06-B PEDC Budget 2007-2008 - Laserfiche WebLink

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Lamar County - Paris Economic Development Plan Consider the Montgomery County example. If Montgomery County was a declining rather than growing county, an economic development policy that attracted an additional office park might not require additional highway capacity. The office park's revenues per worker would be about the same, but most of the public service costs in the 1989 study would be irrelevant. Guiding Principle 6: Economic Development Policies That Increase Market Efficiencv Provide Public Benefits Bevond Increasin2 Net Local Jobs. Inefficient markets supplying business with capital, training, and information may impede some businesses from starting-up, expanding, modernizing, or surviving. These problems are particularly important for small and medium-sized businesses, and minority and women-owned businesses. Many of the economic development programs already mentioned provide services to address these problems with the business development process. Such services, if they have a value to business that exceed their costs, can be socially beneficial. Even if they do not affect overall net local job growth, they can help provide better quality goods and services. For example, suppose that a local group provides training to help minorities and women start new restaurants. Suppose these new restaurants are able to out-compete other local restaurants and drive them out of business. Even if total local employment is unchanged, the local restaurant sector will be offering a better product. If the greater productivity of the new restaurants exceeds the costs of training the new restaurateurs, then local consumers are better off. ORGANIZATION Guiding Principle 7: Economic Development Or2anizations Must Participation Bv Both the Public and Private Sectors. Encoura2e Economic development programs cannot be totally publicly-run because effective economlC development requires private resources, credibility, and expertise. Public resources for economic development are limited, so these resources must be used to leverage private resources. For example, compared to 100 percent government-financed business loans, programs such as the Capital Access Program that encourage private lending can support more lending with a given government budget. As another example, charging fees to businesses for providing advice on business modernization, as is done by Industrial Resource Centers in Pennsylvania, allows more firms to be helped with limited public dollars. Moreover, compared to government agencies, economic development organizations with a private veneer may be viewed by some small businesses as more credible service providers. As one staff person of an Industrial Resource Center put it, "If I showed up with a business card saying 'I'm from the state and I'm here to help you', I'd get tossed out on my ear." But local economic development cannot be totally privately-run and financed either. The rationale for economic development programs is that the private market on its own inadequately supports some business development. If the public is to subsidize economic development, there must be some public monitoring to ensure that such subsidies achieve their social goals. Thus, regardless of whether an area's lead economic development organization is public or private, an effective economic development process must enlist the money and expertise of both the public and private sectors. Paris Economic Development Corporation Page 47