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Encouraging Local Businesses to Grow in Place is KEY to Economic Development

Encouraging Local Businesses to Grow in Place is KEY to Economic Development

Read Full Column Here - by Lisa Riggs

Carrier Corp. and Ford Motor Co. recently made national headlines after deciding to retain jobs and channel investment into existing U.S. facilities instead of building new plants outside the country. These two high-profile announcements include so many story-lines: the importance of the manufacturing sector, offshoring pressures, the use of financial incentives, union labor, politics and the overall U.S. business environment. Yet perhaps the most important takeaway for communities is that these two deals reinforce the reality that notable economic activity — capital investment and jobs — comes from existing businesses staying and expanding. 

Additionally, the impact of losing existing employers and the associated potential growth hurts. Since the 1970s, however, most communities across the U.S. have understood economic development to mean business recruitment involving direct marketing to attract a company or operation to a town or region. And if a successful project is landed, these types of deals typically get big headlines.

Over these past few decades, far more focus as well as community and public dollars have been spent chasing the next big deal, while day in and day out, local businesses are making major decisions to grow their workforce or reinvest in their facilities or equipment with little fanfare. The impact on a community’s psyche is also interesting to observe.

A new business choosing to locate in a community garners energy and enthusiasm, providing community leaders with a sense of validation that their city, county or region was selected. Arguably, communities should feel that same sense of accomplishment when a local service firm or manufacturing plant expands its presence. The reason is that these are the businesses that are already involved in local activities, have roots in the community and support local charitable endeavors. Their decision to hire a new employee — whether it’s one or 100 — deepens their commitment to the community.

In economic development language, this is called business retention and expansion. And increasingly, communities are recognizing that the priority has to be on working to retain and grow our existing businesses. This approach is common sense and no different than most private-sector businesses that intrinsically understand that retaining customers is easier than securing new ones.

A strong business retention and expansion strategy is hard work and involves a significant investment of time. It starts by connecting with CEOs and senior business leaders and communicating that their business is valued and appreciated in the marketplace. It requires asking questions and providing solutions to major issues such as workforce development, access to goods and services, transportation infrastructure, and municipal coordination and uncovering other factors that may be impacting their ability to be successful. It requires considerable relationship building at many levels, not through a singular, urgent transaction.

Announcements like the Ford and Carrier deal end up being oversimplified to fit a news headline. It is unknown how much dialogue and effort occurred between the local and the state leadership and the companies in advance of what came across as overnight decisions.

Even the strongest business retention efforts don’t guarantee all companies, jobs and investment are retained. But communities are increasingly focusing deliberate attention toward keeping and growing the existing base as a priority over recruiting new businesses.

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About Our Mission

The Clay Florida Economic Development Corporation provides concierge service for companies who want to re-invest in expansion in the county or relocate their companies to the region.

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