A Systematic Approach to Economic Development Planning
The following is a brief account of how a municipality might approach economic development planning.11
1. Needs assessment. In this phase the municipality decides the purpose of the program. The two most common goals are providing additional employment opportunities and strengthening the municipal tax base. If the main goal is jobs, the municipality should consider whether the goal is simply to increase the total number of jobs or whether it is seeking particular types of jobs, perhaps to address high rates of unemployment or underemployment among particular sectors of its labor force. Being clear about the goals of the program is particularly useful if choices have to be made about the expenditure of public funds on competing projects.
2. Market evaluation. In order to develop an effective marketing program, the municipality's economic development agency tries to make an objective assessment of the municipality's competitive strengths and weaknesses. This means examining wages and the availability of labor, taxes, land and construction costs, utility rates, the composition of its existing commercial and industrial establishment, strengths and weaknesses in its transportation infrastructure, its educational and cultural establishment, and a variety of quality-of-life items. Such an assessment will help the municipality target its sales and marketing efforts toward those types of firms that are most likely to be interested in relocating to or expanding in that municipality.
3. Assessment of the consequences of an economic development program. Economic development will involve fiscal effects, both new revenues and also new expenditures. It may also affect traffic flow, environmental quality, housing markets, and many other aspects of community life. Anticipating and planning for those effects is part of a systematic approach to economic development.
4. Plan formulation. The plan might include some or all of the following elements:
• An advertising and marketing program.
• A plan for the use of subsidies such as property and other tax abatements, low-interest loans or loan guarantees, or public absorption of some of the costs of site acquisition and development.
• A program of capital investments in water, sewer, road, and other facilities necessary to support industrial and commercial development. If the municipality decides to adopt an entrepreneurial role, it might include planning for the development of a municipal industrial or commercial park, or the construction of a shell building.
• A land-use element. This might involve adjusting the municipality's land-use controls to provide adequate industrial and commercial sites and possibly also the purchase or optioning of land for future economic development.