Without a doubt, the most important source for economic development is existing industry in the community. Industry tends to stay and expand where they ar consistently well-treated and appreciated. Job growth historically has come from the growth and expansion of existing business. That is not likely to change. Local managers of non-locally owned businesses can play a key role in influencing decisions on plant expansions and/or closing.
Also, local industry management tends to be the single most influential source of information for new industry prospects. Businesses seeking a new location will usually contact local business managers to get a reading on what a community’s business climate is really like.
If the existing industries are satisfied with their community, they will tell other businesses. Existing business owners that are satisfied that their community really cares about them are the community’s best ambassadors to attract new industry.
Here are some suggestions on what communities can do to build local industry management support:
• Be at least as helpful with the needs of an existing firm as you would be to a new firm prospect.
• Schedule regular, formal visits to local industry to find out their needs and offer help.
• Encourage local industry management to be key players in the local economic development programs.
• Hold events to give recognition to area industry.
• Set up displays in town show- casing locally made products.
• Run newspaper ads in the headquarters city of the local plant, thanking the company for its investment in our local community.
• Encourage plant tours and open houses at local industrial plants.
• Solicit sincere written testimonials from local industry.
• Become more active in the State’s business retention program.
Too many people assume that economic development means attracting new business or industry to the community. Actually there is far more economic development potential in helping an existing business or industry survive, grow and prosper.
Retention and expansion of local firms is not quite as glamorous as attracting new businesses. However, there are a variety of factors that make it a worthwhile priority.
Helping an existing business to expand is generally less expensive than bringing in a new business. Fewer incentives are needed for the company already located in town, even though it provides the same new growth to the community.
The existing business obviously can succeed in the local environment, which in not a certainty for a new business. The local firm is generally aware of the opportunities and problems with an expansion and, therefore, is more likely to succeed.
Helping an existing company that is struggling is generally easier and less risky than finding a replacement if it fails. A recent study by the Federal Reserve Bank of Kansas City explored the most effective economic development strategies for communities and concluded that the first priority should be to support existing businesses.
According to the study, communities stand a better chance of boosting employment if they more aggressively shift the focus of their efforts from recruiting large manufacturing businesses to providing a more favorable economic environment for all business.
The primary focus of the Bellingham/Whatcom Economic Development Council’s business development strategy is to focus our attention and resources on the existing industries of Whatcom County. By concentrating on this, we believe the EDC, in partnership with the local communities, successfully creates a more positive business environment that will enable our local industries to prosper and create more better-paying jobs for our citizens.
Rob Pochert is the executive director of the Bellingham/Whatcom Economic Development Council.