The New Economic Development Approach

Most Economic Development agencies in the past have gone after large companies, offering tax incentives and special arrangements for moving manufacturing or headquarters to their city. The Economic Development teams know that having jobs and cars and people coming through really helps the economic situation of the city.

Over the last decade, we’ve seen a change. Economic Development has taken a new approach directed at startups and Entrepreneurs, but without much in terms of incentives. While this is may seem counter-intuitive and be a longer process in the beginning, it is actually more rewarding at the end.

Entrepreneurs moving into the area is a new way to solve old problems. Abandoned buildings are converted into art galleries, lofts, and even facilities for breakthrough technologies.

In the first five or ten years, it looks like nothing is happening, because there may only be three to five people in each organization. This is slow development, compared to the changes you see within months of a manufacturing company setting up shop with 300 people.

A better approach for the longevity of the city is an Economic Development approach that attracts entrepreneurs can be incentivized by incubation or acceleration programs or co-working spaces, and adding small funding or cash prizes.

BEFORE YOU GO:
We see our blogs as opportunities for dialogue. Please share your thoughts as comments.
1. What are the advantages of having a variety of entrepreneurs moving into the city versus one large company?
2. What are the disadvantages?
3. What are your thoughts?
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Faris Alami is Founder and CEO of International Strategic Management, Inc. (ISM). He works internationally, presenting Exploring Entrepreneurship Workshops and other entrepreneurial ecosystem — related ventures.