The Texas Economic Development Council, or TEDC, is an Austin-based, statewide, non-profit professional association dedicated to the development of economic and employment opportunities in Texas (I took that straight from their website, which you can find here). It’s a very active … Continue reading
Economic development is a vital part of any economy. But when pressed, few people actually know what “economic development” actually means. This is largely due to the fact that the very definition of the term will change from community to community, and the people who define it are generally the leaders who set the priorities and the long-term goals for a community. In today’s post we’ll define economic development in broad classical and practical terms, explain what an economic developer does, and briefly discuss the difference between economic development organizations and economic development corporations in the state of Texas.
The definition of economic development comes down to leadership and priorities. In some communities, economic development begins and ends with job creation. In other communities has to do with filling vacant buildings or improving the land. In some it’s about developing a strong tourism program that will attract visitor dollars from outside of the community, and in others it’s about laying the foundation for a strong infrastructure that will support future growth. It just depends on the needs and values of the people who reside in, work in, and lead a community. The International Economic Development Council (IEDC) is a non-profit membership organization dedicated to helping economic developers do their job more effectively and raising the profile of the profession. According to IEDC, economic development encompasses three major areas:
- Policies that government undertakes to meet broad economic objectives including inflation control, high employment, and sustainable growth.
- Policies and programs to provide services including building highways, managing parks, and providing medical access to the disadvantaged.
- 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.
They go on to (sort of) define economic development in terms of the community:
The main goal of economic development is improving the economic well being of a community through efforts that entail job creation, job retention, tax base enhancements and quality of life. As there is no single definition for economic development, there is no single strategy, policy, or program for achieving successful economic development. Communities differ in their geographic and political strengths and weaknesses. Each community, therefore, will have a unique set of challenges for economic development.
(Read the whole article on the IEDC website here.)
So an economic developer has two jobs: first, he or she must determine the needs of the community when it comes to improving the local economic climate, and then enact the best combination of strategies, policies, and programs that will help meet those needs, taking into account all of the strengths and weaknesses within the community and the overall needs of the community. Complicated, yes. But these are challenges that good economic developers will relish and embrace as they move forward with the task at hand.
The Economic Developer: A Business’s Best Friend
Economic Developers are either employed by a municipality or an EDC (more on that later) or by an economic development organization that may serve a specific city or a larger region. For example, in the City of La Porte I was the head (actually the only member) of the Economic Development department for the City. But I worked closely with several regional organizations that existed to serve the larger Houston Bay Area–they included the Economic Alliance, Houston Port Region and the Bay Area Houston Economic Partnership. While I was there specifically to look out for the economic development needs (which often spilled over into the community development needs) of the City of La Porte, those regional organizations helped steer business towards the greater bay area region, which benefitted me and my colleagues in surrounding cities. All of us worked towards the common goal of improving the overall economy in the region and, by extension the quality of life for the people who lived, worked and played there.
Economic Developers have their fingers on the pulse of the community in many different areas. They are invaluable when seeking the right site for a particular project–they can work with their local real estate professionals and land owners to help find the right fit for your business that will take into account not only your geographic preferences but also your workforce, transportation, business climate, demographic, and infrastructure needs. They are knowledgeable about (and often serve as the gatekeepers for) possible financial incentives that may be available for a particular project, and they will know how and when to apply for myriad state, regional, and local programs established to entice businesses to an area. They will have a long list of resources to help with workforce development, transportation, basic utilities, importing and exporting, licensing, marketing, outreach, and key community contacts. In addition, economic developers work with local municipalities to understand and explain the local infrastructure, zoning issues, land use regulations, long-term planning goals, and building codes, and they can help navigate an often complex local political climate.
Business owners who are seeking to locate or relocate or expand a business in a particular community in Texas would be well served to seek out the economic developer for that community. Your economic developer will help you find a site that will allow your business to grow and thrive and help to hook you up with any available business incentives that will make your business more profitable. But perhaps more importantly, an economic developer will also help you understand the community, connect you to valuable resources and information, and introduce you to local and regional stakeholders that will help ensure your long-term success.
A Word About Economic Development Corporations, or EDC’s
Something that can be confusing to someone new to the Texas economic development scene is the difference between an ordinary economic development organization and an Economic Development Corporation (EDC). We’ll talk more about EDC’s and what they can do for businesses in a future post, but for now it’s important to understand that Texas law allows municipalities to pass up to a half-cent sales tax that can be used to further economic development in that community. The tax can be one of two types: Type A or Type B (some communities have both), and by law, if that tax is in effect, the funds must be managed by a non-profit corporation set up specifically for that purpose. There are very specific rules in place for the use of Type A or Type B sales tax funds. The economic developer for a particular community may be employed directly by the EDC, or he or she may be employed by the City and serve as a liaison for the EDC. Either way, he or she must be educated and informed about the latest legislative rules governing the expenditure of those funds, and be aware of the community’s goals and intentions in passing the tax in the first place.
So that’s a brief overview of the complex topic of Economic Development in Texas. If you’d like some additional information about Economic Development, be sure to visit our resources page.
In our next post we’ll list some resources for finding a great site for your business. Be sure to subscribe to the blog (on the right) so you won’t miss future posts. You can also follow us on Twitter.
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