What is economic development?

Economic development is a program, group of policies, or activities that seeks to improve the economic well-being and quality of life for a community.  Maury Forman and James Mooney "Learning to Lead" A Primer for Economic Development Stategies

Economic Development usually means three important areas of concentration:

• Business attraction
• Business retention and expansion
• Business creation

All of these are the responsibility of Flagler Department of Economic Opportunity in cooperation with government and local partners working together on strengthening the area economy.

All three forms of economic development aim to create new primary jobs that pay higher wages, increase the available income coming into the community from outside its market area, and create greater capital investment in the community. To create this, there needs to be a diversity of local industry sectors.

Why do we do economic development?

Economic development has three main purposes:

·         To increase the number of people with access to wealth through personal economic growth

·         To increase the tax base of our community to provide higher quality public services

·         To diversify the economic base creating a more sustainable economy

What are primary jobs?

"Primary" or, as they are sometimes called, "export income" jobs are jobs which produce goods and services in excess of what can be consumed in the local marketplace. This is what creates the exchange of new wealth. A manufacturing facility is a good example of primary jobs. The product they create is sold world-wide and does not rely on local demand. The money the company brings in from selling the product, is "new" dollars.

The retail sector, though often sought after by residents, is an example of "secondary jobs" This is because the shopping centers located within an area are typically spending money that has already been "created" by primary employers in that area. It is not "new money." However, the definition of "primary or export income" employment changes depending on the definition of the market.

What are the indirect impacts of new job creation?

As a result of creating new jobs, the demand for goods and services generated by the primary employer is increased and "indirect" or "spin-off" jobs are created. Think of these as the goods and services that the workers and suppliers need. They are the product of "wealth" created by primary employment. Generally, they are jobs like retailing, lawyers, doctors, government workers, non-profit employment, etc. These occupations provide services to primary jobs. They may also include jobs that meet the required "input" needs of primary jobs.

What is a multiplier?

Spin-off or indirect jobs are typically associated with the term "multiplier." The term "multiplier" comes from a series of economic calculations that estimates the number of jobs required to meet the needs of one primary job. The larger the multiplier, the greater the economic impact of the primary job. Two things determine the size of the multiplier: average wage paid to the primary employee and the amount and cost of "inputs" required for the primary employee to accomplish his or her work.

Retail is seldom a good primary employer, in terms of wealth creation, because of the old adage, "retail follows rooftops." In other words, retail must follow customers and those customers are created through primary employment’s wealth generating ability.

A mature regional economy that offers a wide array of goods and services for purchase by the primary job will also have a larger multiplier than a smaller market. In other words, a diverse economy "holds on" to the primary worker’s income longer. In an immature market the dollar exits more quickly, thereby reducing the multiplier lacking many of the goods and services demanded by the primary job.

How do we attract new businesses?

Attraction activities, performed in Flagler Department of Economic Opportunity, usually start with an evaluation of targeted industries or "clusters". It looks at companies that are a "good fit" for the community and that can diversify the local economic base. These may be medical facilities, aviation industry, manufacturing or other industries that are well-suited to our community.

Business attraction programs are usually a combination of:

·         Website development

·         Print advertising

·         Quick response to Request for Proposal

·         Economic briefings and press releases

·         Site selection conference attendance

·         Trade show attendance

·         Public and media relations

This marketing program aims to generate interest from companies in relocating to the community. The economic development organization then needs to be well positioned to provide information and assistance to those companies. Our public/private partnership allows Flagler Department of Economic Opportunity to present as many program and incentive options as possible.

Why do companies choose one location over another?

There are a multitude of reasons from reducing operating costs, gaining better access to skilled labor, reduction in transportation delays, or the owner may want to enjoy a better quality of life. It is the role of an economic developer to understand a company’s needs and to portray the area in a positive light. This is most effectively done by providing detailed and accurate data about the community including comparisons to competing areas. When the data is similar between areas, incentives may help “even the playing field”

According to the Area Development magazine’s Corporate Survey of corporate decision makers, the top 10 site selection criteria are:

1.       Availability of skilled labor

2.       Labor costs

3.       Highway accessibility

4.       Energy availability and costs

5.       Availability of telecommunications services

6.       Tax exemptions

7.       Occupancy or construction costs

8.       State and local incentives

9.       Proximity to major markets

10.   Availability of land

Corporations are looking for healthy, vibrant communities that can grow with the company.

 

What are existing industry Retention and Expansion programs?

Over 80% of all jobs created in a local economy come from existing industry. Any good economic development program has a retention program. Flagler Department of Economic Opportunity and the Flagler County Chamber of Commerce work together to address the needs of existing companies. For a retention program to be successful it must include:

An emphasis on public infrastructure improvements. Communities that invest in capital improvements, have strong training institutions, moderate tax and regulatory environments and affordable housing are always desirable locations. This requires strong vision from elected officials, government employees and the private sector working jointly. The same things that attract new employers will keep existing firms.

Economic development organizations must providing such things as regulatory and training assistance, new business leads, competitor analysis, marketing support, and so on. A full understanding of the primary employers along with their goals and objectives dictate the types of services provided.