Why The Ones You Have Mean More Than The Ones You Will Get

Vol. III, No. 342 - A Primer on Local Economic Development

Every few years, a community celebrates landing a new employer. Press releases go out, elected officials gather for a ribbon-cutting, and the local paper runs a headline about jobs coming to town. It’s good news, and it deserves recognition. But if that’s the only economic development strategy a community is running, it’s playing a losing game.

Here’s what most economic development professionals know but rarely say out loud: the vast majority of jobs in any community are created by businesses already operating there — not by companies recruited from somewhere else. Expansion of an existing manufacturer, a local retailer adding staff, a service business opening a second location — that’s where real, sustained job growth comes from. Attraction gets the attention. Retention and expansion do the heavy lifting.

Healthy communities pursue both tracks. They compete for new investment while simultaneously building the kind of environment where local businesses don’t just survive — they grow. The problem is that the second track is harder to publicize and easier to neglect.

When a community invests in its existing businesses, the economic returns stay local. Dollars spent at a locally-owned business tend to recirculate within the community — supporting suppliers, vendors, and employees who live nearby. This multiplier effect is real and measurable. It’s what separates a community with a functioning local economy from one that’s economically dependent on a handful of outside employers.

Beyond the economics, local businesses are what give a place its character. The hardware store that’s been on the square for forty years, the diner where city council members and teachers eat lunch side by side, the boutique that stocks work from local artists — these aren’t just businesses. They’re part of what makes a community worth living in. Recruiting chains and outside developers can generate activity, but they can’t manufacture that. And once you lose it, you don’t get it back.

There’s also a risk management argument here that doesn’t get made enough. When a community bets heavily on attracting outside businesses, it accepts real uncertainty — about long-term commitment, about staying through a downturn, about whether the incentives offered were worth the cost. Local businesses have already made their bet on the community. They’re embedded in it. Their owners often live here, send their kids to school here, and sit on local boards. Their incentives are aligned with the community’s in ways that a recruited business simply isn’t.

None of this means attraction is wrong. A smart economic development strategy pursues new investment aggressively. But it doesn’t do so at the expense of the businesses already here — and it doesn’t treat a ribbon-cutting as a substitute for the quieter, more sustained work of helping local businesses access capital, navigate regulations, find workforce, and grow.

The communities that get this right aren’t the ones with the most announcements. They’re the ones that compound small wins over time until the local economy is genuinely diversified, resilient, and rooted in something real.

Announcing our May Community Survey!

Every other month, this publication takes time to ask our readers how they feel about the happenings in their hometown! What are the challenges? What are the opportunities? Is your hometown headed in the right direction? Our survey is the easiest way for you to express your thoughts. Next month, this publication will report out on the results.

Thanks for your time and your participation! It is greatly appreciated!

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