In my Community (Economic) Development course, students are often confused by the differences between economic growth, local economic development, and community economic development. Because these terms help to explain similar process of development, they can seem like the same thing. As with most things, these terms are in flux and scholars often disagree about the definitions, adding to the confusion. Understanding the differences between these terms helps us analyze the impact of various economic development plans on residents and the environment.
Early definitions of economic development focus on growth as the standard. According to Malizia & Feser, and Wolman & Spitzley, we can understand growth as an increase to outputs (per capita income, jobs, a country’s gross domestic product, et cetera). This form of economic development focuses on increasing national wealth through improvements to the local business climate. Some examples of this approach include tax subsidies to keep or attract businesses to a certain locale. The idea is that a friendly business climate will lead to more jobs, increase competition, attract more businesses, and in turn yield greater wealth for the area. Some examples include the Boeing deal in Chicago, and the more recent Carrier deal in Indiana.