Regional economic development can foster greater economic growth

Regional economic development can foster greater economic growth

A new report presents research that shows that a regional approach to economic development can foster economic greater growth. ‘Organizing for Success: Regional Economic Development’ informs economic developers of the rising interest in forming regional partnerships, the benefits and challenges to achieving them and the best practices exemplified by organizations cited as case studies.

Based on a collection of research sourced through interviews between the IEDC and representatives from regional economic development organizations across the USA, the report says that among the advantages to regional organization are a pooling of market resources, more collective advocacy and more comprehensive economic development services.

In recent years, regional partnerships for economic development have increased in frequency as communities across the country have sought to leverage leadership, influence, and funding to attract new investment and stimulate job growth. According to a 2015 IEDC annual survey on the state of economic development, 90 percent of respondents indicated that they “[had] entered into partnerships or combined resources with other community stakeholders to enhance economic development efforts” within the past year.

Because regions are made up of many communities, regional economic development organizations (EDOs) typically do not have public champions in the same way that individual towns and cities do. Thus, regional economic development organizations must prove their worth through continual, successful performance. However, in communities where regional cooperation is not settled policy, local jurisdictions are more apt to call their participation and investment in regional economic development efforts into question.

“Some politicians think we should keep the money locally, with the perception that the regional organization isn’t driving traffic here,” says Tom Rumora, director of economic development for Spotsylvania County, a partner in the Fredericksburg Regional Alliance in Virginia. “They might want to count the number of times businesses were brought to our county by the FRA, but what they eventually come to understand is there is efficiency in creating scale – and in any event, businesses might not look at local jurisdictions. They are actually looking at larger trading regions.”

The report concludes that regional EDOs are best suited to serve regions. Because regions are based on economic considerations rather than political or geographic ones, regional economic development organizations are more naturally positioned to serve businesses than individual cities, counties, or states. Adopting regional approaches to economic development often makes additional capacity, services, and assistance available to companies.

The report, ‘Organizing for Success: Regional Economic Development’, can be downloaded here.

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