What is Asset-Based Economic Development?
Asset-based economic development is a bottom-up approach to developing a region or area by building upon existing local resources. Through this it strengthens local and regional economies, yielding more opportunity and helping the area grow.
Asset-based economic development starts with focusing on a community’s natural environment, socio-cultural, and economic advantages and how these can be leveraged into sustained economic growth and productivity. Beyond that, it aims to build capacity in communities and strengthen connections within regions.
For asset-based economic development to be successful, it needs:
- Strong leadership at both the local and regional levels
- Innovation, collaboration, and rethinking traditional economic development paradigms
- Sources of financing
Asset-Based Economic Development vs. Needs-Based Development
Asset-based economic development differs from more traditional needs-based economic development, which is focused on identifying gaps and deficiencies in the local economy and attracting new investment or industries to fill those gaps. Needs-based economic development can be more subjective to the boom-and-bust cycle or to changes in the state or federal policy environment.
When pursuing asset-based economic development, it’s important for communities to both identify assets, and to evaluate them and their potential benefit to the local economy.
When evaluating assets, communities should look at:
- How they can be leveraged into economic development
- What the value of developing on a particular resource will be
- Who the development of a particular asset will benefit
- What additional inputs will be needed to fully leverage the asset
Asset-based economic development is a strategy for sustainable economic growth. It builds upon the community’s existing assets, making it a strategy for long-term, sustained economic growth and development. Because asset-based economic development builds on local assets, the return on investment is local.
Industry and Industry Clusters
Clusters of existing or emerging industries (or geographic concentrations of interconnected companies and related supporting institutions) can result in a competitive advantage for a region. The clustering of industries can reduce costs for firms through workforce availability and a specialized infrastructure that develops to meet the needs of the industry cluster.
Companies within an industry cluster both compete with one another and collaborate, fostering innovation. Clustering of industry also leads the development of supporting associations and institutions, such as trade associations and job training programs at local universities and colleges.
Southwest Florida Economic Development Alliance (SWFLEDA) recently completed its first Industry Cluster Study, taking a deep dive into 11 of the key industries driving the region’s economy. Utilizing this information, we can answer and market those assets that have allowed these industries to thrive in Southwest Florida.
Human capital is composed of the knowledge and skills local workers possess. These two assets are important for a community to consider. Higher levels of human capital not only contribute to individual economic success, but also to local economic vitality.
Regions with more human capital tend to:
- Have more economic activity
- See more rapid economic growth
- Have more productive workers
- Pay their workers more
Investing in human capital can also help build important connections between rural and urban residents, businesses, and institutions and the surrounding regional networks. Human capital at this larger, regional scale is linked to both economic vitality and long-term economic success.
Southwest Florida’s Efforts to Build Human Capital
In Southwest Florida, SWFLEDA is a proud FutureMaker Champion addressing educational attainment to ensure a skilled workforce. There are multiple efforts across the region to build human capital including new partnerships with Western Michigan University/Florida SouthWestern State College, Hodges University, Glades Regional Training Center, and a new effort for a Collier County Center for Manufacturing Excellence – just to name a few.
Entrepreneurship is another strength and focus area in building human capital. You will find numerous accelerators, incubators, and shared working spaces peppered throughout Southwest Florida. The Rocket Lounge, featured here, is building a tech startup ecosystem in the region.
The importance of building partnerships and working collaboratively on economic development initiatives across the region cannot be overstated. These partnerships can be between local governments and community or economic development organizations, between multiple local governments, or between community groups.
Partnerships can be critical in leveraging resources, building stakeholder support, and in turning a great idea or existing community asset into a successful, long-term economic development strategy. Not only are the people in our community one if its greatest assets, engaging them in developing an economic strategy can create greater buy-in and lead to greater success in implementation.
Contact us to learn more about how you can help SWFLEDA make Southwest Florida great and engage in our region’s long-term economic prosperity!