Community Economic Development
A Professional Development Series for UW-Extension Faculty and Staff
Community economic development has been a focal point of Extension educational programming for over 35 years and remains critical to the Mission of Cooperative Extension and the University of Wisconsin. Extension educational programming in community economic development can take many forms from facilitating community discussions to providing technical economic analysis on a particular issue. The comfort level amongst UWEX faculty and staff in community economic development, however, is mixed. For some community economic development is a focal point of their programming and is very comfortable with a range of situations. Others are less comfortable and are unsure of what community economic is, and is not, and the roles that they can plan.
This website is aimed at providing all UWEX faculty and staff with professional development opportunities in community economic development. This website could be viewed as a starting point for those who are less comfortable with community economic development or a place for more advanced training in how local economies function. Alternatively, one could think of this website as a “one-stop center” for training and educational materials on community economic development.
There are three sets of materials for each topic area: (1) a powerpoint presentation (pdf); (2) accompanying factsheets (pdf); and (3) supplemental readings (pdf). Unfortunately, because so many of the supplemental readings are subject to copyright restrictions, they cannot be placed on a public website. To provide access all materials here plus the supplemental readings will be made available on a password protected Desire2Learn (D2L) site that is still under development. In addition to inclusion of copyrighted materials, the D2L site will allow for questions, comments and discussions.
The materials are grouped into specific topic areas:
* Introduction: What is Community Economic Development?
* A Systems Approach to Community Economic Development
* The Roles that Practitioners and Extension Educators Can Assume
* An Introduction to Location Theory
* Economic Growth Theory: An Introduction
* Data Analysis
* Community Economic Development Strategies
There is a second page to this website that has all of the support reading materials. It is is password protected for the copyrighted materials and you will need to contact me (email@example.com) for the password.
Introduction: What is Community Economic Development?
“Community Economic Development” is a merger of “community development” and “economic development”. Community development is traditionally thought of as focusing on building the social and political capital of communities through community organizing and the building of local institutions (leadership, business associations, effective government, community organizations, etc.). Economic development is focused on creating an environment that is conducive to economic opportunities. Often times this is narrowly thought of as job growth; but economic development is much broader.
What is Community Economic Development
Economists and Policy Discussions
A Systems Approach to Community Economic Development
Two approaches or ways to think about community economic development through the lens of systems “thinking” are outlined. The first is the Shaffer Star which points to the community’s resources (land, labor, capital including both built and natural), markets (a capitalist economy), rules (laws), society (acceptable behavior), decision-making (being about to get to the root of a problem) and space (the community is part of a larger economy). The second is the community capitals framework as suggest by Nel and Jan Flora. The Floras argue that there are seven capitals: financial capital, political capital, social capital, human capital, cultural capital, natural capital and built capital. Viable communities require investments in each of these capital. There is significant overlap between the Floras’ community capitals and the Shaffer Star and both provide a framework to think about the community as a system.
- The Shaffer Star: Markets, or Supply and Demand
- The Shaffer Star: Decision-Making
- The Shaffer Star: Society
- The Shaffer Star: Rules
- The Shaffer Star: Resources
- The Shaffer Star: Space
- Export Base Theory and the Shaffer Star
The Floras’ Community Capitals
This is a nice factsheet put together by Flora and colleagues.
- Community Capitals: Social Capital
- Community Capitals: Natural Capital
- Community Capitals: Built Capital
- Community Capitals: Human Capital
The Roles that Practitioners and Extension Educators can Assume
One of the challenges that Extension Educators face is the identification of the role(s) that they can assume in community economic development. As an educational institution the primary role is that of an educator with the ultimate goal of “helping communities make more informed decisions”. Helping the community “make decisions” is process oriented and facilitation of community discussions is a clear role, but is not the only role. The educator can assume the role of leader, organizer and cheerleader, among others. “More informed” decision requires bringing research based knowledge to the table. The educator does not have “the answer” but rather the necessary information for the community to make the most effective decision. The ability of the community to make those decisions and move forward is at the heart of the Shaffer Star decision-making node.
An Introduction to Location Theory
In order to fully understand the options that are available to communities in terms of community economic development it is imperative that one understands the location decisions of businesses. Why some types of businesses locate here and not over there is a basic question that needs to be understood before effective community economic development strategies can be formulated. The materials presented in this section are rather lengthy and could appear overly complex. We walk through the thinking of location theory from the early days of von Thünen and land use patterns to neoclassical location theory in the spirit of Weber, then walk through some alternative ways of thinking about location theory and we end with a review of Porter’s notion of economic clusters. Along the way we talk about the policy implications of the theories and simple empirical tools that can be used to help communities think through their options.
The powerpoints are broken into three parts:
Powerpoint Part I: Land Use, City Size and Introduction to Neoclassical
Powerpoint Part II: Demand Maximization Approach (Best for retail, personal services and some business services)
Powerpoint Part III: Alternatives to the Neoclassical View and Porter’s Notion of Clusters
Classics in Location Theory
Webber and An Introduction to Location Theory
What do we mean by “business climate“? Within economic development the notion of “business climate” draws significant attention in the popular media and community discussions. The problem is that most people’s view of business climate is outdated and reflects the economy from more than 50 years ago. In this powerpoint and set of factsheets I outline some of the more current thinking.
The Value of Business Climate Rating (Community Economics Newletter Dec 2004)
Economic Growth Theory: An Introduction
It is almost a prerequisite for work in community economic development to understand the drivers of economic growth. As discussed at length in our definitions of community economic development we made distinctions between economic growth and development. We also asked if economic growth is necessary before we can talk about economic development. As such, having a basic understanding and appreciation of economic growth theory is necessary. As with all economic theories, our thinking has evolved over time, building on previous thinking and introducing new ideas. At the heart of the question is whether or not there is a role for public policy in fostering economic growth. Some economists believe that capitalist markets through perfect competition are sufficient to ensure growth. Others believe that proactive public policies are required to address short-falls in those markets. In other words, does Adam Smith Invisible Hand of competitive market forces work, or does the Invisible Hand occasionally drop the ball? In this section, we will walk through the history of economic growth theory and where the current thinking puts us.
A History of Economic Growth Theory
One of the underlying philosophies of community economic development within an Extension setting is to “help communities make more informed decisions”. Help communities process information and make decisions is the “process” side of Extension educational programming. The “more informed” is bringing the relevant research based information to the table and represents the “content” side of Extension educational programming. There is always a challenge in finding the proper balance between process and content and the right balance will vary across communities. Some communities are well organized and have the correct institutions and decision-making processes in place. In these communities the appropriate balance may be more on the content or research side. Other communities need to focus on developing those necessary institutions and the appropriate balance may be on the process side. In addition, conducting a research project may serve as a means to engage the community in a broader discussion. Regardless of the proper balance, if an Extension educator is to work in the area of community economic development it is vital that they have a fundamental grasp of the strengths, weakness and trends in the local economy. Therefore exploring the local economy using some of the tools and resources outlined here is a natural starting point for Extension programming in community economic development.
Part I: An Introduction to Types and Sources of Data
Examples of Resources
Hustedde, Shaffer and Pulver (This is the classic “how to data” analysis for CED.)
Link to Headwater Economics EPS-HDT Working Files
Link to Headwater Economics “Ready to Print” County Profles
Example of WIDWFD County Profile
Link to WIDWFD County Profiles
Data Resources from our Center for Community Economic Development
Community Economic Development Strategies
One of the most fundamental struggles that the community face in thinking about community economic development is moving beyond industry recruitment. Communities often fall into the trap of equating economic growth and development as short-term job growth via the recruitment of manufacturing firms. Communities, however, are faced with a wide range of strategies ranging from the simplistic to the complex. Here we will think about different processes that communities can undertake, ways of thinking about community economic development, and more importantly specific strategies or actionable steps that communities can undertake to improve the well-being of residents.
Is the Community Being Strategic?
For Want of a Simple Decision Rule
The Pulver Approach: Basic Employers
The Pulver Approach: Improve the Efficiency of Existing Businesses
The Pulver Approach: Encouraging New Business Formation
The Pulver Approach: Improve the Ability to Capture Dollars
Resources for Community Economic Development
There are a wealth of various manuals and “how to” documents that are widely available to the community economic development practitioner and educator. Some of these resources are clearly aimed at practitioners while others are more focused on Extension educators. For the latter the four USDA sponsored rural development centers (NCRCRD, NERCRD, SRDC and the WRDC) provide a wealth of resources.
One of those resources is the TAKE CHARGE program developed by the North Central Regional Center for Rural Development. The TAKE CHARGE program, originally developed in the late 1980s and early 1990s and undated in 2001, is a self-contained “strategic planning” program with a strong community economic development focus program. TAKE CHARGE should not be confused with a comprehensive planning program, it is clearly a community economic development focused program. The program outlines a step-by-step process from identifying key community members to the contents of each session to strategies for follow-up. Included are a series of appendices that provide templates for each step of the program. Unlike other programs that have been offered the TAKE CHARGE program is designed to be flexible and easily adjustable to unique community characteristics.
A second resource is the STRONGER COMMUNITIES TOGETHER (SET) program developed by the Southern Rural Development Center. This program is aimed at taking the TAKE CHARGE program to the next level. But rather than a “how to” manual like TAKE CHARGE this is more of a web-based program: by this I mean that the resources are organized on a website. From the SET website: “Stronger Economies Together (SET) enables communities and counties in rural America to work together in developing and implementing an economic development blueprint for their multi-county region that strategically builds on the current and emerging economic strengths of that region. Creating, attracting and retaining jobs as a single rural county, in isolation from other nearby counties, is becoming increasingly ineffective. In today’s global marketplace, economic development progress is more likely to be realized when rural and metro counties work together as a region to assess, design, and implement plans that build on their assets and comparative economic strengths.” One must keep in mind that the SET program is a “living” program in that it is constantly evolving as the program is applied in different rural communities. Here is a very recent formal evaluation of the SET program by Beth Honadle and her colleagues.
One of the primary sources of emergency funding opportunities for communities facing an economic crisis is the Economic Development Administration (EDA) within the US Department of Commerce. While the federal guidelines are constantly changing in terms of eligibility requirements and exactly what the EDA is looking for, they have provided some basic resource materials, particularly the COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGIES GUIDELINE document. It provides a basic template for what EDA is looking for and how a community may want to proceed in the face of an economic crisis. If one puts the rough outline of the TAKE CHARGE, SET and the EDA CEDS programs side-by-side one should notice significant overlap.