Three Waves of Local Economic Development

During the first wave the focus was on the attraction of:

• mobile manufacturing investment, attracting outside investment, especially the attraction of foreign direct investment

• hard infrastructure investments

To achieve this cities used:

• massive grants

• subsidized loans usually aimed at inward investing manufacturers

• tax breaks

• subsidized hard infrastructure investment

• expensive "low road" industrial recruitment techniques

During the second wave the focus moved towards:

• the retention and growing of existing local businesses

• still with an emphasis on inward investment attraction, but usually this was becoming more targeted to specific sectors or from certain geographic areas

To achieve this cities provided:

• direct payments to individual businesses

• business incubators/workspace

• advice and training for small- and medium-sized firms

• technical support

• business start-up support

• some hard and soft infrastructure investment

The focus then shifted from individual direct firm financial transfers to making the entire business environment more conducive to business.

During this third (and current) wave of LED, more focus is placed on:

• soft infrastructure investments

• public/private partnerships

• networking and the leveraging of private sector investments for the public good

• highly targeted inward investment attraction to add to the competitive advantages of local areas

To achieve this cities are:

• developing a holistic strategy aimed at growing local firms

• providing a competitive local investment climate

• supporting and encouraging networking and collaboration

• encouraging the development of business clusters

• encouraging workforce development and education

• closely targeting inward investment to support cluster growth

• supporting quality of life improvements