It is a story as old as time. The process can be exhausting in the pursuit of “the one”, and the search can go long and far. While that old story typically refers to love, the same can be said for the relationship between places and economic development. Cities across the country have continually pursued big businesses meant to stimulate their economies and increase wealth. This courtship of large companies typically means offering incentives such as tax breaks and subsidies, which can present challenges in ensuring cities are getting fair deals. But what if “the one” was right before their eyes? What if communities could grow their economies from within?
Romantic references aside, economic gardening is an economic development strategy meant to help communities grow from within. The strategy is grounded in the premise of local entrepreneurs operating companies that will bring new wealth and economic growth to a region in the form of jobs, tax revenues, per capita income, and an increase in vitality for the local business sector. As opposed to focusing on attracting big business, the economic gardening approach is to nurture local businesses.
Economic gardening was first pioneered in Littleton, Colorado by Chris Gibbons, the city’s Director of Business/Industry Affairs. When the program began in 1989, the city of Littleton had just lost its largest employer, construction supplier Martin Marietta. Martin Marietta’s closing resulted in nearly 7,000 employees being laid off during a recession. Rather than attempt to bring in new companies, Gibbons’ approach was to grow the companies already located in Littleton. In 1987, Littleton had nearly a million square feet of vacant retail space, and a vacancy rate of about 30 percent in downtown. As a way of attempting to fill the void left by Martin Marietta and decrease vacancy in the downtown area, Gibbons and his staff formulated the economic gardening model.
While it sounds similar to most economic development techniques, the basis of the economic gardening strategy is centered around providing market research and high level technical assistance (such as competitor intelligence, industry trend work, search engine optimization, and social media marketing) to firms. When provided with the kind of timely and relevant information that market research can provide about competitors, customers, markets, and industry trends, companies that are identified as being growth-oriented can make strategic decisions. In Littleton, this meant focusing on firms that employed between 10-99 people and amassed at least $1 million in revenue per year, as large firms were not expanding and creating more jobs, and small firms were not scaled to create an impactful amount of jobs.
Since the implementation of the economic gardening program, Littleton has experienced a 71 percent increase in employment, diversification in the economy and a tripling of their sales tax revenues while providing no incentives or tax breaks to recruit or attract outside businesses to the area. Littleton’s success with the program has resulted in several other economic gardening programs spawning throughout the country, including statewide initiatives in Louisiana, Maryland, and Washington. An economic impact analysis of Florida’s economic gardening program, GrowFL, shows that companies who participated in the program created an average of 5.2 net new jobs per company, and there are other success stories of economic gardening programs throughout the country.
While the concept has its benefits, challenges of economic gardening can include a lack of trust in the resources that cities can provide, building awareness about programs, and the identification process for second stage companies. For communities interested in pursuing an economic gardening strategy, steps to implementation are generally centered around gaining the support of local officials, identifying community assets, developing collaborative efforts among stakeholders and ensuring that a quality communication system is in place to gain community support and buy-in.
These elements can be complicated, but understanding the unique needs of each community and what resources are available is a critical part of laying the groundwork for a successful economic gardening program. Just as no courtship is without its challenges, no economic development technique is one size fits all. Despite these hurdles, economic gardening is one strategy that seeks to empower local entrepreneurs and increase the vibrancy of local business sectors, eliminating some of the guesswork around providing incentives and focusing efforts on the firms that already call a place home.
Ashley Tucker is a dual-degree student in the Master of Public Administration and Master of City & Regional Planning programs at UNC-Chapel Hill and a Community RevitalizationFellow with the Development Finance Initiative.