Emporia Area Chamber of Commerce and Convention & Visitors Bureau
May 2014
17
RDA Happenings
Economic Development 101
This past month I spoke at a club meeting on the topic of “The Art and Science of
Economic Development”. The fundamental reason for Economic Development in a
community or region is the creation of wealth and to diversify and growth of the economy.
This objective can be achieved with retention, expansion and recruitment of our Basic
Industries as opposed to our Non-Basic industries.
The definition of Basic Industries are those businesses where the vast majority of their
Kent Heermann goods or services are provided for sale outside the local market area. Non-basic industries/
President, Regional
Development Association
of East Central Kansas
REGIONAL DEVELOPMENT ASSOC. of EAST CENTRAL KANSAS
The Regional Development
Association of East Central
Kansas (RDA) is the lead
economic development
organization for Lyon
County and the Emporia
area. The four members
of the RDA are the
Emporia Area Chamber
of Commerce, Emporia
Enterprises, the City
of Emporia, and Lyon
County. The RDA is located
with the Emporia Area
Chamber of Commerce
and the Convention and
Visitors Bureau at the
Trusler Business Center,
719 Commercial, Emporia,
KS 66801. Kent Heerman
RDA President, can be
contacted at 620-342-1600
ext. 16, or heermann@
emporiakschamber.org.
businesses have the majority of their sales inside the local market area. An example of a
basic industry is a pet food plant, which the majority is sold outside of the local market area.
Non-Basic industry is a grocery store where the vast majority of the goods and services are
purchased locally.
If the community or local economic development corporation assists the local Basic
Industries businesses in their growth plan by increasing the sales it will in turn create more
jobs which brings new revenue into the local economy, such as payrolls, goods and services
purchased locally. This generates economic activity with new dollars into the community.
Manufacturing businesses in most cases require a higher skill level than certain lower
skilled and thus lower paid jobs.
A local community may adopt performance-based incentives to encourage the location of
those new jobs into their local community or region.
Emporia and Lyon County have adopted minimum salary and investment thresholds
for performance-based incentives. The reasons for thresholds are first, encourage beyond
normal business growth and not be an entitlement program. Secondly, business growth is
encouraged with job creation but it is counterproductive to reward those companies for jobs
with salaries below the average salary for the community.
Next the community needs to evaluate the return of investment for the community vs. the
total performance-based incentives.
The key to any incentive is a performance time of mutually agreed upon investments, job
creation numbers and average annual salary are met or exceeded If those are not met then
“claw back” provisions should be enacted.
So in essence Economic Development is keeping what you have, grow what you have
and find new ones to grow and diversify the local economy.