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Why is economic development important?
A strong economy is the foundation for a health community.
In addition to public amenities, good jobs create self-reliant, independent citizens who have the ability to pay for their own housing, healthcare and food, thereby minimizing the pressure on public welfare services that require tax dollars to subsidize people’s basic needs.
Healthy communities always begin with local economy. One cannot achieve robust tax revenues without businesses and citizens to tax. The higher the wages earned, the more taxes collected, for this reason, economic development programs work to increase the number of high wage earners. Robust tax revenues give communities the ability to pay for public amenities including schools, safety services and infrastructure. Good jobs also create disposable income for a community. People with good paying jobs and disposable income have the ability to put money, time and their personal expertise into local charities and service organizations, effectively helping to take care of those among us who cannot take care of themselves.
The Chamber has created this diagram outlining their model for the sustainable building of business. Based on the principal of economic gardening, it shows the progression from outreach to entrepreneurs to the turnkey business employing local talent and giving back to the community. What is economic development?
Most simply put, economic development is a communitywide effort that works to keep existing businesses healthy, to keep local businesses from moving away, to help new businesses start and grow and to recruit new businesses to the area. Below is a metaphorical description of the two main schools of thought on economic development. Buffalo Hunting – Communities that prescribe to the buffalo hunting method of economic development send their best “hunters” out into the world looking for big game (big businesses). They use all the weapons they have (incentives, community profile, workforce, etc.) to bring their catch home. The benefit of buffalo hunting is that it brings a high number of good jobs into a community at one time. The detriment of buffalo hunting is that other hunters will continually try to capture your buffalo and the buffalo can get loose and leave any time it wants to. Additionally, domesticating a wild buffalo eventually strips the buffalo of its natural ability to fend for itself, requiring care and feeding from its captors in the long term (once you start providing incentives, you must continue to provide incentives). The question then becomes, how does this strategy support or reward other businesses in the community, taxpayers and citizens who do not receive these incentives.
Economic Gardening – Communities that prescribe to economic gardening work together to “tend a garden”. They work to create a fertile ground (infrastructure, facilities, etc.) in which to plant their seeds (business startups). They deploy a variety of tools to support their budding startups and make sure they get enough water, nutrients and sun (support) to have the best chance of growing healthy. The benefit of economic gardening is that jobs are created across industries and amongst many small businesses creating a diverse local economy. The detriment of economic gardening is that it is harder to see and therefore harder to demonstrate success as businesses grow a few jobs at a time. It also requires a lot of time and attention from the support mechanism (economic development agencies, government, etc.)
What is the Chamber Coalition’s role in economic development? The Chamber Coalition is Benton County’s single point of contact for economic development services. The Chamber Coalition has a division dedicated to economic development activities, including:
What is the Chamber Coalition’s strategy for economic development? The ED Division uses the Economic Development Pyramid as the foundation of economic activities, with the understanding that every person, business, agency, organization, special interest group, government entity and private citizen has a key role to play. The Chamber Coalition also subscribes to economic gardening with the understanding that based on our community values and existing community and economic strengths, economic development efforts will be more successful when focused on growing our own businesses.
Diversification Strategy Focus on Start-up and Entrepreneurship How do we build community wealth The Aha moment… What does it take for a business to move from an idea to a multimillion dollar exit?
The History: Local Chamber starts an ED Committee 1989 ED Committee becomes a standalone nonprofit, The Economic Development Partnership Actively involved in recruiting and industrial development, including:
2000 EDP conducts Implan study with input-output analysis. Outcome: Diversification Strategy needed. 2001 Diversification Strategy adopted. Economic Health Coalition is developed. Local business people working together to bolster local economy 2003 Creation of Economic Vitality Partnership (EVP) – 15 partners working together for economic development. 2004 Economic gardening strategy and economic development pyramid adopted. Emphasis placed on identification and cultivation of strategic partners. 2005 Birth of SWOT 2006 EVP completes unified strategic economic development plan called, Prosperity That Fits (PTF). THE PTF Plan has 4 focus areas, 14 strategies and 49 action items. PTF Steering Committee formed, to move plan forward. 2006 Gardening strategy evolved into the business ecosystem, focused on the following question, “What does it take to move from an idea to a multi-million dollar company?” Milestones developed into program areas. Programs focused on helping the entrepreneur climb the growth curve as effectively and efficiently as possible. All strategic partners invited to participate in entprenrenuer wrap-around services. 2007 Corvallis Airport Industrial Park certified the Governor’s Certified Site program (commonly known as “shovel ready”) 2007 Business License Fee explored as a funding source for PTF Plan actions. Failed. 2008 Business Boot Camp 2009 Sustainable Enterprise Zone in Benton County proposed. Passed. Chamber Coalition manages on behalf of City of Corvallis and Benton County. 2009 Willamette Angel Conference Start-Up Weekend 2010 Food Biz Boot Camp
Using the metaphor of a human body: A healthy and vibrant body is composed of various systems working seamlessly together for the good of the whole. The Chamber Coalition strategy for economic development includes a comprehensive system that starts with the needs of the growth-oriented entrepreneur. How does the Chamber Coalition help my traded sector business? In developing a customized economic development program for Corvallis and Benton County we began with a question, “What does it take for a business to go from an idea, to a multi-million dollar business?” By starting with this question and asking every successful entrepreneur we could find, the Chamber Coalition identified 5 key milestones that successful entrepreneurs had to reach in order to become a multi-million dollar business.
What constitutes a good job? The Chamber Coalition defines a good job as one that allows a family to pay for their own housing, health care and food without reliance on subsidy of some kind. As a rule, good jobs come from traded sector businesses. A traded sector business is one that sells their goods and services outside the immediate region, pays better than average wages and provides benefits, bringing new money into the local economy.
Why is bringing new money into the economy important?
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