Community & Economic Development Defined

Community Development is a term that can refer to comprehensive strategies or small projects. Because the use of the term community development is used in such a wide range of situations, the idea of community development can be misunderstood. In a similar way, Economic Development is a subject that can be misunderstood and one that people know very little about.

What is Community Development?

From a community perspective, community development includes nearly every type of purposeful community change. Creating purposeful change (development) of aspects of economy, health, physical infrastructure, governance, social needs, or other aspects of living addressed at a collective (community) scale- are expressions of community development.

Why do communities do Community Development?

Investments in community development are often intended to improve the quality of life for residents. Efforts to guide community development frequently start by assessing areas of needed change, or by identifying a preferred status the community would like to achieve. Results of Community Development can include:

• A sense of pride and ownership in/for the community
• A healthier environment
• An engaged citizenry working in the interest of all the community
• Improved services for community residents
• Increased education opportunities
• Increased employment or wealth accumulation opportunities
• Overall improved quality of life

What is Economic Development?

Economic Development usually takes three forms in communities:

1. Business Attraction
2. Business Creation (Entrepreneurial Development)
3. Business Retention and Expansion

All three forms of economic development aim to create new primary jobs that pay more than the prevailing wage, increase the amount of income coming into the community from outside its market area, and create greater capital investment in the community. The strategy is to achieve this in a number of diversified industries.

Why do communities do Economic Development?

Economic development has three main purposes:

• To give a greater number of people greater access to wealth through personal economic growth.
• To increase the tax base of communities in order to provide higher quality public services to citizens.
• To diversify the economic base and thereby cushion the community against economic shocks.

Ready to dig a little deeper into all things Economic Development? We have created an Economic Development Toolkit that will help skill up your economic development knowledge with several resources that you'll now have at your fingertips.

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Who is Involved in Community & Economic Development Locally?

Community scale changes benefit from representation from the community scale systems. Do you know which people in your community have roles to play in community & economic development (CED)? It is important to understand that CED is a shared effort among several stakeholders, and Extension can play an vital role. Here are just a few who may be in your community:

• Local government
• Civic groups
• Local business or Chamber of Commerce
• Economic development/banking or foundations   
• Religious institutions
• Education systems (from primary and secondary to university/formal and informal)
• Health (can include public/private)
• Recreation

Development initiatives that impact everyone in a community are supported more broadly and more sustainably when the members of the community are represented and engaged in the process. While it is nearly impossible to have every person involved in every decision, it is generally true that people like to be involved in decisions that impact them. Thus, development initiatives should utilize processes that promote broad participation and strive for justice, equity, and sustainability.