Thursday, January 13, 2011
Community Development and Economic Development
My entire career has been spent in economic and community development. Economic development has always been the priority. What is the difference? In the broadest definition, economic development is the creation of net new wealth. This is most commonly accomplished through the creation of new jobs and capital investment by attracting and retaining basic industry. This effort essentially brings new money into the local economy.
Community development is defined as improving the area for the residents. Community development involves all aspects of improving community including organizational or resource capacity, business development, education and workforce development, development of markets, investment in infrastructure, efficient and attractive commercial and downtown areas, gateways, business parks, speculative buildings and the coordination of public/private partnerships. It is broader in context when compared to economic development.
From a different perspective, one can consider economic development as the sales component, and community development is the product development/improvement component.
It begs the question, which comes first, economic development or community development? It is the old chicken or the egg question. My answer, it is irrelevant and dwelling on it is unproductive. A vibrant and growing community needs both. Net new wealth is required to provide resources to community development efforts. Economic development needs community development to work to improve the local product and to sharpen the community's differentiating advantages.
Economic development brings in new people, new ideas and new leadership. Community development needs an influx of new people and innovative ideas to continue building the capacity and ensure that the area remains progressive.
Community development needs to be on the cutting edge of ideas and trends. It means involving as many of the community leaders as possible, listening to their ideas and concerns, and then formulating a plan of action. Lately, community development efforts at the local level center on workforce development, poverty, and education. Dialog, consensus, and action are the keys to success.
Often community and economic development are transposed or mean the same thing to people. This is like confusing sales and marketing. Sales and marketing are not the same. Sales is closing the deal for either a product or service. Marketing is creating an environment that makes the sales component easier. Marketing encompasses far more activities than sales.
Community development is very much like marketing. In the best sense, community development requires public and private leaders to take stock of the community, prioritize activities and goals, determine the resources necessary and implement a plan. Once the plan is in place, it requires ongoing measurement on how well it is accomplishing predetermined thresholds and milestones.
A major difference between economic development and community development is community development usually has short and long term objectives. Economic development does not. Consider it like a corporation where the research and development department resembles community development and the sales department resembles economic development. A research and development department has short and long term objectives with focus on both. The sales department has mainly short term goals, usually measured daily, monthly or quarterly.
Another difference is the work environment. A traditional economic development program has a board, but usually rotates people and expertise as needed for specific projects and/or prospects. A community development program requires a sustained and consistent commitment by various stakeholders including public and private local leadership.
In summary, a good economic development program is part of a comprehensive community development initiative. Both economic development and community development activities are interdependent, working hand in hand to support a community's overall economic well being.