Copyright

What is Economic Development? - Definition & Examples

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: How Investing in Education Impacts Earning Potential

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:00 What Is Economic Development?
  • 2:14 Examples of Economic…
  • 3:40 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Create an account to start this course today
Try it free for 5 days!
Create An Account

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Aaron Hill

Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

Learn what economic development is and why you may play a part in it every time you purchase something at the store. Find out who sponsors economic development and some of the most common categories and examples of economic development.

What Is Economic Development?

You most likely help fund economic development every time you purchase something at the store and pay local or state sales tax. That cup of coffee, those new shoes you bought, or the real estate taxes you may pay, all usually have a percentage of the sales going towards economic development projects or initiatives.

In general, economic development is usually the focus of federal, state, and local governments to improve our standard of living through the creation of jobs, the support of innovation and new ideas, the creation of higher wealth, and the creation of an overall better quality of life. Economic development is often defined by others based on what it is trying to accomplish. Many times these objectives include building or improving infrastructure such as roads, bridges, etc.; improving our education system through new schools; enhancing our public safety through fire and police service; or incentivizing new businesses to open a location in a community.

Economic development often is categorized into the following three major areas:

  1. Governments working on big economic objectives such as creating jobs or growing an economy. These initiatives can be accomplished through written laws, industries' regulations, and tax incentives or collections.
  2. Programs that provide infrastructure and services such as bigger highways, community parks, new school programs and facilities, public libraries or swimming pools, new hospitals, and crime prevention initiatives.
  3. Job creation and business retention through workforce development programs to help people get the needed skills and education they need. This also includes small business development programs that are geared to help entrepreneurs get financing or network with other small businesses.

How do we know if economic development is working? There are hundreds of ways to measure things for the hundreds of different economic development objectives that communities may have. We can measure many of the above things through improvements in average income of families, local unemployment rates, standardized testing and literacy results in children, leisure time and changes in life expectancy, or hospital stays.

Examples of Economic Development

Tax Incentives for New Businesses

Your local community or state may provide incentives on lower real estate taxes or income tax rates for opening a new business that creates at least five jobs in the community. The lost revenue in taxes for the local government will most likely be made up by the generation of new jobs which creates more spending and sales for all the other businesses and enhances the prosperity of the community as a whole. These increased sales from other businesses result in more overall tax collection.

To unlock this lesson you must be a Study.com Member.
Create your account

Register for a free trial

Are you a student or a teacher?
I am a teacher

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back

Earning College Credit

Did you know… We have over 95 college courses that prepare you to earn credit by exam that is accepted by over 2,000 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it free for 5 days!
Create An Account
Support