In November 2005, The Perryman Group set forth the idea that economic development efforts can be viewed as a “market,” with potentially locating firms as the “buyers” and geographic locations as the “sellers.” The paper reflected ideas from some of Dr. Perryman’s pioneering work shaping the field over three decades and has since been used to help inform economic development professionals as well as explain the need for incentives to various audiences. It has been the subject of a video, presented at national economic development conferences, and used as reference material in numerous economic development educational programs.
The location of economic activity has always been driven by the need to optimize outcomes. Long before markets existed, the earliest civilizations formed around great rivers that provided water, fertile land, and transportation arteries. As commerce expanded, natural ports had an era of prominence.
This paper explains modern economic development in a consistent framework which permits systematic analysis. When viewed in a broad and appropriate context, many aspects of a proper strategy become clearly defined, and many “dos” and “don’ts” unambiguously emerge.
Essentially, there are two key entities involved in location decisions—firms and geographic areas (often defined by political designations such as states, cities, etc.). Each of these groups has a very specific agenda. The companies are seeking to maximize shareholder value (or returns to owners in the case of private companies). Communities (states, etc.) are typically trying to secure long-term prosperity for their residents and sustainable, high-quality growth. Both may be represented by “agents” (management or site selection consultants in the case of firms; chambers of commerce, economic development corporations, or economic development professionals in the case of communities). These two groups may be thought of as participants in a relatively well-organized market—the market for prosperity! The entire white paper is available for download below.