Factors influencing local economic development : an analysis of the perceptions of community leaders

The purpose of this study was to ascertain and analyze the perceptions of community leaders regarding factors which influence local economic development. Factors given primary consideration in the study were transportation, labor, site considerations, utilities, government involvement and assistance, the presence of an economic development agency or board, and community factors. These factors are termed location factors due to the influence they exert on the location decision of industries. Eight counties in east Tennessee, which have experienced varying rates of economic growth, were selected as the study area to provide a broad sampling of local perceptions.

The primary method of data collection was a mail-out questionnaire which was sent to community leaders in both the private and the public sectors in the study area. Follow-up interviews were conducted to provide additional data regarding the perceptions of community leaders. A literature review provided the background data which was referenced in developing the questionnaire and in conducting the analysis of the survey results.

The findings of the study indicate that some of the traditional factors, particularly site considerations and utilities, are perceived to be less important in influencing local economic development than the non-traditional community factors. This is attributed to what was identified by the survey participants as the increasing parity among site considerations and utilities in all communities. Those factors which can vary greatly from community to community and over which the communities can exert some control, labor, community factors, and to some extent transportation, were perceived to be most important in influencing local economic development. Government involvement and assistance and the presence of an economic development agency or board were perceived as being important on the front end of the industrial location process. The responsibility of the government and the local development agency was identified as consisting of the provision of information and assistance to prospective industries and businesses.

A number of factors determine the success of local economic development efforts. In order to design successful economic development strategies, planners and policy-makers must be aware of the factors and the roles they play. The seven factors identified in this study play important roles in the local economic development process and should be addressed in all economic development strategies. Efforts should be undertaken to improve the local labor force and community factors which, according to the survey results, are the most important factors influencing local economic development. An economic development program which addresses the seven factors and includes representation of both the private and public sectors should enjoy success and lead to the overall improvement of the community.