There is no simple recipe for economic prosperity. However, the following are some helpful concepts that identify important variables which need to be considered by community leaders. Three of the most usable concepts are:
Earn it! Capture it! Make it!
These three avenues of economic development can be pursued using the following five strategies:
1. Retaining and expanding existing firms
This is an “earning it” and a “making it” strategy. When a local firm is oriented just to markets outside the community, this strategy is an “earning it” one. But when a local firm is oriented towards a local market, this strategy is a “making it” one.
2.Improving local linkages between local buyer and sellers
This is a “making it” strategy. The idea is to increase the flow of dollars between local buyers and sellers which will lead to a higher income multiplier.
3.Creating new businesses
This can be either an “earning it” strategy or a “making it” strategy. If the new firm wants to sell to outside markets then the strategy is an “earning it” one. If the new firm wants to sell to local customers then the strategy is a “making it” one.
4.Capturing outside dollars that are unearned
This is obviously a “capturing it” strategy for bringing in unearned dollars.
5.Bringing in outside firms
This is an “earning it” strategy. Most often outside companies enticed to open a branch in the community will be oriented to markets that are beyond the local community. Does your community have a balanced portfolio of strategies?
For more information go to Understanding your local economy, Kansas State University http://www.ksre.ksu.edu/library/agec2/L775.pdf
Though this blog entry does a good job of identifying important economic concepts and strategies, readers should visit the underlying Kansas State University publication for more detail and explanations. All of the strategies mentioned in the entry should be included in the study recommendations and, eventually, part of a regional economic development plan. Though all five strategies have merit and should be addressed, two need emphasis. More specifically, “Improving local linkages between local buyers and sellers” and “Creating new businesses” are should receive considerable attention and effort. Both strategies are needed to change what are currently areas of weakness, will require conscious efforts to achieve, and would add much needed diversity to the economic portfolio of the region. An increase in the linkage between local buyers and sellers will only be achieved when regional businesses or industries produce things residents want, even if those items cost more than the online option. Strategies used to generate new businesses need to move beyond mere “facilitation” to include mechanisms for idea generation and emerging research.
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