Economic Development 101: Introduction
Introduction to Economic Development 101
By Bruce Johnstone
What is economic development? Why do we need economic development agencies to foster growth in our population and economy? Why do we need to grow our economy and population in the first place?
These are questions that citizens and taxpayers may ask themselves from time to time.
Some may question the need for economic development agencies to promote economic and population growth. After all, isn’t that the job of city hall, provincial and federal governments and the private sector?
Others may ask why taxpayers should subsidize the creation of jobs, provide tax incentives to attract new businesses, dole out grants to out-of-province companies, or foot the bill for expensive junkets to faraway places in the name of economic development.
Other people may even argue that a growing economy and population are not always desirable in that they contribute to overcrowding of roads and public spaces, urban sprawl and environmental contamination.
This series of articles hopes to answer some, if not all, of these questions.
John Lee, President and CEO of Economic Development Regina, and other senior members of the EDR team, recently talked about the role that they see for EDR in promoting and facilitating growth in Regina’s population and economy.
Lee and his EDR staff are also eager to debunk some of the myths about economic development (for starters, it’s not about travelling to exotic climates and schmoozing with politicians and business leaders at champagne receptions).
The series will look at how and why economic development agencies, like EDR, have evolved, from the one-person economic development office located at city hall to the arm’s-length, multi-purpose, public-private partnership of today.
Finally, the series will focus on some examples of programs and projects, big and small, that have helped promote economic growth in the community.
The hope is that the reader will come away with a better understanding of what economic development is and why a focused, well-designed and executed economic growth strategy has a greater chance of success than a scatter-gun, “build-it-and-they-will-come’’ approach.
For John Lee, the goal of economic development is pretty simple – a better quality of life for everyone in the community.
“Why do we want economic growth? It generates revenues (for) good social programs, good quality of life, good cultural programs. You don’t do economic development — attract companies or grow companies – just for the sake of it.’’
“If companies do well, that means people get paid. And that means people pay taxes and those taxes can be used to support infrastructure, health care, etc.’’
“If you grow your (economic) base, you generate more revenue and therefore can continue to grow your community and make it an even better place to live.’’
While economic growth is, generally speaking, a good thing, not all economic growth is good growth or “smart growth,” Lee added. Some new jobs may not be sustainable over the long term; they may be low-paying, low-skill jobs in industries that tend to move from one city to another fairly frequently.
Michael Zaplitny, manager of investment attraction for EDR, said short-term, low-paying, low-skill jobs don’t add value to the economic base of the community.
“There are all kinds of fly-by-night economic activities that come and go, but they don’t really contribute anything to the base for economic growth in the community,’’ Zaplitny said. “These are companies that don’t really have an interest in the community. They’re just using it as a geographical base.’’
“There are predatory companies and sectors that just want to come and go. They want to use whatever resource – whether it’s human resource or natural resource or land resource – and then leave. The core (job) is to try to do economic growth in such a way that it has a long-term impact on the community.’’
Lee said sustainable, long-term economic growth is the key goal of economic development agencies, like EDR, so that the community can attain a population where the economy becomes more self-sustaining and the community more self-sufficient.
“Economists will tell you that you really need to get 500,000 people… that 500,000 is more sustainable. Right now, that’s a long way away for Regina.’’
In the medium-term, Regina is aiming to get 300,000 population by 2035 or 2040, which is very achievable.
Of course, you can’t get anywhere without a map or a plan. That’s why EDR has developed, in alignment with the City of Regina’s Official Community Plan (OCP), a strategic vision for the Greater Regina Area’s economy in 2020 and beyond.
In a nutshell, EDR’s vision is that: “The Greater Regina Area prospers as a vibrant and diversified economy for investors, a strong destination experience for visitors and place of choice with a high quality of life for residents.’’
But EDR can’t achieve this vision by itself. It needs partners – city council and administration, the tourism and events, conventions and tradeshow (ECT) sectors, industry stakeholders, such as cultural, manufacturing and agri-value sectors and community partners, like chambers of commerce, trade and industry associations.
In effect, economic development is everyone’s business.
“We’re all in the economic development business,’’ Lee said. “We’re the broker, the facilitator. Brokering, facilitating and bringing people together is really what an agency like ours does. That’s how you truly get economic development.’’
As Mayor Michael Fougere noted: “Governments don’t create economic development; the private sector does. They create the jobs; they create the environment for investment.”
EDR and its partners are tasked with making the environment for investment and job creation as conducive to growth and expansion as possible.
In the next article, Lee and EDR senior staff will talk about how this vision can be achieved by building on the existing strengths of the local economy, such as the manufacturing and agri-value sector, community assets, like EVRAZ Place, Regina International Airport and University of Regina, and tourism and ECT sectors that currently attract 2.5 million visitors to the GRA annually.
Lee and company will also discuss how initiatives, like the Regina Advantage and Investment Partnership Programs, are helping to achieve EDR’s strategic vision.
Small businesses, which employ 55% of the total workforce in the GRA, are being supported through entrepreneurship training and business incubation and acceleration services, while new, innovative, high-tech industries are being identified and pursued.
Finally, Lee and his staff will talk about “smart growth’’ and how EDR is helping to facilitate large-scale regional economic development projects, like Protein Industries Canada, which recently named one of five “superclusters’’ under the federal government’s Innovation Superclusters Initiative.