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IML Preparing An ED Strategy

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Simple steps to prepare a community economic development strategy

Simple steps to prepare a community economic development strategy

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  • 1. Preparing an Economic Development Strategy in Ten Easy Steps BY CHUCK ECKENSTAHLER AND CRAIG HULLINGER Many of these questions can be answered by data obtained IN TRODUCTION primarily from the U.S. Census Bureau. This information can provide a narrative and quantified description of who we are Every local governmental official is now challenged with the and who makes up the workforce. It can also identity their need to promote jobs and new investment in their community. education and job skills. According to business site locators, The question asked is “How does our community accomplish available workforce is one of the top criteria of any firm this task?” seeking to expand or locate a new business operation. This question is often answered by chamber of commerce QUEST I ON 2 - WHAT I S OUR ECON OMY? members, government employed professional economic developers, and/or an assembled group of academics. These It is usually simple to identify the major employers. This individuals usually work with a large group of interested typically includes school district and hospital. The city or individuals offering their opinions of what programs and county government and a few major businesses are also activities should be undertaken by businesses and government major employers. They account for a substantial number of to stimulate the local economy. jobs located in the community. However, there is a large segment (some estimate 80%) of jobs that is provided by The recommendations might include an improved effort to smaller business that often-times is overlooked in this simple retain existing businesses or an effort to attract new businesses. tabulation. Small businesses are the primary generator of Tasks could also include developing a business park or new jobs. improving education to provide more skilled employees. It may also include efforts to improve our neighborhoods and downtown business districts to attract young well- educated adults who wish to live and work in an attractive and exciting community. The responses differ, typically having as many variations as there are people discussing what should be done. To the lay person, preparing the community economic development strategy can be an overwhelming and complex task; being something Part of the City of Peoria’s Economic Development Plan, the Innovation Center on Main Street. “best left to the professionals.” Data from the U.S. Census, U.S. Department of Commerce and The truth is that strategic economic development planning is state employment agency can be useful in providing a narrative rather simple. It is not rocket science. This article seeks to and quantified description of the number and type of jobs in the demystify preparation of an economic development strategy, community. This data allows examination of the number of jobs simplifying the process into ten easy tasks. By answering and wage scale of the current jobs in the community. It can also simple, easily understood questions, a group of people can help identify the growth (or decline) of these jobs over time, prepare a strategic plan organizing an economic development which is important to know to determine what specific jobs the program for their community. community currently has and what types of jobs that the community would like to attract. QUESTION 1 - W H O ARE W E ? QUEST I ON 3 - WHAT A RE OUR PROBLEM S AN D A simple question! Yes, we know we are a community of, for OPPORTUN I TI ES? example, 5,000 people. That’s correct, but what do we know about ourselves? How many people do we have in the workforce This is a more difficult question answered by a detached and what are their ages? What jobs do they do and how much unemotional critical evaluation of “community and what type of education do they have? How many are competitiveness.” unemployed or underemployed? How many kids are in school, when will they graduate, how many will go on to college and P R E PA R ING A N E CO NO MIC DE VE LO P ME NT STR ATE GY CO NTIN U E S ON PAG E 8 how many will obtain other advanced technical training? MAY 2009 | ILLINOIS MUNICIPAL REVIEW | 7
  • 2. PREPAR I N G AN EC ON OMI C DE VE L O PM E NT STRATE GY C O NTINUE S QUEST I ON 5 - WHAT DO WE WA N T TO BE - O UR FUT URE VI SI ON ? One way to answer this question is to complete what researchers call a “SWOT” analysis. To complete a SWOT Of the ten questions, this question is the most difficult to analysis, the community lists its economic Strengths, answer - what do we want to be? Weaknesses, Opportunities and Threats. This question is most often answered by a carefully worded The completed list provides information identifying unique vision statement, prepared by the consensus of interests that opportunities for existing business expansion and opportunities places into words a mental image of what the desired future for recruiting new businesses. It also identifies weaknesses and should be. The phrase “Our Future Vision is that our future threats which may discourage business expansion and community will be the premier regional location for new business location, which may be remedied by specific business investment in 2015” is an example of a vision community action. statement. For example, the SWOT analysis might disclose that the This statement tells a big story. It proposes that the community workforce has a concentration of skilled computer-operated will be the premier location for new business investment when machine tool makers. This workforce can be offered to compared to surrounding areas. It also provides a means to prospective businesses needing such workers. It may also measure comparative success by measuring economic indicators disclose that the farmland designated for industrial such as 1) increased jobs, 2) an increase in number of development has no water and sewer and is not “shovel ready” businesses, and 3) an increase in business tax base within the for a business to immediately begin construction. community. It also gives a time period to measure success. QUESTION 4 - W H AT ARE OU R S T RE N G T H S? QUEST I ON 6 - HOW DO WE G ET THERE? Like a well-trained prize fighter, who patiently waits to use his With an understanding of our strengths, weaknesses and “best punch” to win the fight, an economic development strategy opportunities plus a vision of what the community wants to be must identify the community’s economic development “best in the future, answering this question may become clear. The punch.” Completing the SWOT analysis helps identify unique answers become a list of specific actions that must be economic strengths that can define the “economic development completed to either eliminate defined weaknesses, or maximize knock-out punch” for use in the fight to create new employment identified strengths to capitalize on identified opportunities. opportunities in the competitive global environment. Identifying the “knock-out punch” is sometimes easy. It might be a unique geographic location affording superior logistic transportation amenities. Or it might be proximity to a nationally rated university. Perhaps it might be a young highly educated available workforce. It could be an attractive recreational or small town residential lifestyle that the community offers to new residents. Regardless of the type of strengths identified, analysis of community strengths is necessary to select those specific opportunities that can be used to create new jobs within the community. The area just south of downtown Peoria is a mix of old industrial lofts, one story industrial buildings, and vacant lots. This area will become a vibrant mixed - use residential and commercial neighborhood. Some of the old industrial lofts will become condominiums similar to the successful development of the buildings on Water Street. The street level space can become viable commercial and retail space. 8| ILLINOIS MUNICIPAL REVIEW | MAY 2009
  • 3. The chart may also identify the need to involve other organizations or recommend formation of new entities to carry out specific work tasks. We might need a downtown development organization to sponsor a downtown redevelopment plan or a neighborhood redevelopment organization to sponsor redevelopment programs. QUEST I ON 8 - WHO I S RESPON SI BLE? Part of the City of Peoria’s Economic Development Plan, construction begins on the Methodist Medical Center. The key to successful implementation requires gaining commitments from specific individuals to complete work tasks. This “buy-in” of responsibility is critical to success. For example, the lack of “shovel ready” sites can be remedied by investment in utilities, roads and governmental approvals In our model economic development strategy, the mayor, public necessary to have the site ready for construction immediately works director, city planner, economic development director, upon receipt of a building permit. Another action may be a Tax president of the community college and chamber of commerce Increment Financing District or a Business Development District director would be named as “responsible parties” and charged or a Special Service Area to provide incentives for business with the duty to complete one or more specific work tasks. investment. Other actions may include completion of community appearance projects, securing worker skill training programs for QUEST I ON 9 - HOW M UCH DOES I T COST? laid-off workers, or conducting a national marketing program to recruit new businesses to locate in the community. Undertaking an economic development program costs money, typically more that any single organization has within its budget. QUESTION 7 - W H AT RE S OU RCE S D O W E HAVE Answering this question establishes a budget for each work task AND NEED? and identifies who is to provide the funding for the task. Every community has resources, typically scattered among a QUEST I ON 10 - HOW DO WE K N OW WHEN WE large number of separate organizations. The key to answering G ET THERE? this question is identifying these resources and involving them in developing the economic development strategic plan In every successful economic development program the progress with agreements to “take-on” and fund specific work tasks. towards completion of each work task is periodically reported. It A chart can be prepared listing the specific work task identifying gives the opportunity to celebrate success and to modify the tasks the person or organization that is responsible for the task, when if necessary to assure successful accomplishment. the work is to be completed and how EXAMPLE O F S TR ATEGI C PLAN WORK TASK CHART Measurement tools to gauge progress are it will be funded. critical. Useful milestones to measure E CO N O MIC D E V E LO PMENT STR ATEGIC PLA N Preparing this chart success should be included as part of the W O RK TA SKS early in the strategic Strategic Plan. Progress planning process Funding Responsible Completion Measurement also identifies work Work Task Description Budget Source Party Date Tool Some strategies break the process down into tasks that do not yet a number of separate categories, such as have a sponsor or logistics, health care, energy, agri-business, funding. retail, etc. Other approaches include a much quicker and simpler process, with the In our example, a development of a one-page strategy. This work task to install approach can sometimes be used as an infrastructure for a “shovel ready site” may be assigned to the interim until a full blown strategy can be developed. city public works department. Obtaining necessary planning and zoning approvals would be a task for the city planning ON LI N E EX A M PLES department. The city council could be assigned responsibility to begin city council sponsorship of a TIF district for a future The following Web pages show examples of recent economic business using tool making machinery equipment. The development strategies. Each effort is somewhat different, but community college could be asked to sponsor a workforce most of them follow most of the ten items. retaining effort with the chamber of commerce assigned the task of developing and implementing a marketing program. P R E PA R ING A N E CO NO MIC DE VE LO P ME NT STR ATE GY CO NTINU E S ON PAG E 1 0 MAY 2009 | ILLINOIS MUNICIPAL REVIEW | 9