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Notes on: The Value of Economic Development

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How Do We Communicate Our Worth? Sponsored by: 

Wells Fargo Bank
Pacific Gas and Electric Company

Why We Need to Spotlight Economic Development

Economic development has traditionally been a "behind the scenes" activity, leaving the spotlight on the results. We haven't worried too much about people knowing what we do, or felt the need to publicize our activities more. Why should we? Isn't it obvious that we do good work? Aren't we helping people to get and keep jobs? Aren't we helping put money in the community budget so they can pay for things like welfare, parks and recreation, drug programs and after-school programs? What could be a more necessary activity than economic development?

Isn't it obvious? Doesn't everyone know how important we are?

Well, to find the answer consider that the state policy makers eliminated the California Technology, Trade and Commerce Agency. Another clue comes from a list provided by a California county. Faced with a large budget shortfall, the county has been faced with deciding what programs are a priority. A policy statement issued by the county executive put "essential countywide public safety, health and welfare services" mandated by state law as the top priority, then programs that generate income to pay debts and expenses as second. Third priority went to municipal services, including sheriff's patrols and investigations.

The difficult choices facing the county board supervisors are stated in the seven spending priorities, ranked in descending order below municipal services: 

. "Safety net" programs for the homeless, mentally ill and other groups in need.

. General government functions, such as the Board of Supervisors and the bureaucracy.

. "Quality of Life" programs, such as neighborhood assistance, parks and economic development.

. Prevention and intervention programs, including alcohol and drug treatment services.

The ranking does not reflect the amount of money recommended, therefore the lowest rank does not mean no funding. Rather the policy is intended to guide in recommending specific budget items in next year's spending plan. But where is the revenue plan?

This changes the question to: "What's wrong with this picture?" Economic development is definitely a factor in quality of life, but when did that become its defining factor? Health care is also a factor in quality of life, but no one would put it in the same category as parks and recreation. Aren't all the priorities a quality of life issue? Everyone of those priorities requires funds, but economic development generates funds and benefits, including producing more sales tax and reducing welfare costs. Economic development is a tool for gaining the resources to fund all these other categories, so how does it end up at the end of the priority list?

Well, unfortunately, that would be our fault. If people do not truly understand how we affect their lives on a daily basis, how can we expect them to make the economic development field a priority? We have had the luxury of staying behind the scenes and not worrying about public relations - until now. With budgets being strained, we have to face the fact that more than ever we are competing against other programs for resources, and that means we need to be more aggressive about the value of economic development. It's not enough to state that E.D. is an investment.

We need to measure the effect of our efforts in a way that any business person can understand. And we need to build our reputation in the public as an essential ingredient in creating a strong "quality of life" so that when we come up on the priority list we are seen as a necessary tool and not an end product.

We need to start crowing about our achievements, or we mayend up as Christmas dinner!


California Academy for Economic Development
550 Bercut Drive, Suite G; Sacramento, CA 95814
916-448-8252; (fax) 916-448-3811