© 2012 IDEASolutions

Economic Development Strategy


IDEASolutions can help you develop the economic development strategy for your jurisdiction.  Its proprietary industry evaluation models can help identify industries with sustainable potential for your region, and help you target suitable investors and get ready for their inquiries. IDEASolutions can also train your staff the various tools that will improve your services to these investors and existing businesses.

Why do we need a strategy?  With a strategy, one can focus on what’s viable instead of chasing after every single bell and whistle.  Done strategically, economic development efforts can revitalize neighborhoods, create jobs, and generate tax revenue.  Done poorly, these efforts will just be a big waste of money.  When economic development programs consistently fail to show results, they get on the chopping block when budgets get tight.

Are you ready to create your own economic development strategy?  Please contact IDEASolutions via e-mail.  

- - - - -

Detailed Description

What is economic development?  For many local governments, economic development means attracting more retail operations into the city.  Retailers bring in sales tax revenue which the city can use to build more infrastructure and provide more services to its residents. Some local governments see job creation as the main objective because they know good jobs solve many social problems.  Some jurisdictions don’t want development. They, under the direction of the constituents, would rather see the status quo preserved.

Economics, in one sense, is the study of welfare. Economic development therefore can be interpreted as the efforts to increase welfare.  But whose welfare?  It most often refers to the welfare of people in one’s jurisdiction, but it could also refer to the welfare of the environment, or even the welfare of a nation.  It also has a temporal dimension. One can maximize the welfare of the current generation at the expense of the future generation.  Such short-term perspective is one reason why this nation is suffering a severe economic downturn.

I believe there are two key objectives for a local government: 1) To improve the welfare of its residents and 2) to protect the natural endowment under its control.  In some cases, the two are in conflict, and the local government must try to achieve a reasonable balance based on the desires of its constituents, the law of the land, and a strong sense of social responsibility.  The tool to help evaluate the best course of action is economic analysis, and it needs to take into account many factors, including the desires of the people.

Therefore, there is no single ideal economic development strategy that works for all areas.  It is heavily dependent on what’s there, what people want, and what’s practical and viable.

For jurisdictions interested in building up its business and industrial base, I have developed a model to evaluate the strengths and weaknesses of industries in a given area. The model allows one to see which industries could do well in that area, the bottlenecks to further growth, and the long-term potential based on foreseeable trends.  From there, one can develop a plan to support and grow the industry.

I also have a model on investment decision-making.  The model allows one to know what needs to be done to become more attractive to potential investors.  Armed with such insights, one can more easily attract new investments.

When these two models are combined, one gets a practical economic development strategy that combines supply (one’s industrial base and investment potential) and demand (investors), which creates economic activity (actual investments, which leads to economic output, jobs, and tax revenue).

IDEASolutions also emphasizes the importance of serving existing businesses.  Keeping existing businesses here and helping them grow is a critical part of local economic development.  

Finally, IDEASolutions’ method of developing the economic development strategy is very inclusive.  People’s desires will be heard.  This step is crucial because people’s welfare is dependent on their wishes being honored, not just making money or building things.

The Cycle of Economic Development was originally developed by the McKenzie Company.  It has been modified and expanded by George Huang.

Are you interested in having an economic development strategy? Please contact IDEASolutions via e-mail if you wish to get a practical & actionable strategy for your area.