The EDO's Dilemma

Working with economic development leaders, we identified several common operational issues:

• Budget pressures,
• Increased focus on ROI,
• Obsolete technology and operating environments,
• Business processes and activities that do not line up with their members vision or goals,
• Diminishing relevance with member companies

The economic development organizations, (EDOs) challenges are increasingly difficult. For example, states are reporting that despite the considerable investment to recruit new companies, the effort resulted in less than 5% of the new jobs created. With few exceptions, the return on investment for new company recruiting is very close to zero.

In Florida during 2010, for example, 99.07% of all new job creation was the result of existing business expansion or new startups in the state. During 2011, there were less than 3,000 major new business facility development projects in the entire U.S. The competition among state and local EDOs is fierce.

Recruiting and expansion are both important, but in today’s competitive environment; EDOs must deliver relevance and actionable support to local companies as they push to grow their companies. Supporting organic growth requires a different set of tools and skills.

Successful EDOs have several common themes. The critical step was creating a pull market so that companies want to establish there. How an EDO builds a business friendly ecosystem, within current budget restraints, is the basis for our products and services.