Many times communities decide to become involved in economic development for the sole purpose of growing their commercial/industrial tax base.  They find some vacant land and put a sign on the property that the community has industrial land available and wait for the phone to ring.  Amazingly enough, the property becomes an industrial park masquerading as a corn field.

Communities that are successful in economic development have four primary pillars in the community that make the attraction and retention of businesses successful at a much greater rate.  These pillars allow for the community to be better positioned to react to opportunities and reduce the uncertainty for both the community and the business that is making the location or expansion decision.  The pillars of successful economic development are Workforce, Infrastructure, Finance, and Governance.  When a community has developed and completed plans for each of these areas, the new business has a reduced risk with developing a facility in the community and can instead focus on their business.

Workforce

While the community cannot directly affect the availability of workforce, it can develop a plan that encourages the retention and attraction of new residents which results in the expansion of the workforce.  GreaterMSP has recently launched a region-wide plan to encourage the attraction and retention of young professionals to the area.  More information on their regional efforts can be found at http://makeitmsp.org/.  The communities can foster the expansion of all types of housing opportunities and to review the existing stock to determine the types of housing opportunities that may be under represented.  The community should also develop a strong relationship with the local higher education institutions to understand the types of students they attract and the areas of study, which can help the community identify industries that could be targeted. 

Infrastructure

The community also needs to have in-place the ability to serve the businesses based on their needs for infrastructure.  Does the community have the available sewer and water capacity to serve a new user with its existing system?  If they do not have the capacity, what is the plan to expand the system to allow for the additional capacity to serve future customers?  Has the community done an inventory on its existing infrastructure to determine where there may be deficiencies? What are they able to do to reduce or eliminate those deficiencies?  Many times this process will require that the community work with other entities like utility companies (electric, gas and broadband, etc.) to determine the industries that may be a good fit for the community. 

Finance

The traditional thought process is that a community needs to provide financial incentives to be successful in the attraction and retention of companies for the community.  While this is still important for the community to work with the company on accessing assistance programs, it has fallen in importance in recent years as workforce issues have become a more pressing concern.  The community must balance the provision of local financial assistance with the ability of the community and the project to carry the level of assistance offered.  Any assistance, especially financial assistance, should not be used to try and make a bad project a good project but it should be used to make a good project viable.  The community should develop a list of the available assistance programs that are offered by all levels of government and private sources and keep that list updated as to the amounts and requirements for the programs.  Companies traditionally only hear that assistance is available and rarely hear the modifiers for that possible assistance.

Governance

The final pillar of good economic development is the ability of the community to be a place that the company wants to be associate with and proud to use the community’s name as their address.  Many of the things that a community can do to project this image are fairly simple and generally are very inexpensive.  These actions include: elected officials are civil at meetings, residents’ concerns are addressed, the community makes good financial decisions concerning tax rates, fees and other costs associated the community are reasonable and the staff is responsive to requests.

The site selector’s goal is to eliminate as many possible sites from the list of locations as quickly as possible.  The community’s goal is to keep their sites in the running for as long as possible, and in a perfect world, becoming the final remaining site for the project.  Site selectors, whether a third party hired by the company or employees of the company, look to reduce the risk associated with the development of a new facility.  A community that can demonstrate that it has a strong foundation and is continually working to improve that foundation, will stand a better chance of being successful in the attraction and retention of businesses in the community.