entrepreneurship. Entrepreneurship was once ignored because the impacts were small, diffuse, and incremental. Today, entrepreneurship is more appropriately thought of as economic “gardening” rather than “hunting” (industrial recruiting). Think of it as tending to the seedbed in one’s own back yard as opposed to going out to hunt that one trophy animal.
Business growth, or sustaining the health of existing businesses, is also an important component in this more contemporary approach to economic development. However, business growth and viability are based on maintaining a competitive edge rather than just trying to retain and expand businesses.
Finally, the attraction component in the contemporary economic development strategy is broad and comprehensive. It applies to attracting new enterprises, both goods-producing and knowledge-based. However, in contrast to the earlier industrial recruitment approach, it is based on knowledge workers and a culture of innovation rather than cheap land and labor. It also includes attracting different “business anchors” such as senior housing, educational enterprises, and visitors and retirees. These are less traditional but effective ways of increasing the flow of resources into the economy from outside.
This more contemporary approach recognizes that the success of one’s neighbors spills over into one’s own borders. This model also acknowledges that few places possess enough assets on their own to compete for and support new, existing, and emerging businesses. It’s about regions, networks, clusters, and innovation. It's about entrepreneurship!
