Organizations that run economic development programs, or EDPs, are often on the forefront of efforts to initiate or revitalize a community’s financial infrastructure. EDPs can be nonprofit, private or government entities and may focus on developing specific sectors, such as tech or manufacturing. All economic development organizations, however, have a few defining features that keep them in the same category.
The most essential feature of an EDP organization is its objective to activate the local economy and attract, retain and expand profitable business activity. EDP organizations, however, don’t actually build revenue themselves. Instead, their role is to pave the road for businesses and other investors so revenue can start rolling in. The way an organization goes about this task varies depending on the community’s specific set of assets and complications, but the main intention is to work within the community to identify, develop and implement a strategy that sparks the local economy.
All EDPs work on a principle of cooperative effort. This feature is vital, and the success or failure of an economic development organization often hinges on the input, consensus and involvement of the community at large. EDP organizations rely heavily on community members and leaders, elected officials, government agencies, academic institutions and, of course, businesses to identify an area’s economic strengths and weaknesses and tailor a distinctive development strategy. Investment entities such as banks and venture capitalists also take part in an EDP organization’s undertakings, often providing seed funding.
Economic Research and Analysis
Even with ample community support and participation, an EDP organization can’t be effective if it’s missing a third key characteristic: the ability to perform comprehensive research and analysis of the factors that affect a community’s economy. Economic development organizations are tasked with discerning a community’s assets, as well as its liabilities, and determining exactly what the locale offers to businesses. This process of exploration and assessment covers a broad spectrum of intertwined elements, including infrastructure, social services, government functions, areas available for construction and expansion, market demand and opportunities, workforce data, cultural and social demographics and crime rates.
Once the organization understands the development capacity of a community, it formulates a blueprint for the region’s economic growth. This strategic action is the final defining feature of an EDP organization. The plan provides specifics on shaping the circumstances for economic expansion by maximizing resources while minimizing liabilities. Such details include how to encourage, support and expand existing businesses and use the area's assets to attract new companies and other investors. These strategies also describe ways to develop business-friendly laws and regulation and enhance the workforce via education and training.
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