In order for any community to flourish, investment efforts into the future of business, workforce and community are needed. Opportunities for jobs and quality of life are just a few of the ways economic development has the potential to better every member of the community. The impact of economic development on a community is the leading motivator behind every decision, as it affects every citizen. It is the process of creating greater wealth within a community by bringing new businesses to drive the economy forward.
In the late 1970s, the Texas legislature passed the Development Corporation Act which allowed a municipality to create a non-profit development corporation that could promote the creation of new and expanded industry and manufacturing activity within the city. At the time, development corporations were not legally allowed to receive funding from the state or local governments because of a Texas constitutional prohibition. In 1987, the voters of Texas approved an amendment to the State Constitution that said expenditures for economic development could serve a public purpose. Quickly after, the state approved the funding of these development corporations through sales taxes. The purpose of this economic development corporation was, and still is, to bring primary jobs to Texas.
A primary job is one that produces goods and/or services for customers that are predominantly outside the community. An example is any good or service being sold and distributed nationally or internationally. Once an employer has paid for the distribution and sale of products and services, the wealth is distributed inside of the community through wages paid to employees and through suppliers. By housing primary jobs within your city, new “outside” dollars contribute to the growth of the community’s economy.
In partnership with primary jobs, there are secondary jobs. A secondary job is when products or services are sold inside the community. By creating local businesses and selling goods inside the city, money is circulating throughout the community. In order to keep a stable economy, a community needs a balance of both primary and secondary jobs.
A third important factor of a city’s economy is the overflow of money. This is when citizens take their business elsewhere. This could include online shopping or travel.
So, why is this process important to the growth and development of a city and its economy economy? There are two components of economic development: business development and community development. While the two are different, they go hand in hand. In order to have businesses move to our great city, we must invest in the development of our community.
A thriving economy benefits the community as a whole for a number of reasons. As “outside” dollars make their way to the pockets of community members, it is then used to purchase goods and services from companies within the city limits. At the end of the day, it affects every citizen by generating tax dollars for the economy and stimulating job growth. When you consider local communities are flush with cash, thanks to their local sales tax allocation earmarked for economic development, projects in business development and community development are going to chase those dollars.
Here in Lubbock, these projects include the Lubbock Economic Development Alliances’ downtown and east side projects and the revitalization of Lubbock’s downtown, among many others. Economic development does not just involve attracting outside dollars. Most communities also include small business development and business creation in their definition of local economic development as well.
As Lubbock continues to grow through emerging start-ups and recruitment efforts for our great city, the money poured into the economy is used to better the quality of life for its community members. This can include improved infrastructure, the creation of parks and the addition of bike lanes, to name a few.
Along with the two main components of economic development, there are also two main functions: attraction and retention.
It is the role of the economic development council to provide information and assistance to companies that are interested in the developer’s community for relocation or expansion. This also includes marketing the city to target business industries best suited for the community. Economic developers do not create new jobs, they provide information and assistance to companies who create new jobs.
Economic developers also work with elected officials and community partners to ensure that a positive environment for business growth exists in the community. The same factors that attract new employers will keep existing businesses in the community. These factors include, but are not limited to, proximity to markets, a skilled and ready workforce and quality of life.
While a city invests in its citizens, it simultaneously builds a place where people want to live and businesses want to come. Whether the industry is health care, energy, manufacturing or somewhere in between, our commitment at LEDA to helping business grow and succeed is unparalleled. With one of the most highly educated and economically diverse communities in the region, high-quality education and great quality of life, there’s no better place to set up shop than Lubbock, Texas.