Anything New in Economic Attraction?
Business attraction has been and continues to be an essential part of economic development for many communities. In the context of difficult political, economic and fiscal realities, have economic attraction strategies changed? I put this question to a group of economic development professionals on the networking site LinkedIn. Surprisingly, most noted that although recruitment strategies themselves haven’t changed much, the environment in which they play out certainly has…and is impacting everything from the use of the Internet to political leadership. Here’s some of what they said:
The Internet and wealth of easily accessible data has truly changed the way communities interact with prospective businesses. Often, these businesses do their homework and profile the city based on data and information available online long before meeting with the community. City leaders need to be constantly aware of what’s out there and also know how to use the Internet and social media to their advantage to market specific and realistic assets and opportunities in their community. Keys to success: provide as much information and accurate data as possible, present them in a timely and clear manner, and review them regularly.
The current economic climate has many communities clamoring for jobs, and in some cases, any jobs or businesses in “fad” sectors. Targeted recruitment strategies that instead leverage the community’s existing advantages provide clear parameters for the types of industries or businesses that will thrive in the community. Be wary: consultants can sometimes push communities in directions that are not compatible with existing strengths or industry advantages.
Fiscal pressures are prompting community residents to expect greater transparency and accountability from their elected officials in the use of public funds for business attraction. As a result, communities are increasingly using analytics and accountability measures to ensure a return on investment.
For many communities, fiscal challenges are also resulting in less funding for economic development, but with greater expectations from elected officials. This can break the continuum of leadership needed for those initiatives that would sustain the community in the long-term in favor of those that provide more visible and immediate results.
Other recruitment trends that we’ve noticed in our work with cities and interactions with economic development professionals are:
- Targeting smaller, high growth businesses and entrepreneurs;
- Exploring foreign investors as sources of capital, development partners and new business prospects;
- Using different types of incentives and a variety of funding sources in creative ways; and
- Marketing on a region-wide basis.
In the coming months NLC’s Center for Research and Innovation will be taking a closer look at these trends and the implications for local leadership. What’s new in economic attraction in your community?