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 economic 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, Retention, and Attraction…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.
- Improved 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, most of California’s cities have a full program of economic development services. Significantly, most of the growth in local economic development has occurred from the 90’s through today. In that time, California communities have realized that local government plays an essential role in local economic development.
As noted in CALED’s 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 past 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.