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All economies are local: making your community an economic machine

WICKED LOCAL – (by Christopher Robbins) Massachusetts communities can no longer rely on state or federal aid to fill their budget gaps. Therefore, each municipality must take responsibility for its own economic fate.

Towns and cities are failing to take advantage of economic development opportunities and tax revenues.  They don’t understand how to create the optimum number of local jobs, nor understand community metrics that determine their economic well-being. They lack knowledge about their industry clusters, especially about which are thriving or struggling. They do not know the decision makers at those enterprises – the people who pay business taxes and create jobs.

Gov. Deval Patrick’s Economic Development Policy and Strategic Plan, “Choosing to Compete in the 21st Century,” recommends that each municipality needs a “CEO” and team to create and implement an economic development plan for job growth.  Many municipalities are forming economic development corporations or committees to encourage new business establishments, developing supportive customer service policies, and providing predictable efficient regulatory processes.

TechSandbox, an incubation center for technology and science startups, moved to  Hopkinton after selectmen voted to waive building permit fees and explore a special tax deal – the kind of public-private partnership that is key to supporting small business, creating new jobs for the innovation economy, and fostering growth. Marlborough formed an Economic Development Corporation that works with municipal and private investors to foster economic development, job growth, and community revitalization.

To enjoy the benefits of a robust economy, each municipality must become a high performing, self-reliant economic engine operating on four cylinders: residential; business; public sector; and nonprofit.  Each cylinder represents an indispensable component of the local and regional economy, fueling millions of dollars of activity through wages, the purchase of goods and services, and payment of taxes.  To understand how these components influence our local and regional economy, municipalities can design and implement a three-step process.

First, municipalities need to develop an economic profile with an appropriate set of metrics, and then track their historical performance. With this information, a municipality can better understand how its local economy works – its strengths, weaknesses, and hidden potential.

Examples of these metrics include payroll data from local employers; school budgets and per-pupil expenditures; housing starts and trends; municipal revenues; cost of living measures; number of employers by sector; job statistics; population trends; and demographics.

An excellent source of data relating to economic conditions is Framingham State University’s MetroWest Economic Research Center.

Only a diverse business base can help municipalities survive economic storms and capitalize on opportunities during prosperous times.

Within industry clusters, additional metrics can be highlighted, including: number of local employees, top employers, income data, products and services made or provided locally, economic outlook for each sector, contact information for business and nonprofit leaders. Outreach then becomes possible. Southborough schedules meetings monthly with business and nonprofit leaders to learn how the town can help them prosper.

MIT developed a Community Economic Development Tool Box, where one can view profiles of economic indicators by county and compare the profiles to state and national data.  The website, mass.gov/lwd/economic-data/, (click on: other resources / municipal data), as well as municipal tax rolls are good sources for identifying your local businesses.

Third: Collect and interpret your municipal financial data and trends. Integrate your economic profile, portrait information, and economic development action plan into the annual municipal budget process. Analysis of this data can be used to determine the best opportunities and to plan next steps for growth and job creation.

Then explore opportunities to create public-private partnerships to reduce the cost of government, lower residential taxes, and improve the delivery of core services.  To succeed, each municipal and state leader must be held accountable for job growth and our economic wellbeing. Only in this way can we ensure our fiscal stability and quality of life.

Christopher Robbins is a member of the  Economic Development Committee of Southborough; on the Board of Directors:of the Corridor Nine Chamber of Commerce, and is past president of the Southborough Business Association.

This op-ed originally appeared here.