Two Birds (and Maybe a Buffalo) with One Stone: How Can You Advance Multiple Economic Development Strategies at Once?

About the Author

CED Program Interns & Students

Suzanne Julian is UNC-Chapel Hill graduate student pursuing a master’s degree in Public Administration. She is currently working with the STEP leadership team in Pamlico County as part of the Carolina Economic Revitalization Corps program.

If you want to build the business sector in your community, you have three basic choices: you can try to lure in outside businesses, you can create new businesses, or you can retain and expand existing businesses. This is the traditional triad of economic development. Communities often focus on just one or two of these strategies. The classic approach in the old days, pursued even at the expense of investing in other avenues of development, was to entice outside businesses to locate in your town, no matter what the cost. Economic development professionals call it the buffalo hunt—the high-investment, low-odds pursuit of a single big company. 

In a world full of large manufacturing plants and plentiful factory jobs, that pursuit made sense. Getting a major branch plant to locate in your town was a one-shot (though often expensive) way to bring in hundreds of decent jobs along with significant corporate investment. These days, of course, the world has changed. As the buffaloes die out (or move their operations to China), more communities, especially smaller and more rural areas, are changing their approach. Communities are turning their attention away from trying to court big companies and instead are focusing on fostering entrepreneurship and supporting existing local businesses.

These more inwardly focused strategies are very promising.  After all, 60-80% of new jobs come from small businesses. And promoting entrepreneurship and local businesses can be a much more feasible strategy for a smaller community with fewer resources with which to lure in outside mega-corporations. There’s more good news, too: many of the tactics communities use to support entrepreneurship are also good tactics for retaining and expanding small businesses.

For example, one of Pamlico County’s current economic development efforts started out as an entrepreneurship strategy, but in practice, their work is also leading them towards some excellent business-retention projects. The STEP team in Pamlico County spent the summer going through a methodical and thoughtful process of identifying the county’s “core business capabilities.” These are the sectors in which Pamlico County has some kind of advantage, or sectors in which the county is well-positioned to succeed. After narrowing the list down to the top three of these “CBCs,” the STEP team made a list of existing businesses or possibly interested entrepreneurs for each category. The list included existing small and large businesses, as well as individuals who are particularly active in each sector. The committee created a survey to give to these businesses and people about what kind of business opportunities they see in their respective sectors, and what kinds of support or development the county needs to succeed in these industries. Surveys will be supplemented by interviews with respondents to get more in-depth insights.

The goal of doing this outreach was originally to discover what kinds of opportunities exist in each of these sectors, and to gather more information about where the business-creation opportunities are, and what the existing support structures and obstacles are. The STEP team hopes to use this information to nurture entrepreneurship in specific sectors in the county.

In practice, though, this entrepreneurship strategy is creating a great foundation for supporting business retention as well. By reaching out to existing businesses, the STEP team is getting a better idea of what kinds of services and support these businesses need and want. An important aspect of business retention and expansion is simply communicating with your local businesses—what do they need? What are they doing? How might they expand? How can the local economic development entity help? In Pamlico County, the STEP committee is simultaneously finding the most effective sectors in which to focus their entrepreneurship support, and creating good relationships that will help them support existing businesses.

And it turns out this work can even contribute to business-attraction strategies down the line.  By doing this focused identification of the county’s core business capabilities, the STEP team is laying the groundwork for developing really strong and regionally-appropriate clusters later on. Targeted recruitment might be a very effective strategy in a few years in Pamlico County, thanks to the business creation, retention, and expansion work that’s going on now.

Most effective economic development plans incorporate several approaches at once. There’s no magic bullet; there’s no strategy that’s going to serve up all the jobs and growth you need in one easy project. Instead, economic development is a slow-and-steady process that involves multiple strategies at once. Ideally, these strategies will be complementary and well-coordinated with one another. Here’s a challenge to the economic development planners out there: is there a way you can work towards multiple goals at once? What are the complementary economic development strategies that make sense in your community?  What can you do to advance several of them at once?

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