by J. Katie McConnell, National League of Cities
Economic gardening, which first started in 1987 in Littleton, Colo., is increasingly being put forth as a mainstream strategy to grow local economies. Yet, it's still a concept that is largely unfamiliar to many people.
It's an economic development strategy
In short, it's targeted support for companies that are already in your community to help them grow.
According to the Edward Lowe Foundation, economic gardening is often referred to as a "grow from within" strategy. In contrast to traditional business assistance, economic gardening focuses on strategic growth challenges, such as developing new markets, refining business models and gaining access to competitive intelligence.
The strategy centers on providing market research to so-called second stage companies - growth-oriented businesses with external market potential that have moved beyond the startup stage. Typically, second stage companies employ 10-99 people and bring in at least $1 million in revenue each year. Chris Gibbons, who pioneered the program in Littleton, described the economic gardening process to a local Denver news blog:
"We do market research, competitor intelligence, industry trend work, search engine optimization and Graphic Information System mapping, and a lot of tools that big companies have. If you-re a company of 5,000 to 10,000 people, you probably have that stuff in-house. But if you-re a company of 20, 30 people, you-re doing good just to make and sell and get it out the door. You don't have the excess people to go and do that sophisticated stuff, and that's what we do for them."
To help generate jobs and revenue
Adding jobs is a primary priority for most cities. However, there are only so many large economic attraction deals each year and lots of communities vying for them. Further, as detailed in the New York Times, the use of the large incentive packages to attract companies continues to be controversial, especially as the public calls for greater transparency and accountability with public funds.
Given the challenge of attracting new companies, economic gardening provides tools for communities looking to support companies that are already in their backyard. And research suggests that these second stage companies can be big job generators because of their capacity to grow.
But it's no silver bullet
Any economic development program should be rooted in a long-term strategy based on a community's strengths and weaknesses. While economic gardening is an appealing idea, as with any economic development tool, it's no silver bullet.
To date, there are only a few examples available on the effectiveness of programs. According to Chris Gibbons "the program has helped entrepreneurs double the job base in Littleton from 15,000 to 30,000 and triple the retail sales tax from $6 million to $21 million over the past 20 years." Additionally, according to an economic impact analysis of Florida's pilot economic gardening program, GrowFL, companies who participated in the program created an average of 5.2 net new jobs per company.
Challenges with economic gardening include overcoming a lack of trust in the resources a city can bring to the table, building awareness about programs and actually identifying second stage companies.
This is echoed by Doug Bene, economic development manager for the City of Longmont, CO, who oversees the city's economic gardening program. According to Bene, a challenge is finding and engaging with second stage companies that may not be involved with the city beyond the permit and zoning processes, and further convincing business owners that the city has something of value to offer them.
These challenges are common with many government-led business assistance programs. Working with trusted partners, like the chambers of commerce, universities, Small Business Development Centers or trade groups can help overcome some of these barriers.
Also, an economic gardening program is not a quick fix. According to Gibbons, "It is important for cities to understand that economic gardening is not a quick answer to a plant shutting down. It is not a fad diet, it is a lifestyle change. You cannot expect silver bullet solutions to sudden economic woes. Economic gardening takes time to put into place and time to reach a critical mass of growing companies."