Top 5 Best Practices for Economic Developers

May 22, 2017

The primary goal of every economic developer is to attract and retain quality businesses for their region. It produces jobs for local citizens, increases tax revenues for the local and state government, leads to improvements of infrastructure and government services; and creates new avenues of support for the various social, cultural, health and environmental organizations that exist within the community. In short, the mission of an economic developer is to make his or her region a better place to live, work and play for all. It is important work, but unfortunately there are many in the business who are distracted by local politics, hamstrung by lack of resources, or don’t have adequate training to achieve their mission. 

Before becoming a site selection consultant with Global Location Strategies, I worked in a variety of economic development capacities, from the United Nations to a regional economic development organization and many interesting places in between. My experience in and passion for economic development runs deep, so I can empathize with the difficulties faced by economic developers. In my current role as a site selection consultant, I see a wide range of capabilities and approaches, and while I appreciate diverse approaches, there are a few best practices that can help ensure your region is prepared to land the big fish when it nibbles on your hook. By following these five tips, you will help companies and site selection consultants feel welcome and discourage them from looking beyond your community. 

1.    Align Key Stakeholders Around a Common Vision
When companies begin canvassing locations for their next manufacturing plant, part of what they seek is an inviting attitude. It begins with the state and/or local economic development team but if it isn’t carried through while meeting with representatives from state and local government, business groups, local utilities, workforce organizations, educational institutions and other key stakeholders, you will most likely be eliminated from consideration. Educating local stakeholders on the purpose and value of your organization is a critical and ongoing part of your job. Their buy-in of your mission and goals – and the role they play in attracting and retaining quality businesses to the region – is essential. In fact, the word “buy-in” is to be taken literally, since their funding of your organization is the fuel that makes the economic development engine run. 

Stakeholders must not only be educated in what the economic developer does, but they must also become advocates, even to some extent salespeople. Area power and gas companies, city and county governments, Chambers of Commerce and other business groups, academic institutions, the state transportation department, local airports, rail providers, and a host of others will be called upon for project visits and employer interviews, to approve incentive packages or zoning changes, and to keep you supplied with current information that site selection teams need, such as: 

  • Utility availability and rates;
  • Current and future infrastructure developments;
  • Workforce availability and training services;
  • Transportation logistics services;
  • Site/building features, limitations, and potential mitigation plans;
  • Ownership and land transfer information; and
  • Environmental and permitting information. 

Two weeks is a reasonable amount of time for an economic development team to pull this information together for the site selector, and most can easily oblige because they have a strong network in place. If you don’t currently have this information, don’t wait. Start cultivating relationships with those that can provide you with the necessary information and begin harvesting it now. It may take time to convince area partners of the importance of having this information, but do not abandon the effort if you receive push back. Look for champions in your community that can help you carry the torch. 

2.    Know and Develop Your Available Sites and Buildings
One of the first things a site selection team will ask of any community it researches is a list of available sites or buildings for the type of company they’re representing. On the surface, this might seem like a simple thing to pull together but what the information they seek is far deeper than simply a list of addresses. To ensure your community gets its foot in the door, your “list” will actually be a spreadsheet of parcels and existing facilities, each characterized by size, zoning restrictions, proximity to certain infrastructure and utilities, their advantages and shortcomings, and designing and quantifying mitigation plans to address issues. For example, if electric service is not available at the site, what needs to happen to secure it and what is its guesstimated budget and timeline? If funding allows, communities should conduct due diligence and develop available sites to an extent that it lessens start-up time for potential industrial users. This will make your community extremely competitive in the site selection process. 

Obviously, the only way an economic developer can ensure their spreadsheet is accurate is to have a strong network in place as described in Tip #1, and to implement a communication system with representatives of the local utility providers and other area agencies that provides the economic developer with up-to-date information as regularly as needed, i.e., monthly, bi-annually, annually, etc. 

3.    Assume the Role of Gatekeeper
For a multi-state site selection project, the ideal scenario during the RFI stage is for the state economic development team in each state to serve as the single point of contact for the site selector. As such, they should act as gatekeeper, connecting the community, gathering the necessary information, and serving as the voice of the region. Likewise, their primary “community” is made up of regional or county gatekeepers who maintain the pulse of their local municipalities. When functioning properly, the state will send the RFI to the first-level gatekeepers who then set to work gathering the necessary information before funneling it back up the communication chain from which it came. Everyone has their assignment, there is no duplication of effort, and most of the information is readily available so gathering it is not a burden. In this scenario, the gatekeeper is highly valued and appreciated by all parties, not only for making the process swift and simple, but for helping to potentially bring new business to the region. 

4.    Implement a Business Retention Program
A bird in the hand is worth two in the bush. Often, your existing businesses are the greatest source for new jobs and investment, and you don’t have to get on a plane to court them! They also can be your best allies when it comes to advocating for your community when new prospects shop the region. A strong business retention program is a great way to help the growth of your existing businesses and attract new ones. An effective program might include hosting roundtable discussions with employers and governmental representatives in the area to discuss best practices and to gain an understanding of the issues existing employers have; creating and hosting programs to help solve issues; hosting regular networking events to encourage community-wide engagement; and arranging one-on-one meetings with key employers and municipal leaders to ensure trust and clear communication of the region’s economic development goals and vision. These meetings can also help you understand each company’s plan for growth and things they need most to achieve it. 

Aside from creating a tightly knit business community, a business retention program provides the economic developer with valuable, ongoing opportunities to educate key community and business leaders of the site selection process and the various roles and expectations of participants. It is especially important for the local business community to know how essential it is for them to be ready, willing and able to provide employer interviews when requested by site selection teams. Employer interviews provide site selectors with the opportunity to have frank and transparent discussions with companies already doing business in the community. How they deal with certain local and/or state laws or restrictions, infrastructure concerns, labor issues, cost-of-business realities and more is gleaned from these visits, and it can make or break an economic developers chances of becoming a finalist. More than once I have heard economic developers bemoan the fact that companies in their regions won’t allow site visits due to strict company privacy policies. Professional site selectors are keenly aware of such policies and are ethically bound to keep all information private. I have been on many site visits at companies with stringent privacy rules where I was allowed access to certain areas of the company only. This is perfectly acceptable since the primary purpose of the visit is to engage in one-on-one conversation with company representatives. Digging into trade secret processes is never our desire nor intent. 

5.    Benchmark
Just as site visits are a great way for site selectors to narrow down viable locations, they are equally valuable to economic developers. One of the best ways economic developers can create and maintain a close-knit network within their own community is to visit other successful communities to learn how they do it. During these community visits, economic developers should ask plenty of questions regarding the vision and goals of the local economic development organization; how their economic development team is structured; how they manage the flow of information during the site selection process; if they have a business retention program in place, how it works, and who participates; what trends they are seeing in terms of new business growth; and more. They should also ask similar questions of the companies they visit in these host communities to compare answers between the local economic developers and business/government leaders. If your community is hosting a site selector FAM tour or if you plan frequent (e.g. annual, bi-annual) one-on-one visits with site selection consultants, be sure to ask participants how your community, product and service level compares to others, and what best practices worth replicating they are seeing from other communities. If you are willing to receive constructive criticism as well as praise where it is due, you could learn a lot. 

Benchmarking the best practices of other successful economic development organizations and communities can put yours on a better path to attracting and retaining high quality businesses to your region. 

The business of attracting business is hard work, but if it is conducted with passion and a sense of communal camaraderie, it can reap huge rewards for your region. Following these five best practices will ensure your region stays on the proverbial radar of site selectors and positions you to maximize economic development opportunities. 

Written by Catalina Valencia for GOVERNING Magazine

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