The Shifting Landscape of Economic Development

The Shifting Landscape of Economic Development

Economic development, particularly outside urban areas, has historically focused on attracting jobs and investment through industrial and manufacturing assets. Many of these projects come from existing industry expansions or modernizations. While economic development organizations still invest time and resources in attracting new businesses, the cost to capture new businesses is normally much higher than retaining and expanding existing industries. In other words, keeping the customers we already have is not just good manners, it is good math.

For a long time, economic development organizations and community leadership have held that primary job creation is the most important economic development activity. While this remains important (economists even count indirect jobs and halo effects as additional economic benefits) nontraditional economic development projects are too often minimized as priorities or dismissed and left to the private sector to solve entirely on their own. These projects frequently receive no assistance with rezoning, entitlements, utilities, or cost support. The prevailing attitude toward private developers has been simply “good luck.” Furthermore, NIMBYism has become so prevalent that any and all rezonings are now received with public opposition. Given the current political environment, project approvals have become increasingly rare and surprising when they do occur. Sometimes a rezoning hearing can feel like an assault on a project and less like identifying the best compromise for shared benefit.

A Holistic Approach: The Four Pillars

At its heart, economic development is a growth activity—the expansion of a local economy to enhance the livelihood and productivity of a region. Since society is no longer solely agrarian, economic development must be viewed holistically. A factory job can create a grocery store job, and vice versa. Communities need to think comprehensively about what makes a well-rounded and well-funded place. Put another way, if we build only one leg of the stool, nobody should be surprised when the stool falls over.

There are four pillars of economic development needed for balance in any community:

1. Housing
2. Education
3. Jobs
4. Convenient Amenities

Housing: The Most Critical Pillar

Housing is arguably the most critical pillar. Access to shelter is a primary need for survival; water and food rank higher, but housing is still firmly in the “must have” category. While understanding housing markets used to be complicated and involved price, demand, and regional growth; today the situation is clear: communities are so far behind in new home construction that studies just confirm the problem. The solution is straightforward: build the appropriate quantity at prices people can afford to buy or rent, and success will follow. This is not quite “if you build it, they will come,” but if communities do not build it, workers may not come at all. Additionally, since housing captures the workforce, this leads to growing business opportunities due to the human capital that businesses seek. Consider your workforce as other businesses’ customers.

Education: Aligning with Future Work Skills

The importance of education in this illustration could vary (second, third, or fourth) depending on local economy and demographics, but is nonetheless a critical factor. Education encompasses more than just primary and secondary public schools and includes all options across all ages. Critically, education must align with future work skills needed locally and beyond.

Good education is about vocation. This could mean training welders at a high school or technical college, offering MBA programs at a university, or anything in between. While high school graduation rates matter, the more important question is whether a high school graduate can go to work the week after receiving their diploma and integrate into the company hiring them. Connecting industry to education partners is the most important first step, since most education leaders know how to teach but may not know what they should be teaching and how to apply it.

Jobs: A Byproduct, Not the Starting Point

Some would advocate for jobs as the most important pillar, but job creation does not build a house. A job may pay rent or a mortgage, but jobs are often a byproduct of an existing workforce or the growth of an area where workforce can locate. Jobs need their proper place in the economic development equation, but they are no longer on the far left by themselves with an equal symbol on the right and all other pillars after it. If anything, jobs may actually be on the far right of the economic development equation after the equal symbol. That is not how the equation looked in the old textbook, but as Doc Brown might say to Marty, where we are going, we may need more than jobs alone.

Amenities: Creating Community, Not Just Addresses

A well-put-together community needs amenities. These are all the great things that make a community a place, not just a home address or a car commute to and from work. These are the “third places”: churches, downtowns, parks, restaurants, trails, grocery store options, athletic fields, and nonprofits. Basically, anything people want to do away from home and work. If housing is where people sleep and jobs are where people earn, amenities are where a community gets its character, and occasionally its breakfast.

The amenity scale corresponds to community size. Atlanta's Piedmont Park operates at a scale appropriate to an urban metro area, just as a pocket park would suit a small downtown area. Professional sports teams locate in the center of their regional fan base, not far away from their loyal patrons. Grocery stores need a certain mass of weekly shoppers to remain sustainable. This final pillar is growing in importance among local constituents, and political leadership is responding to these wants more frequently, which is shaping economic development organizations' attention.

Where the Puck is Going: Georgia's Current Climate

In Georgia, significant opposition exists for certain types of new housing and larger job-creating projects. This is understandable since most of our citizens are generally secure in their housing and employment. From 2020 through 2022, many Georgians experienced a world of economic mobility through ultra-low interest rates for home purchases and flexible work-from-home arrangements. They moved toward amenities or high-performing schools and now feel a duty to protect these aspects of their quality of life. For many, this translates to “don’t change a thing.” This is where we are today and it is wildly important that economic development organizations find a relatable way to connect with their local citizens. Education on the benefits of growth and how prior efforts supported the past shaping the quality of life that is currently enjoyed by the community are just two small suggestions. Another is to personalize this to an individual from the community who was only able to remain in the community due to the growth and new job creation.

The Critical Role of Public Engagement

Public engagement has never been more critical to future land use planning, comprehensive planning, and economic development. The approach must be two-fold:

First, understand the wants, needs, and concerns of citizens and how these relate to development and growth.

Second, educate citizens on areas for development based on infrastructure and what limits sprawl or condenses concentration and creates density in reasonable ways.

Public engagement will remain the most important element in supporting these four pillars and helping communities continue to grow in healthy ways, expanding their local economies and providing opportunities for amenities to arrive in ways the community desires. The goal is not to make everyone agree on every detail, but to create enough shared understanding that communities can move forward together.

A Shared Responsibility

When these amenities arrive, they cannot fall entirely on taxpayers through public funds, nor can they fall entirely on the private sector. Most of the time, the underwriting for either approach alone simply will not work. A balanced, collaborative approach between public and private sectors, through partnerships, is essential for sustainable economic development. In short, this is not a solo mission. It is more like the economic development version of putting together the Avengers—different strengths, one shared goal.