Although the network of local economic development groups is very
extensive, budgets are typically small and sophistication levels
Many local development organizations run on the gas equivalent
of fumes, depending on part-time or volunteer staff to help market
and broker business assistance deals, while operating on a shoestring
budget of $10,000 to $40,000. Even those organizations with one
or two paid staff might not have a budget of much more than a $100,000.
Because budgets tend to reflect the relative size of the market
they represent (in people terms), some organizations in bigger cities
have multimillion dollar budgets.
The exact number or proportion of programs run by paid staff is
difficult to estimate. Anecdotal evidence and estimates from state
and local development officials indicate that much less than half
of local development organizations have paid staff.
In South Dakota, for example, only about one in four local development
organizations had either full- or part-time paid staff, according
to a state official there. That proportion dropped to about one
of five for North Dakota's estimated 280 or so organizations.
In some cases, organizations with a broader geographic mission
are organized to augment efforts already taking place at the city
level. For example, in rural areas of Wisconsin, the focus of local
economic development "tends to be county-based simply because cities
are not large enough to sustain a budget" for paid staff, according
to Jack Sroka, head of the Barron County (Wis.) Economic Development
There are eight different economic development organizations in
Barron County, whose largest city is Rice Lake, with a population
of about 8,000. Most of these groups are city-based and managed
by volunteers. The BCEDC was formed six years ago to provide dedicated
staff to coordinate activity "and to avoid the one-community-against-the-other
kind of competition" that some efforts fall prey to, Sroka said.
"I think it's all pretty complementary."
Such local effortseven volunteerare badly needed,
many sources said, especially in rural towns struggling to survive.
"Left to the market, smaller communities would just die sooner"
without economic development programs, said Evan Barrett, head of
the Butte (Mont.) Local Development Corp.
Dependent on struggling agricultural or natural resource industries,
some economic development efforts in rural communities are driven
by "a sense of desperation," according to Jerry Murphy, executive
director of the Gogebic County Economic Development Corp. in the
Upper Peninsula of Michigan. "To maintain a community and to grow
a new, diverse economy from the ashes of the old is a significant
motivational challenge for both investors and residents of the community."
Stark County, N.D., is competing with Third World countries for
businesses, which can provide lower labor and distribution costs
while still having good access to raw materials, according to Gaylon
Baker, head of the Stark Development Corp. in Dickinson. When it
comes to business expansion, Baker said, "Let's not kid ourselves,
western North Dakota is considered to be as far away as Central
America, maybe farther."
Facing such obstacles, the goals of many local development groups
are often very modest, especially in rural areas. "Moving one family
in at a time is sufficient if we can keep that momentum going,"
said Cal Klewin of nearby Bowman County, N.D.
The same was true in Renville County, Minn., according to Julie
Rath, head of the county's economic development commission. "We
are rural enough that any one business plays a major impact on the
vitality of the entire county and all its citizens."