Creating a local economic development strategy isn’t a new concept, but today’s cities have more resources than ever at their disposal for crafting a strategy that works. Of all the resources available today, analytics is one of the most important.
In this blog post, we’ll explain what a local economic development strategy (LED strategy) involves and how analytics can support its objectives.
What is a Local Economic Development Strategy?
A local economic development strategy is a comprehensive plan designed to ensure that a community’s economy remains strong both today and in the future. Business recruitment, retention, and workforce development are all facets of the strategy, which should be based on a realistic assessment of economic trends and opportunities.
Because a LED strategy is so broad, developing and executing the strategy typically includes many stakeholders, such as city government officials, local business leaders, representatives from area NGOs, and other interested members of the community.
How Analytics Support Local Economic Development Strategy Development and Execution
To be effective, a LED strategy needs to be carefully researched and planned. It’s not enough to rely on national trends or anecdotal evidence. You need to understand what’s actually happening in your market so you can identify the appropriate response.
This is where data and analytics can play a role. Analytics give you insights to inform the planning process. The primary applications include the following:
- Confirm hypotheses or dispel biases. You likely have an opinion about the right economic development approach for your community, but analytics can help you to know with confidence. This is especially helpful when a stakeholder is advocating for a tactic that does not align with the community’s long-term best interests.
- Identify opportunities. What is the consumer base of your city, and which types of services are most likely to appeal to them? Which sectors are currently underrepresented based on demand? Analytics can help you to identify those opportunities.
- Make the case for funding. Presenting data and statistics on your community is a powerful way to make the case for grant funding or budget allocations.
- Recruit new businesses. The site selection process is an expensive, risky investment. Presenting a prospective business with data on why their business will be successful in your market provides confidence in the decision.
- Market your community to tourists. Analytics aren’t just for business recruitment; they are also used for tourism development, which can be an important economic driver in some markets. Identify who is visiting your community so you can market to potential visitors who fit the same psychographic and demographic profiles.
Executing Your Strategy
Defining your plan is the first step, but successfully implementing an LED strategy takes time and collaboration. To learn more about fostering collaboration in your economic development processes, read our blog post, “Economic Development Strategy: Collaboration is the Key to Success.”