Economic development improves the social and economic well-being of communities and regions. It includes activities undertaken to support new business and the expansion of existing industry. Economic development is also a competitive process, pitting communities in a race to promote themselves as the ideal locations for doing business. An economic development analysis helps a community take stock of its position as a magnet for attracting new investment and jobs.
An economic development analysis applies the principles of SWOT (strengths, weaknesses, opportunities, and threats) analysis to assess the position of a city or community for attracting new businesses and jobs. SWOT analysis surveys the internal and external environments in which an organization operates, identifying its strengths and weaknesses (internal factors), as well as opportunities and threats (external). An analysis prepared for downtown Dayton, Ohio, for example, followed the SWOT approach.
Economic development is a competitive process, as cities and towns compete among themselves to promote their areas as attractive sites for new business, as well as the growth and expansion of existing firms. Business relocations and expansions create additional jobs and investment, which translates to added revenues and growth for communities. Economic development analysis gauges a community’s position as a business-friendly environment and often marks the first step in a community’s efforts to attract new industries and jobs.
Although an economic development analysis can vary in structure, most analyses contain demographic, business, local government, infrastructure, and real estate information. Demographic information may include the distribution of residents by education level and home ownership status. Analyses may survey the level of residential and commercial construction activity in the area, include information about local government taxation levels and the quality of physical infrastructure, such as streets and sewer systems. While preparing the study, analysts may interview local leaders and real estate professionals. An analysis of Wilson, North Carolina, provides a useful example.
Communities can use the information in an economic development analysis to more effectively market themselves to industries considering relocation. Communities can highlight identified strengths. Further, the analysis can survey external conditions, such as the larger business environment and other factors that present opportunities or threats for economic development efforts.
In response to the findings of economic development studies, local governments and community leaders can take appropriate actions to address identified weaknesses and make their communities more competitive. For example, a city with strong infrastructure and an educated work force, but a cumbersome process for approving business permits, can highlight those strengths. Elected leaders, meanwhile, can streamline the permit process.