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Chapter 3
Community Economics
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Understanding Communities and their Dynamics
• Basic Understanding of Community• Community Demographics• Community Economics• Community Power Structure• Community Situational Analysis• Community Sustainability• Community Development Process
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PresentersStephan Goetz - Director, The Northeast Regional Center for Rural Development and Professor of Agricultural and Regional Economics, Penn State University. Stephan has over 20 years of experience analyzing the economics of communities and has published widely in the area of county-level economic development. Before joining Penn State University, he served on the faculty at the University of Kentucky for nine years. His Ph.D.is from Michigan State University.
Walt Whitmer - Associate Director, The Northeast Regional Center for Rural Development and Extension Associate, Penn State Cooperative Extension. Walt has worked in the area of community and economic development for more than 25 years and holds an M.S. in Rural Sociology and Demography from Penn State. Prior to joining Penn State in 1992, Walt worked with both Peace Corps and USAID.
SLIDE #
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Goals of This Session• Basic Strategies for Fostering
Greater Economic Growth in the Community
• Promises and Pitfalls of Each Strategy
• Possible Roles for Extension Professionals in Each Strategy
Note: While we have revised this presentation in a number of ways, it draws substantially from work originally developed by Dr. Scott Loveridge, Michigan State University, and Transitional Director, the North Central Regional Center for Rural Development
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Why Community EconomicsAll communities are NOT created equal…
• Different resource endowments (financial, infrastructure, environmental, sectors, histories etc)
• Different growth trajectories• Different leadership structures &
capacity• Change is constant
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Role of Educator--Overall
• Help community understand its strengths and weaknesses.
• Help community learn to develop capacity to plan and implement.
• Teach about strategies.• Assist communities to access
data and other research.
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Major Players in Economic Development
• State Development Agencies• Small Business Development Center
Network• Chambers and other Business
Groups• Local Development Authorities &
Corporations• Local Governments and Planning
Agencies
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Six Strategies1. Strategic Planning for Economic
Development2. Attracting Manufacturing
(Targeting)3. Business Retention & Expansion4. Downtown Development5. Tourism & Recreational
Development6. Developing Entrepreneurs
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Strategic Planning For Economic Development
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Strategic Planning: Basics
• Convene community leaders• Engage broader set of
stakeholders• Process inputs• Develop action plans
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Steps Along the Way• Organize and identify
sponsorship• Scan the horizon• Identify key issues• Develop goals and strategies• Formulate action plans • Implement action plans• Monitor results
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Advantages and Disadvantages
Advantages: • Complement other strategies;
identify best fit• Low cost• Achieve consensus
Disadvantage: May “sit on shelf”
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Potential Roles for Extension• Convene• Educate and train• Broker resources • Facilitate/moderate• Gather and analyze data• Develop plan• Ensure accountability
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Attracting Manufacturing
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Attracting Manufacturing: Basics
• Only strategy that many communities pursue.
• Popular because it seems to offer “quick fix.”
• A multi-year process with real potential pitfalls.
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When to Use Attraction• When a major facility is idled.• When you are going to grow
anyway.• As a complement to other
strategies.• To fill an identified gap
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Attracting Manufacturing: Steps • Identify land• Make site improvements• Develop recruitment “packages”• Identify possible industries• Attend trade shows• Consulting reports vs. process• Community Business Matching
and Analytical Hierarchy Processes
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Potential Educator Roles• Teach possible pitfalls• Teach long-term nature• Help gauge strengths and
weaknesses• Serve as EDA “Point”• Teach grant writing• Foster board development
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Business Retention and Expansion
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BR&E BasicsTwo Types:• Lone Ranger:
– Visits business and fixes the problem.
– Not recommended for Extension professionals.
• Volunteer Visitor: – Survey of businesses– Committee review – Looks broader, community-wide
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BR&E Basics (cont’d)• Applications:
– Manufacturing (most frequent)– Retail – Agriculture – Businesses in general
• Volunteer visitor program: many roles
• Challenge is to prioritize and sustain
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BR&E Advantages• Efficient: jobs created or saved
per dollar invested. • Can help pull the community’s
leadership together• Well received by businesses
who feel that new firms are favored over the “old reliable” firms.
• Good opportunity to address business succession planning.
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BR&E Caveats• Leader must have very strong
social networks.• Cannot reverse economic
fundamentals. • Buy-in of local economic
developer needed.• Challenging to “mix” business
types. • Cannot fix all problems.• Important to get leadership
buy-in.
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Extension Educator Roles
• Task Force leader• Task Force member• Facilitator• Connector to outside
resources• Visitor
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Downtown Development
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Downtown Development: Basics
• Physical enhancements• Preservation of historic &
interesting buildings• Marketing through advertising
and events• Coordination among merchants• Develop “brand” for town
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Towns With Brands• Branson• Las Vegas• Orlando• Regional brands:
– Traverse City, MI(Cherries)– International Falls, MN (Coldest place)
What about your state?
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Advantages
• Source of community pride• Good for the environment. • Creates a sense of community
identity• Double benefit:
– Attract newcomers – Create a more pleasant place for
residents
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Cautions• Build it and they don’t
come• Creating a sense of
“sameness” instead of a sense of place.
• May gentrify place, with newcomers outnumbering the long term residents.
• Tastes and preferences change
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When to Use It
• Basic infrastructure is sound• Proximity to potential markets• Uniqueness of Place
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Potential Extension Roles• Charette• Identification of assets and planning• Historic preservation workshops• Grant-writing workshops• Downtown association• Main Street Program• Master Gardeners• First Impressions program
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Tourism & Recreation Development
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Tourism & Recreation Development: Basics• Tourism versus recreation• Tourism: coming from
somewhere else• Recreation: coming from the
area• Tourism and Recreation are
synergistic• Recreational facilities can be
used by tourists.
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Basics• Inventory current visitor
activities• Distinguish between business
vs. leisure visits. • Recognize that business visits
can lead to leisure visits• Inventory current tourist assets• Develop marketing plans
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Basics, continued
• Assist individual businesses with marketing plans
• Conduct hospitality training
• Consider a First Impressions program
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Tourism : Advantages
• Growing sector in United States• May increase due to state of the US
dollar• Can keep a town livable• Can bolster support for local amenities• Can help attract manufacturing firms • Can attract retirees or other “lifestyle”
immigrants• Increase opportunities around agri-
and eco-tourism
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Tourism: Caveats• Requires shift in “mind set”
– Myth: All tourism jobs are low wage– Myth: Tourism doesn’t bring in dollars– Myth: There’s nothing here to attract
visitors• Can lead to extreme seasonality• Can be very fragmented • May be difficult to get businesses to
cooperate• May need promotional and staff
development assistance for “Mom and Pop” businesses
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Tourism: When to Use It• Community has undiscovered
assets• Infrastructure is under-utilized• Tourism efforts are fragmented• Assets/partners in tourism
engaged:– MainStreet program– Convention and Visitors Bureau– State Travel and Tourism Agency– Tourism/recreation faculty
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Recreation: Basics• Focus on parks, trails, sports
facilities, libraries• Identify gaps• What is market able to pay?• What is public willing to support?• Most public recreation now
supported with combination of taxes and user fees.
• Recreation Development
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Recreation: Advantages
• Great benefits to the community
• May reduce out-migration
• May help industrial recruitment
• May help tourism development
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Recreation: Caveats• May be tough to “sell” to the
community• Large property owners may
oppose• User fees may be difficult to
enforce• Requires careful assessment of
costs and use
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Potential Extension Roles
• Facilitate public discussion
• Connect to university resources
• Help form new associations
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Entrepreneurial Communities
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Basics• Establish “community systems”• No one-size-fits-all recipe• Focus on owners of small-to-
medium sized businesses• Common approaches:
– Business advocate or coaching– Youth entrepreneurship– Peer-to-peer networking/problem
solving– Business incubators– Focus on entrepreneurs rather
than businesses
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Advantages• Requires no special
location advantages.• A business that succeeds
will probably stay in the community.
• Not hard to convince people that more entrepreneurship is a good idea.
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Disadvantages• May be viewed as duplicative of
existing services such as:– Business visitation programs– Small business development
center services• Funding is sparse.• Strategy has a long gestation
period before payoff.• Some aspects require “culture
change.
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When to Use
• When need to transition local economy from its traditional strengths
• Michigan example
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Potential Roles for Extension• Conduct community assessments• Develop incubator• Connect community to SBDC and
Land Grant Value-Added center• Help form and foster peer
networks• Serve in “coaching” role• Introduce youth entrepreneurship
program• Develop community recognition
systems
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Overall Potential Extension Roles
• Facilitate or bring in outside facilitator
• Conflict resolution• Connect to university data
and resources• Resource identification for
action teams
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Additional Reading& Data Sources in Handout
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Next Session
• Community Power StructureOctober 20 and 211:30 to 3 p.m. CST
• Dan Kahl
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Questions?
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Evaluation Link:
• http://www.surveymonkey.com/s.aspx?sm=lOPv7d1QOYqal83K8X6okA_3d_3d