Periodically we will present commentaries on topics of interest to community and economic developers across rural Minnesota. Below is a list of all commentaries with the most recent listed first.
Economic Activity vs. Economic Development
For almost three years now in addition to serving as the head of the Liberal Arts and Education department at the University of Minnesota, Crookston, I have also been directing Minnesota's Economic Development Administration University Center. The EDA Center, as it is known across the state is a federally-funded center that is designed to provide technical assistance to local, county, regional and tribal economic development agencies across Minnesota.
Due to the economic downturn of the past few years, economic development agencies have been under increased pressure to improve local economic conditions and seek new and creative ways to facilitate private capital investment and job creation. And as a result, the number of technical assistance requests from local agencies to our EDA Center has been on the rise. Sometimes those requests are to assist in the development of a new business incubator or to explore the feasibility of a new type of revolving loan fund. But quite often we are asked to evaluate a local EDA's current operation or to provide assistance with organizational transitions and consolidations.
During these organizational assessments it often becomes evident that for an organization designed to facilitate business development, many local EDAs do not have established and written policies and criteria regarding what types of businesses they will provide assistance to and under what circumstances. Unlike banks that typically have formal and well-established lending and risk requirements, many local EDAs simply accept requests for assistance and make decisions without the benefit of such established criteria. And as a result, many of the local committees, often comprised of well-meaning city council members, lose sight of the difference between increasing economic activity in their community and increasing the size of the local economy.
Three principles that should guide local economic development committees in this regard are:
While these three principles may seem rather simple and obvious, they are often the very factors that create contentiousness and controversy at the local level. And now that the economy is undergoing a slow and steady recovery, local EDAs will start receiving even more requests to assist businesses. Having a set of written policies and criteria are the most objective way to adhere to a set of principles that are fair, congruent with local values and are aimed at growing the local economic pie and not just creating new ways to slice up the existing pie.
Geller is professor & head of the Arts, Humanities & Social Sciences at the University of Minnesota, Crookston. He also serves as the director of the federally-funded EDA Center at UMC. He can be reached at email@example.com