5 min read

How Municipalities Can Drive Local Economic Development

By GovPilot

With the cultural shift to a “work from anywhere” mentality, as well as the recent passage of the Infrastructure Bill, there are many reasons for municipal governments to be excited about local economic development and the adaptation of civil society. 

Americans are moving out of large expensive cities into smaller secondary cities and suburban neighborhoods, meaning that municipalities of all sizes should prepare for an increase in the registration of new businesses, new zoning, and the need for more advanced digital and physical infrastructure to accommodate population growth. 

Here’s your guide to why government led local economic development is important, and how your municipality can help businesses thrive in your community.

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Why Should Local Governments Care About Economic Development?

Financial success and higher property valuations means less stress and a better quality of life for constituents. Successful businesses registering in your community means more tax revenue for your municipality and a bigger budget to implement ambitious initiatives. Prospering business and happy constituents mean re-election!

The importance of local economic development is at unprecedented highs, with rising inflation and record unemployment. Your local government must prioritize economic growth to create jobs, keep up with rising costs and maintain a competitive advantage over other municipalities or regions that potential constituents might be considering.  

What is Local Economic Development?

Local Economic Development (LED) is the process of encouraging business development to boost the local economy, provide new work opportunities, and improve the quality of life for the entire community. 

Municipalities are oftentimes judged on the local development of the economy within their community,  as local governments wield the power to encourage business registration and job growth within their neighborhood. Failure to stimulate business growth and encourage new work opportunities in the area will cause constituents to lose trust in their local government and elect new government officials. 

How Does Local Economic Development Benefit Local Governments?

There are countless benefits to growing the economy within your community.

Here are some of the benefits of local economic development for municipalities:

1. Happier Constituents (and Re-Election!)

There’s no denying that financial freedom reduces stress. Poverty reduction is feasible by bringing relevant jobs to your town and by supporting self-employed entrepreneurs. What better way to reduce stress for local people? 

Happy residents will surely be inclined to keep their elected officials in office, and the rise in job availability will encourage more people to move in your area. 

2. More Construction Development

With infrastructure bill funds and economic development in your area, there will be a major opportunity to expand on the number of commercial, residential, and public buildings within your community. 

An increase in construction within your county will advance economic development even further.  

3. More Tax Income & Application Fees

Economic development means more business registration, construction projects, and new constituents moving in. An increase in tax income and application fees from construction permits and other licenses will continually flow to your local government for years to come. 

This boost in funds can be used as needed to solve problems at the local level. 

How Can Municipal Governments Encourage Economic Development?

Luckily for you, the Infrastructure Investment and Jobs Act as well as the American Rescue Plan funds will be putting grant money straight into your community. If used accordingly, your economy will be boosted with improvements to your digital and physical infrastructure. 

Here are the best LED strategies to grow your local economy with municipal support: 

1. Leverage Infrastructure Bill and American Rescue Plan Funds

The infrastructure bill and American Rescue Plan include funds for local governments to allocate towards physical and digital infrastructure. Choose wisely about how your locality spends its funding, and consider how many construction and IT jobs can be created in your community by hiring outside support on your selected infrastructure projects. 

For more information on these bills, read the Infrastructure Bill: What It Means for Local Governments as well as the American Rescue Plan: What It Means for Local Governments guides.

2. Automate Business Registration and Permit Applications

There will be a lot of work for public sector employees with the rise in infrastructure projects and business growth. Automate government processes like online permit applications, business registration, and other application types via your website to save your clerk’s department hundreds of hours a month. 

To learn more about how automation can help with local government innovation, explore these GovPilot case studies:

If your community has a government job open that can’t be automated, read on in the Public Sector Recruiting guide. 

3. Urban Transformation

Taking action to improve the physical infrastructure in your town will create construction jobs and improve the lives of constituents. Consider upgrading communal areas like public buildings and county and township parks to be natural disaster proof and more modern. 

You can also work towards making your community accessible for pedestrians and cyclists as a 15-Minute City. Communities that are walkable are said to improve quality of life and are appealing to people looking to move out of crowded, non-pedestrian friendly areas. 

4. Better Broadband Access

The infrastructure bill is specifically offering grant funds towards improving wireless internet access. The internet should be accessible to everyone nationwide, regardless of location or income level. 

Improving internet speeds will rapidly advance local economic development, as people will be inclined to work from home and even start their own remote businesses. Additionally, there will be demand for local private sector IT jobs to establish better broadband within your area. 

5. Let Data Guide Decision Making

If you haven’t made the switch to government management software already, now’s the time. Leveraging software across your departments won’t only save time, but will allow you to collect meaningful data.

As applications roll in via your website, relevant data on which applications are being filed will allow you to consider what type of project your local government needs to prioritize. With technology like complaint management software, constituents can contact you directly to voice their concerns, giving you meaningful data on issues within your community that you should address. 

Municipality Led Local Economic Development - In Conclusion

You owe it to your constituents to create job opportunities and grow the local economy to the best of your ability. Take action to iron out your government workflows so you can be as supportive to local businesses as possible, and leverage federal funds to make truly meaningful improvements to your community. 

To learn more about how digital infrastructure can boost your local economy, book a consultation. 

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Local Economy FAQs

1. What is Local Economic Development?

Local economic development (LED) is a micro-level view of the performance of an economy within a specific region, like a town, city, neighborhood, or county. 

Local governments have a direct impact on the local economy by encouraging business registration and job creation, encouraging sustainable growth by providing work opportunities to private businesses like construction contractors and IT workers, and providing modern internet access.

2. How Can Local Governments Improve the Regional Economy?

Improvements to regional development of digital and physical infrastructure via public-private partnership is the most meaningful way can community leaders can encourage meaningful economic growth. 

Better physical infrastructure for community members to access can improve quality of life and create business opportunities for construction companies, and employment opportunities for those seeking work. Improvements to broadband can bring globalization at a regional-level, as remote work opportunities will allow entrepreneurs to work from (and land clients from) anywhere.

3. What Economic Development Efforts Are Best?

Regional planning should dictate which LED endeavours are most suitable for your community. How is current broadband infrastructure? Has local development activity considered natural disaster resilience? With federal legislation putting infrastructure funds in local policy makers' hands in the near future, investment in infrastructure will likely be most meaningful way for local stakeholders to see a boost in economic growth within your community. 

Additionally, consider public services that can lead to sustainable development overtime, like skills development courses for constituents seeking work, simple business registration to encourage entrepreneurship, and offering innovative solutions to keep constituents happy.

Read on: 


Additional Economic Development Resources (Source List): 




https://www.cnu.org/publicsquare/2021/01/28/walkable-community-stock-rises-young-families-want-bigger-homegovernment management softwarenatural disaster proof

Tags: Government Efficiency, Digital Transformation, Blog, Civic Engagement