We know what it’s like. You’re in a meeting or you’re reading EconDev Today, and you hear a term or stumble upon an acronym that you’re unfamiliar with. On this page, you’ll find definitions for many economic development terms and concepts that you might like to know more about to succeed in the field.
If there’s a word we’re missing below that you’d like us to include just let us know. We’ll continue to add relevant vocabulary to the glossary to serve the EconDev profession.
Acre refers to a measurement of land area. One acre equals 43,560 square feet. There are 640 acres in one square mile.
Assessment – is the estimate of a property’s market value. The estimate is often based on an objective, professional review of:
- comparable sales of similar properties in the vicinity
- the cost or replacement value of the property, or
- the income the property generates
Backhaul – refers to the return trip a truck makes after transporting its original cargo from point A to point B. Economic developers and logistics experts consider the backhaul to provide insight into a region’s competitive advantage as a center for manufacturing or distribution.
Base Load – The minimum load of electric power.
Basic Employment refers to jobs that are created among employers where at least 51% of the employer’s revenues are derived from the sales of goods and services outside of the service area. This is an important concept in economic development because when revenue generated by basic employers is directed to pay wages or salaries to local workers, or to pay for services and supplies sourced locally, then it serves to create a mulitplier effect, generating additional spinoff employment in the area.
Basic Industry – also known as Primary Industry or Basic Manufacturing is a company or group of companies that sell or export a majority of their products or services outside a geographic area thereby “importing” new dollars into the local economy and subsequently contributing to the wealth of the community.
Blanket Mortgage – A single mortgage covering more than one piece of property.
Bond – A binding agreement or promise to pay.
Bonded Warehouse – is a facility in a secured area such as a designated Foreign Trade Zone where businesses may store, modify, assemble, repackage their products to delay payment of duties until the goods are release released from the warehouse.
Business Attraction is the practice of recruiting businesses and industries from outside a state, region, or community to convince those companies to make location decisions resulting in new jobs and new capital investment in their jurisdiction. See also Foreign Direct Investment (FDI).
Business Retention and Expansion (BRE) is about engaging existing business and industries in a given service area, serving and supporting those businesses, and managing expansion projects that arise from such efforts.
Business Retention and Expansion (BRE) Survey is a tool used in a BRE program to:
- Engage existing businesses and create an open dialoge with local, regional, state and federal officials.
- Collect information about existing businesses in a community.
- Identify business needs, challenges, problems and concerns that impede or threaten local business growth.
- Develop strategies and action plans that support the continuous improvement of the business community.
Business Incubator – a facility that is established to serve the needs of a community’s entrepreneurs and emerging small businesses by providing shared services and low cost or reduced rent for a designated period of time – usually one to three years.
Business License – grants the owner the right or the priviledge to start and operate a business.
Business Intelligence is about gathering, analyzing, summarizing, and communicating business, demographic, and economic information within a certain geographic service area for economic development purposes. Business Intelligence often supports business development and economic development marketing activities with relevant research and insightful analysis.
Business Improvement District (BID) is a designated geographic area where property owners have agreed to pay a supplementary tax to generate revenues to pay for costs associated with special programs or projects in the district. See also Community Improvement District (CID).
Capital Gain – Profit from the sale of capital investment such as real property, stocks, bonds, etc.
Certified Economic Developer (CEcD). A designation earned by economic development professionals who have have passed examinations and have met other qualifications required by the International Economic Development Council (IEDC).
Cleanroom – sometimes referred to as “clean room” – is space in manufacturing or computer hardware production, laboratory, biotechnology and research facilities that is designed to create a sterilized environment to reduce the risk of damage or reduced performance caused by nanoparticles and microorganisms.
Collateral – Assets pledged as security for a loan.
Combined Statistical Area (CSA) – Where two or more Core Based Statistical Areas have substantial employment interchange.
Community Development Block Grant (CDBG) – is a longstanding federal program administered by the Department of Housing and Community Development (HUD) providing annual grants on a formula basis to local and state governments. The CDBG program is designed to support community development in low to moderate income communities to ensure affordable housing and job creation through business retention and expansion.
Comprehensive Plan – a land use and growth management plan that is adopted by a local or regional body. The creation of a comprehensive plan usually follows a public process of engaging members of the community for their input especially in anticipation of future growth and development. The comprehensive plan provides a vision for the future, serves as a guideline for managing growth, and is the basis for land use regulations.
Economic Development – is about creating wealth in a community through the continuous improvement, management, and promotion of a region’s natural, physical, intellectual, and capital resources. It is essentially about creating jobs and attracting new capital investment while raising the overall standard of living for those who live or work in the community.
Fiscal Impact Analysis – an effort to assess (or estimate) the overall net financial impact due to direct and indirect costs, as well as the revenues received, by a jurisdiction resulting from a major change in land use such as housing development, a new manufacturing operation, expansion of existing business, or closure of an established business or institution.
Foreign Direct Investment (FDI) – is an investment made (usually new capital investment or an investment in the form of a controlling interest) by a company or an individual based in another country.
Geographic Information System (GIS) –
Industrial Park – a large tract of land that is planned and developed for purposes of serving the site and infrastructure needs of manufacturers. An industrial park is usually subdivided into parcels and zoned for manufacturing. See also Shovel Ready Sites.
Key Performance Indicator (KPI) is a metric used to measure the performance of a certain marketing activity, campaign, or event such as Cost Per Click (CPC), Click Through Rate (CTR), or Downloads.
NIMBY – Not-In-My-Back-Yard. This term is often used to reflect the attitude of citizens who are opposed to changes in zoning, land use, special use permits, or the siting of an unwanted facility especially when there are actual or perceived risks to public health, safety, or general welfare.
New Markets Tax Credits (NMTC) – is a program designed to attract private capital from individuals and corporate investors who receive tax credits against their federal income tax in exchange for making equity investments in Community Development Entities (CDEs) in order to encourage business and real estate investment in low-income communities.
Manufacturing – is the process of taking raw materials and adding value through the production of goods by machine or by hand that the business can sell to a customer.
Metropolitan Statistical Area (MSA) – is a geographical area with high population density at its core and substantial economic and social ties among its neighboring communities.
Shovel Ready Sites – often refers to large commercial or industrial tracts of land that have been thoroughly and professionally reviewed as part of the due diligence necessary to satisfy a convenient and efficient sale or transfer of real property.
Site Selection – is the process companies to go through to intentionally evaluate multiple business locations to identify the best location for making an investment. The site selection process often includes evaluating both fixed costs and variable costs associated with the most viable locations under consideration. Large companies planning to make multi-million dollar investments or create hundreds of new jobs often gather input from several internal divisions – such as human resources, operations, logistics, and finance – in order to assess key factors and associated risks that impact both the short-term and long-term success of the business.
Site Selection Consultant – One who provides site selection services to companies that need help identifying the best possible location for their business. Companies planning major – highly confidential – projects will often seek the services of professional site selection consultants. Site selection consultants are often tasked with:
- Identifying the most viable locations for further consideration and assessment.
- Performing timely assessments of workforce, logistics, utilities, infrastructure, finance, and other factors among locations under consideration.
- Conducting due diligence.
- Providing a detailed report on the finalist locations assessed.
- Recommending the best location for future investment based on the assessment of the location criteria.
- Negotiating incentives on behalf of their client company that lead to a final location decision.
Special Service District (SSD) is a legally designated area where property owners of local businesses in the defined area plan and establish a sustainable funding source to pay for services to improve their area. See also Business Improvement District (BID).
Small Business Innovation Research (SBIR) Program – administered by the Small Business Administration (SBA) the Small Business Innovation Research program is designed to encourage domestic small businesses to participate in Federal Research and Development (R&D) for the purposes of commercialization.
Sole Proprietorship – is a business owned and managed by an individual.
Stock Keeping Unit (SKU) – is a unique code to identify several characteristics about each product such as cost, date of purchase, color, flavor, size, vendor, supplier, etc.
SWOT Analysis – is an assessment of a community’s strengths, weaknesses, opportunities, and threats and comparing each factor against its main competitors. A SWOT analysis is usually performed in the early stages of a community’s strategic planning process. Conducting a SWOT analysis enables the community’s leadership to better understand its unique competitive advantage to creatively position the community for success.
Target Sector – refers to the type of or classification of a group of services, businesses, or industries that an economic development organization strategically intends to market to.
Unique Selling Proposition (USP) – is the one thing that differentiates your business or your community from all others and gives it a distinct competitive advantage.
Workforce Development – refers to education and training programs designed to prepare people with the knowledge, skills, talents, and abilities to effectively support the current and future human resource requirements of business and industry.