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 Dr. Sarah Coffin, assistant professor of public policy in SLU’s College of Public Services. |
STRATEGY FOR THE COMMUNITY
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ECONOMIC DEVELOPMENT STRATEGISTS HAVE MUCH TO CONSIDER
By Sue Britt
It’s a catch phrase, economic development. Simple enough to understand;
creating jobs and wealth in the community. But there is really a lot to consider. It involves development policies that consider the fiscal needs of cities and their people, based on ideologies and what role the government should play in guiding growth, Sarah Coffin, assistant professor of public policy in SLU’s College of Public Service, says.
“(Economic development) can mean a lot of things. It’s not just income,” Bob Lewis, principal at Development Strategies, says. “It’s values; property values, real estate values, business values.”
It’s typically carried out two ways, the place-based theory (targeting a certain location for development) or people-oriented (looking for the needs of people and industry).
Economic development strategists must consider which industry sectors are in growth, which are in decline, which are importing, which are exporting, and who the people of the community are, Coffin says. “Economic development considers all of these factors. How you approach it depends on what role you want the government to play in that,” Coffin says.
Regional and local leaders direct development in specifics ways, using tools to attract development, such as empowerment zones, tax increment financing, infrastructure improvements, and tax abatements, Coffin says. “National and state level agencies enable it, but mostly it’s local,” Coffin says.
There are many schools of thought in economic development, Coffin says. Economics-based theory uses multipliers to measure how many jobs are created in support industries for every basic job created to export goods. Product-cycle theory predicts trends in industry based on where products are in the
product cycle; development, consumption
patterns and, as the interest declines, predicts the shifts in the sector. Production-line theory speaks to the increase in productivity, as
people become experts in a particular job.
Technology has increased production even more. “As we have advances of technology and technology has taken place of the human input, one person can do more jobs,” Coffin says. “Technology shifted and allowed for more flexibility on the production line.”
Central-place theory explains the different growth prospects within the central business district, rather than a region. It calls for a central business district, supported by satellite areas that supply the resources. “Look at where all the industrial development is. It’s all along the river and the rail corridors. It’s not downtown,” Coffin says. “The city itself needs to hang on to the idea that it is the central business district. That’s where the tension is right now between the city and the rest of the region.”
There needs to be a regional focus, to keep industry in place and healthy, Coffin says. MasterCard’s move out of St. Louis County is a good example of collaborative work with regional leaders, Lewis says. Leaders quickly recognized, maybe in the long-run it would be better to help them to expand here in the region. “We didn’t have enough space to put them (in
St. Louis County), but, by golly, we weren’t going to let them go to Dallas,” Lewis says.
Collaborating to that extent is controversial and hard to implement, but was done in the region, “because everyone wants to keep (MasterCard),” Lewis says. “A certain amount of altruism comes through.”
| Bob Lewis, principal, Development Strategies. |
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Diversity of business is important as well. Relying heavily on sales tax suggest there’s a very unstable future should the business that feeds this revenue source leave. “It goes well beyond simply bringing a Wal-Mart into your community…there needs to be diversity within your economy. When you only depend on retail for your revenue stream, it is potentially very unstable,” Coffin says. “Retailers can pull up roots and go elsewhere. Whereas, an industry tends to settle down and put in roots.”
Another important public aspect to economic development is keeping the public infrastructure up-to-date and maintained. Not just roads and bridges, but channels and canals, airports, utilities, power companies and technological infrastructure such as fiber optics. “If those things are weaker than elsewhere, you’re in a weaker position,” Lewis says. Being an attractive place with a lot of amenities where people want to live is key.
“When you’re looking at bringing back a community, or supporting a strong economy, this idea of quality of life becomes increasingly important,” Coffin says.
People need a place where they can get a job, they can get a house, but it’s more than that. It’s fantastic parks or a good school system that adds to quality of life.
“In today’s economy the labor force is very mobile,” Lewis, says. “People pick places where they want to be.” People want to go running, see a ball game, go to cultural institutions, coffee houses, have loft living, public transportation, bike paths, and other retail that are more upscale or alternative in nature, Coffin says. “Economic development strategists need to consider that as well,” Coffin says. “It’s important when outside firms are looking for places. They want to have employees who love where they live.”
Drawing workers in technology fields, or the creative class, to a region is important, Coffin says. “A successful urban environment is a place where those of the creative class feel comfortable,” Coffin says. “Attracting the creative class gives you more depth in your community. It adds to the excitement of the area.”
“It’s better these days to attract a good and happy labor force than to chase companies. Companies can be anywhere, given the nature of the way things are built,” Lewis says.
The RCGA is beginning a new five-year
strategy in January, Steve Johnson, the senior vice president of economic development, says. The last five-year cycle was focused inward. During that period the region was examined as a “product” and what could be done to enhance that product. Unique business clusters were considered and initiatives advancing the life sciences, IT, advanced manufacturing, financial services and transportation/distribution were put in place. The plan is to develop
St. Louis as a brand with a distinct identity and unify the region, and then use that as the basis for a proactive marketing and business development campaign.“(All this was) geared to make St. Louis a better, more marketable product,” Johnson says. “Now it’s time to really turn up the heat back on the marketing and business recruiting and expansion.”
Johnson’s department is charged with retention and expansion of existing businesses, new growth from within the region, and recruiting new business. “It’s a three-legged stool,” Johnson says. “You do any one in isolation and you’re giving something up. They are not focused exclusively on bringing in new business, but it is the primary mission, Johnson says. Even though most jobs are generated from existing business, there are good reasons to continue to try to bring in new ones, he says.
“Recruiting new business is somewhat like disposable income for a family—it’s not what pays the bills, but it can make all the difference in your lifestyle. Recruiting new business infuses new blood, new ideas, new customers into a community.”
Johnson is confident about the region’s future. “St. Louis has been adding jobs faster than almost any major metropolitan area in the country. Part of that is we got hit pretty hard. We lost a lot. But we are recovering faster,” Johnson says. “I would not have staked my career and moved my family from someplace we loved, if I was not bullish about the St. Louis region.”
What is Economic Development?
A program, group of policies, or activity that seeks to improve the economic well being and quality of life for a community, by creating and/or retaining jobs that facilitate growth and
provide a stable tax base.
Source: International Economic Development Council
Ways to Improve Community’s Economic Well Being:
Job Creation
As much a quality issue as a quantity issue—new jobs should support an adequate standard of living, offer stability and decent working conditions and provide opportunity for advancement.
Job Retention & Business Expansion
Keeping existing businesses in established commercial districts—an existing job is just as important as a new one.
Tax Base Enhancement
Needed to support local services without tax increases.
Quality of Life
Including safety, education quality and opportunity, poverty reduction, environmental quality, recreation and culture—what makes living, working, and conducting business in a community worthwhile.
Source: Development Strategies |
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