Community Economic Development and Community Change (Theory of Change…
Community Economic Development and Community Change
Theory of Change
Sequence of Actions
Conversely, another common approach
is to use community resources to improve the commercial district with
the aim of stimulating business development.
successful business development
can stimulate community development if local business owners use some
increased profit to help improve and maintain their storefronts and make other
improvements in the commercial district.25
Long Term Outcomes
and reinvestment in the community
reintegration of the neighborhood into the market system.”
2) community groups will be
able to put the additional resources to effective use.
(1) outside groups will view the
neighborhood in a positive light, want to do business or projects in the community,
or provide resources to the community; and (
intermediate outcomes on the community development
in the reputation of local groups and the community in general among
Enhanced organizational capacity,
more residents and nonresidents might come
into the commercial area to work or shop.
The main interim economic outcomes relate to increases in consumer demand.
Economic Development Inputs
Incentive programs to retain
Incentive programs to attract
Employment linkage programs
CCI-sponsored business ventures
Small business incubators
Business promotion efforts
Commercial real estate development
Community Building Inputs
Human resources development
Increased networking and
Resident participation in economic
Community Development Inputs
Improved safety and security
Community Development Outcomes
Improved civic pride
Improved reputation of community
organizations among outsiders
Improved organizational capacity
and local leadership
More use of commercial district
Improved quality of space
Economic Development Outcomes
• Growth in the size of the local entrepreneurial class
Improvements in the price, quality, or mix of goods and services that are
available locally to community residents
Increased entree into the economic mainstream for some residents
• Increased employment opportunities for residents
An increase in the number of healthy businesses owned by local residents
• An increase in the number of healthy businesses (as measured by
increased sales, increased number of new and repeat customers,
and increased income)
• Improvements in the general business climate
Increased community access to sources of capital
Increased asset accumulation
Workforce development and job brokering strategies to prepare local
residents for jobs in or outside the community
businesses into the community from the outside, or creating employment
opportunities for local residents
promoting local entrepreneurship,
Targeted economic development projects aimed at developing and
expanding local businesses,
connect local residents or organizations to outside networks
or institutions important to the process
Efforts to organize community groups around economic development
projects or to
Projects to improve a neighborhood’s physical appearance or the safety of
its commercial or residential areas
Efforts to promote asset accumulation and access to capital among community
Aspen Roundtable measurement website (www.aspenmeasures.org) for information
on the community economic development measures and data sources
traditional economic development
retaining existing businesses that could expand their markets and improve production
and reduce costs by relocating
attracting established businesses into the area;
it might be important to negotiate hiring agreements as part of the
offering tax credits or other business incentives
on a project by project basis;
the availability of incentives is rated quite low on
a scale of factors that influence decisions about where to locate a business.
or designating the neighborhood as part of
an economic zone that offers special tax breaks or other incentives to outside
businesses that locate inside the zone.
the weight of the evidence is “not encouraging” about the potential
of state-sponsored enterprise zone programs to increase employment
not provide opportunities to prepare residents for employment.
offered investment credits that were not
linked to the types of jobs that local residents were likely to qualify for,
they failed to offer sufficient
incentives for hiring local residents;
attract a major retail chain store as an anchor store
in the revitalized shopping district;
125 More recently, attention is being paid to super markets,
big retail stores, back-office operations, and service-oriented businesses
in tourism and entertainment, health care, technology, or insurance
traditionally focused on attracting manufacturing
firms to a locality.
in more jobs and income than the community could generate internally by
developing new small businesses.
aiding the creation or expansion of small businesses
in the neighborhood;
CDCs and CBOs can use federal grants awarded through the Job
Opportunities for Low-Income Individuals (JOLI) program to provide technical
and financial assistance to develop self-employment ventures and other
business opportunities for low-income individuals.
Community oriented businesses
important that these activities
be regarded and treated as economic enterprises and not just as service delivery
sources of employment for low-skilled, entry-level workers,
especially when they are linked to locally based training and hiring efforts
Types of businesses
and businesses that contribute to environmental improvements,
such as lead reduction and asbestos removal.
services related to housing construction, rehabilitation,
home health care for the elderly or disabled;
not only become viable economic enterprises
but also provide products and services that are useful to the community and
that build other community assets
scholarly opinion remains quite divided
about whether small business development can be a major tool for inner-city
economic development and job creation
access to networks
need access to management talent
need access to capital
ensure that the benefits of economic development
accrue to the community and its residents rather than to external developers
Workforce development strategies
local organization or organizations work simultaneously with a number
of firms in the same economic sector in order to develop employer networks, set
industry-wide training standards, and create client-focused and career-directed
employment opportunities for community residents.
change the efficiency, institutional practices, and training routines of employers
combines supply and demand side interventions
• Strategies to link citywide economic development with employment opportunities for local residents
First Source hiring agreement ordinances
for noncompliance are important in getting employers to take the requirements
community organizations are actively involved in recruiting,
training, screening, and referring qualified community residents
offering business incentives in exchange for specific guarantees
about hiring community residents and following up with efforts to ensure that
the businesses are supplied with a steady flow of job applicants
assisting business development directly
improving the general business climate, including physical infrastructure improvements
Community festivals can be another way to strengthen community
ties, promote local businesses, and entice nonresidents to a community.
Organizing local merchants or business owners to work together is
another strategy that can produce improvements in the local business environment.
rehabilitation and construction can also provide employment opportunities for
help make travel in and out of the commercial area more attractive,
safer, and easier for both residents and nonresidents.
This can increase the
number of people who come into the area to shop or work,
It has also been argued that
increased foot traffic in a commercial area can by itself contribute to less crime
and a sense of progress, which increases community pride and encourages investment.
it easier for local businesses to find employees.
consumer markets, increasing the level of aggregate business activity,
increased willingness on the part of outside groups to fund projects and invest
money and other resources in the local community.
and encouraging more residents and nonresidents to shop in neighborhood
stores and patronize neighborhood businesses
providing additional space for businesses, merchants, and restaurants,
Better lighting and streetscaping also help.
improving the appearance of the streets by increasing trash collection, removing
graffiti or turning it into a tourist attraction (as has been done in Harlem).
upgrading building facades and improving window dressing;
developing commercial real estate to make the building stock more usable and
help promote business
development and business investment as well as improve the appearance of the
increase asset accumulation and access to capital
targeted lending programs that offer special funding
arrangements, counseling, and other supports for low-income individuals who
want to buy a home, start a business, or become self-employed
Individual Development Accounts
provision of support services is critical, and some
participants will require fairly intensive case management
promotes asset accumulation among low-income households by providing opportunities and incentives for opening personal savings accounts.
alternative neighborhood financing and
Community Development Banks
Comunity Credit Unions
some questions have been raised about the growth and overall financial
stability of some community credit unions
developed products and processes that can be used by conventional institutions that are struggling to meet their CRA obligations
Monitoring CRA compliance and exerting pressure on commercial banks
low-income residents continue to face structural barriers,
and complex paperwork
high service fees,
such as minimum deposit requirements,
Others focus on attracting
outside investments and metropolitan businesses to the local economy.
and providing technical
support and assistance to firms and businesses.
reducing barriers to credit,
Increasing the access,
participation, and ownership of community residents in the economic activities
of the locality
as are altering the mix of businesses in the community so residents can have
greater access to basic consumer goods and services.
and ensuring that local residents are hired are also common objectives,
Increasing the quantity and quality of jobs available in the neighborhood
stimulating local job creation and aggregate business
focuses on economic development in a specific
neighborhood, but also that it focuses on the process of community building
the community is treated as both an input and an output in community economic development.
the field looks for outcomes relating to community building and community development in addition to economic outcomes.
contribute to sustained economic development (and vice versa).
community will play an active
role in the economic development process and gain access, participation,
and ownership of the economic activities in the locality.4
the broad economic trends and governmental policies that were instrumental in creating the conditions that led to isolated neighborhoods
of persistent poverty continue
the local neighborhood is not a self-contained economic unit, but part of larger markets and higher levels of economic activity and decision making.