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The New Economic Development

The field of economic development as a profession is focused on economic growth. Economic growth is understood by analyzing the market. The market is based upon supply and demand. Supply and demand is concerned with optimum efficiency. But efficient economic development is not always equitable economic development. And, equitable economic development is essentially community development in an economic development context.

A conceptual framework for equity-driven economic growth illustrates the differences between the efficiency orientation of traditional economic development and the equity orientation of community development. Our orientation toward the profession is manifest in the manner in which we structure our EDOs. A top-down, efficiency-, market- and resource driven structure inevitably drives our outcomes toward efficient economic development. A bottom-up, remedial-market, community-driven structure inevitably drives our outcomes toward equitable development.

The convergence of efficient economic development and equitable economic development is “The New Economic Development” that drives EDOs to the cutting edge of the industry. It is at once a holistic approach to economic growth that creates capital and community wealth instead of aggravating existing inequities by simply moving capital around the urban landscape in a zero-sum sort of way.

Below is my conceptual framework for equity-driven economic growth, which I presented last year at International Economic Development Council’s Annual Conference.

Conceptual Framework for Equity-Driven Economic Growth

Dimension Economic Development Community Development
Policies and programs explicitly directed at improving the business climate through specific efforts, business finance, marketing, neighborhood development, business retention and expansion, technology transfer, real estate development and others. A process of creating and utilizing physical, human, financial and social assets that decreases inequality in development by raising the standard of living and improving the quality of life.
Orientation of Profession Efficiency

Economic – Profit Maximizing

Equity

Political – Fair, Just, Equitable

Direction of Authority

Direction of Communication

Top-Down Bottom-Up
Leadership Style Lead Serve
Organizational/Service Orientation Market-Driven / Competition Remedy Market Distortions / Collaboration
Decision-Making Drivers Resource-Driven

Quantitative

Community-Driven

Qualitative

An EDO’s Tools and Strategies EFFICIENCY-ORIENTED TOOLS & STRATEGIESSupply-Side Incentives (Reduce Production Costs)

  • Tax Incentive Systems
  • Debt-Financing Schemes
  • Infrastructure Investment
  • Labor Incentives
  • Regulatory Policy
  • Tax Increment Financing
  • Enterprise Zones
  • Land and Site Development

Demand-Side Incentives (Promote Growth throughout the Local Market)

  • TDRs
  • Business Incubation
  • Venture Capital
  • R&D
  • Targeted Incentives
  • Small Business Support
  • Job Creation Strategies
  • Technical Assistance
EQUITY-ORIENTED TOOLS & STRATEGIES

  • Supply-Side and Demand-Side Incentives
  • Community Development
  • Neighborhood Task Forces
  • Boards & Commissions
  • Cross-Functional Work Teams
  • Data, Data, Data!
  • Best Practices and Case Studies
  • Strategic Plans / ED Plans
  • P3s
  • Grants, Grants, Grants!
  • RFPs, RFQs
  • % MBE/WBE Loan Portfolios
  • Coalition Building
  • Capacity Building
  • Community Engagement
  • Community Mobilization
  • Train-the-Trainer

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