The three-legged stool of economic development is made up of business retention and expansion, business attraction, and entrepreneurship and small business development. In recent years, it has become apparent that the strength of a community’s workforce undergirds this framework. Thus, in the diagram below, workforce development has been added as a foundation for each of these activities.
Placemaking, according to Wikipedia, is a multi-faceted approach to the planning, design and management of public spaces. Placemaking capitalizes on a local community’s assets, inspiration, and potential, with the intention of creating public spaces that promote people’s health, happiness, and well-being. While the process is heavily based in design, placemaking results in more choice of housing, transportation options, and retail options, which improves people’s lives across the economic spectrum.
Placemaking enhances economic development efforts in each of the three legs of the stool, as well as through impacting workforce development. Beginning with this installment, a new series of articles in the Fourth Economy newsletter will delve into the role that placemaking has in economic development as the economy continue to transition towards the knowledge and service economies. Competition is increasing because talent and companies are tied more and more to places that support knowledge economies rather than natural resources or commodities. As the playing field levels, the competition for jobs and talent is tied to quality of place.
Often, when discussing economic development, business attraction comes to mind first. Business attraction is the process of marketing your community to firms that fit well with its already-existing advantages. Marketing can happen through an internet presence, as well as through traditional means, such as brochures or advertisements in magazines. Another tool that is used to entice business are incentives in the form of lowered taxes, financial grants, or providing infrastructure.
There are a few disadvantages to these methods. Advertisements are designed to catch the eye of site selection consultants and corporate location specialists; however, these populations likely already have access to scores of data about your community through public data bases such as the Census Bureau and private databases available via subscription services. If the story that this data tells about your community does not correspond to their needs, then no matter how much is invested in advertising, there won’t be much interest.
Incentives in the form of lowered taxes, grants, or infrastructure improvements can be an effective way to bring new businesses into a community. However, offering tax incentives can lead to a “race to the bottom” with communities attempting to outbid each other. Furthermore, offering these types of incentives can cut into school budgets, and divert funds from other priorities.
Placemaking can therefore play an important part in business attraction because it improves the quality of life of a community. Quality of life is the top reason why company executives chose to locate in a place where they themselves have to live. Improving this factor can improve the impact of advertising and decrease the need for tax incentives by providing intrinsic value for employees living in the town. While all aspects of business attraction are important, placemaking improves the product being sold, which, in turn creates a better lifestyle for both employees of new firms and existing residents.