Economic Development for Latah County, Idaho

Jim NelsonProfessor, Agricultural Economics

University of IdahoNovember 2, 2005

Understanding how economic development happens

Households

Basic Industry

LocalStores

Labo

rG

oods & Services

Goods & Services

$

$

$

ProductsProducts

Your Community

$How an Economy

Works

(Simple Case)

Local Economic Development Can Occur in Two Ways --

• Export Enhancement

• Import Substitution

How economic development comes about

Import Substitution

Import Substitution is replacing items

purchased outside the

region with local production

Households

Basic Industry

LocalStores

Labo

r

Goods & Services

Goods & Services

$

$

$ Your Community

$ Supplies forSupplies for

Local BusinessesLocal Businesses

InputsInputs

$

Products

$

Goods andServices

$

Export EnhancementExport

Enhancement is expanding the

volume of goods and services

your region sells to the rest of the

world.

Households

Basic Industry

LocalStores

Labo

r

Goods & Services

Goods & Services

$

$

$ Your Community

Supplies forSupplies for

Local BusinessesLocal Businesses

InputsInputs

$

Products

$

Goods andServices

$

$

So, in general, that's how economic development occurs,

BUT

How do communities make it happen so as to meet their needs?

So, in general, that's how economic development occurs,

BUT

How do communities make it happen so as to meet their needs?

COMMUNITY INVOLVEMENT AND

PLANNING

A Critical Part of Community Involvement is to Build an Economic Development Plan around

Local Firms

Creation

Attraction

Retention

Expansion

Of local business activity, jobs

and income

--Planning--

Know Your Community!

Know Your Economy!

Local social, economic and demographic data.

Latah County Population

0

5000

10000

15000

20000

25000

30000

35000

40000

1970 1980 1990 2004

Latah Co

Moscow

Rural

Small Town

Latah County Small Town Population

0

100

200

300

400

500

600

700

800

900

Potlach Troy Deary Bovill Juliatta Kendrick

1970

1980

1990

2004

Latah County Per Capita Income

1980 1990 1995 2000

As % of U.S. 82% 75% 75% 71%

As % of ID 96% 93% 90% 89%

HANDOUTS

--Planning--

Know Your Community!

Know Your Economy!

Local social, economic and demographic data.

open -- www.accessidaho.orgclick – Community/County Profiles - Idaho Department

of Commercepoint to -- Statistics & Researchclick -- City/County Profiles

• What’s important?•Total employment•Total employee compensation•Direct compensation per employee•Employment growth

Know Your Community!Know Your Economy!

What do local folks want?

Know your community assets!•Citizen support for development•Local media support for development•Access to financial resources•Availability of energy resources•Infrastructure and community services•Labor force•Transportation systems•Housing, health services, schools …

Know Your Community!

Know Your Economy!

• What do local firms need to be more successful?•Labor force•Dependable sources of inputs•Marketing help•Infrastructure and community services•???

Know Your Community!

Know Your Economy!

TARGETING ECONOMIC DEVELOPMENT

Think about local firms.

Targeted Economic Development -- Export Enhancement

•Major employers (firms, non-profits, agencies and industry sectors)?

•What are the products they market? •Are their products further processed after leaving the local area?•Could some of the value-added be done locally?•Do other firms (out-of-area) market the products

of local employers?•Could local firms do some of the marketing being done by out-of-area firms?

Knock on Doors! Ask Questions!

•Major employers (firms, non-profits, agencies and industry sectors)?

•What are inputs?•Where do they get their inputs? •Could some inputs be produced locally?

Targeted Economic Development -- Import Substitution

Knock on Doors! Ask Questions!

** Lists should be for a functioning economy

(county or multicounty region??)

Generate lists** for import substitution and export enhancement opportunities.

•Build lists with

-local brainstorming and local legwork

-

• Business Plans– goals and expectations– strengths and weaknesses – targeting and attracting customers– keeping tabs on costs, pricing, profits & cash flow

• Feasibility Analyses (net returns and cash flow)– investment costs– operating costs– sales and revenues

Technical assistance –

feasibility analyses and business plans

(UI Extension and SBDC)

Remember to use C.A.R.E. Creation

Attraction

Retention

Expansion

When developing strategies for economic development --