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Blueprint for Excellence: Implementing Best Practices-Economic development gardening

Many communities have traditionally focused their economic development efforts on hunting for new businesses, but gardening—growing our existing companies and nurturing entrepreneurs —may be a better strategy for success. I recently attended a meeting in Littleton, Colorado, with people from around the world who are changing the way communities practice economic development.

by SDREI Investment Officer David Eiesland

“Hunting” typically revolves around the relocation of a headquarters or the expansion of a plant. Headquarters usually move to metro areas with a specialized labor force, better access to universities and support professionals like attorneys and accountants. Plant expansions usually move to lower cost environments, such as rural areas, where the cost of land, labor, taxes and utilities are cheaper.

Economic development gardeningBut plant expansions often exploit rural areas. These companies are happy to take financial incentives; to use the lower priced labor until wages rise or the incentives run out, then pull up stakes and head to third world countries where labor is 50 cents an hour. When a plant locates in a community because of its low costs, it is difficult for that community’s standard of living to rise.

These are the considerations that led Littleton, with a population of 40,000, to develop a new economic development model called “economic gardening: building a nurturing environment for entrepreneurs.” Their mandate is to help companies already in the community to create jobs. The strategy works; in 10 years, employment in Littleton has grown by 79% and sales tax revenues by 120%—with no increases in population.

Economic Gardening focuses on investing community development resources in three activities to help companies grow.

Infrastructure: All are essential to a growing business:

* Transportation, utilities, telecommunications and public safety.

* Quality of life. People must want to stay in our communities because they are attractive, pleasant places to live, work and play. Recreation, arts and entertainment must be available for all ages.

* Intellectual. Working with public and private institutions to make training and education available locally is essential. Technology makes this less of a challenge every day.

Information: The primary role for economic gardeners is making information available to businesses. Systems reports, database searching, focus groups, demographic analysis, market research and trend analysis are all types of data entrepreneurs seldom have the time, expertise or resources to gather.

Connections: Linking industry to higher education, research facilities and industry organizations enhances innovation. Bringing together the resources and making the necessary connections is essential to the growth of businesses and industries.

Translating these activities to a rural setting are not without challenges. We are exploring ways to partner with organizations around the state to develop processes to create and strengthen gardening strategies.

For more information on economic gardening, contact SDREI at 605-978-2804, e-mail [email protected] or check out our website at: http://www.sdrei.org.

http://www.sdrei.org/sp03inv.htm

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