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How municipal governments can drive local economic development.

Local economies are hanging in the balance, how can municipal governments help drive economic growth in local economies?

Introduction

Today’s economic climate is changing more than ever. Thanks to the COVID-19 pandemic, many businesses are adopting a hybrid office model which sees employees staying home for a portion of their week. While this may be good for the employees, local businesses are suffering without their weekday lunch crowds and afternoon commuters. Municipal governments play a critical role in driving local economic development. By creating an environment that is conducive to business growth, municipalities can help local businesses thrive and create jobs. Here are three ways that municipal governments can promote economic development:

1. Encourage entrepreneurship

One of the best ways to promote economic development is to encourage entrepreneurship. New businesses help encourage economic growth in a few different ways. First, they bring new ideas and innovation to the local economy. Think about Uber and Airbnb. They were both industry disrupters who revolutionized local economies all over the world by introducing innovative new ways to receive current services. That opened the door for people in local communities to earn extra income with their vehicles and earn passive income by renting their properties as vacation rentals, both of which helped drive local economies. Second, they create jobs and encourage local spending. With new businesses come new job opportunities at all sorts of levels. This gives people in the community the chance to work close to home and grow into different positions as the new company grows. Not only do they create new jobs, but they also encourage local spending. If members of a local community can get the services and items, they need without having to leave their city, they likely will. This increases local spending and helps stimulate the local economy. Finally, they help to diversify the local economy. This helps more people be able to access the services they need in the comfort of their own communities. This encourages people of the community to seek out services they need within their community, helping stimulate the local economy. Municipal governments can do a few things to encourage entrepreneurship. They can provide financial assistance, offer mentorships or networking opportunities, and create an easy process for starting a business. No matter what they do, they should consider always having some form of support for entrepreneurship to encourage local economic growth.

2. Create a business-friendly environment

To create local jobs and drive local spending, municipal governments need to create a business-friendly environment. This means making it easy for businesses to start-up, grow, and succeed. One way to do this is by reducing the amount of red tape businesses have to go through to start conducting business. This could mean streamlining the permit process, offering tax breaks, or waiving certain fees. Municipal governments can also create an environment that is conducive to innovation. This could mean creating an incubation space for new businesses to grow or establishing a local accelerator program. Another way to create a business-friendly environment is by promoting local industry clustering. This involves supporting local businesses that are in the same industry to encourage collaboration and innovation. For example, if there is a local fashion hub, municipal governments could offer tax breaks to local designers or help to connect them with local manufacturers. This will help local businesses to grow and establish themselves in the local economy. Finally, local governments can encourage local businesses to export their products and services. This could involve establishing trade missions to other cities or countries, or helping local businesses to establish relationships with buyers abroad. By doing this, local governments can help local businesses to grow and become more competitive on a global scale.

3. Create jobs

Municipal governments can also create jobs to stimulate the local economy. This could involve supporting local businesses to grow, encouraging entrepreneurship, or establishing local incubation spaces. Another way to create jobs is by attracting new businesses to the area. This could mean setting up a business attraction program that offers incentives such as tax breaks or reduced fees. Municipal governments can also work with local educational institutions to create programs that will train people for jobs that are available in their community. This will help keep skilled workers in the community which not only encourages income within the community but also encourages local spending.

Conclusion

Municipal governments are a powerful force when it comes to local economic development. By creating a business-friendly environment, creating jobs, and encouraging entrepreneurship, they can help to stimulate the local economy. By implementing any of these strategies, local governments can help local businesses to grow and establish themselves in the community. This will create a strong local economy and encourage economic growth within the local economy for years to come. MuniLogic is dedicated to helping local governments make their communities a better place. Our services are focused on helping local governments achieve their goals through digital transformation and professional consultation.

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