The Value of Economic Development

To say that economic development is valuable because it brings revenue to communities does not do this profession justice. At its heart, economic development is about building healthy economies in order to have healthy communities.

These are just a few of the ways in which economiuc development helps communities:

• Increased Tax Base…the additional revenue provided by economic
  development supports, maintains, and improves local infrastructure,
  such as roads, parks, libraries, and emergency medical services.

• Job Development…economic development provides better wages, benefits,
  and opportunities for advancement.

• Business Retention…businesses feel appreciated by the community
  and, in turn, are more likely to stay in town, contributing to the
  economy.

• Economic Diversification…a diversified economic base helps expand
  the local economy and reduces a community's vulnerability to a single
  business sector.

• Self-sufficiency…a stronger economic base means public services
  are less dependent on intergovernmental influences and alliances,
  which can change with each election.

• Productive Use of Property…property used for its "highest
  and best use" maximizes the value of that property.

• Quality of Life…more local tax dollars and jobs raise the economic
  tide for the entire community, including the overall standard of living
  of the residents.

• Recognition of Local Products…successful economic development often
  occurs when locally produced goods are consumed in the local market
  to a greater degree.
  

Today, more than 200 California cities provide a full program of economic development services. Significantly, most of the growth in local economic development has occurred during the last twelve years. In that time, California communities have realized that local government plays an essential role in local economic development.

As noted in The Economic Development Handbook:

A focus on economic development helps get economic growth going.

The pressure to provide essential public services in the face of constraints on city finances has led over 50 percent of cities to fund a department or organization, other than a redevelopment agency, to attract business investment in their communities. Promoting local economic development adds to sales tax, transient occupancy tax, and other revenues. Almost 90 percent of city-funded economic development agencies are credited with increasing city revenues.

A recent survey of counties conducted by CSAC found that 71 percent of the 33 counties responding to the survey have an economic development program in the county and 82 percent of those responding have adopted an economic development strategy or have one in progress. Eighty percent of the programs are administered from within the CAO’s Office or by a Department of County Government. This high degree of emphasis indicates that counties are viewing economic development in the same light as cities as a means of improving their fiscal condition.

Additional Resources on Defining ED:

Beyond Words: Branding Economic Development