Business Retention and Expansion’s greatest asset is also its greatest weakness. It has traditionally followed a process of assisting local businesses through personal service from economic development professionals (EDpros). The personal touch of Business Retention and Expansion (BRE) coming from the direct meetings and assistance provided by EDpros is one of the elements that makes it so successful. However, the reliance on direct personal service limits BRE’s ability to scale to serve large numbers of local businesses because it is physically and fiscally impossible to scale the number of hours EDpros can work or the number of EDpros that work on BRE.
This is not the fault of the Economic Development Organization (EDO) or the BRE professional. Instead, it is a practical reality of a limited supply of hours economic developers can work, massive demand of hundreds or thousands of businesses that can benefit from BRE assistance, and a restricted supply of (typically government-funded) dollars budgeted for BRE. Also, there have been few alternative ways that EDOs could scale their BRE programs with these constraints.
The International Economic Development Council (IEDC) explains that “A business retention program is time and labor intensive.” Even a leading EDO like GreaterMSP, whose staff served 300 businesses in one year through its BRE program, still only reached 0.25% of the total 121,000 businesses in the 16 county metro area it serves. Again, this is not GreaterMSP’s fault, as they are exceedingly efficient. It’s simply that the demand is impossible to supply with human resources.
Perhaps recognizing this systemic limitation, BRE experts from Executive Pulse recommend a Darwinian “survival of the fittest” model to focus on the most valuable companies and not try to serve all companies in an industry, and IEDC addresses this challenge too, suggesting EDOs “should begin by creating a database of existing businesses, and determining the kinds of businesses toward which it will target its efforts.”
The existing BRE approach is narrow in focus, based on limited resources and viable options. However, it is also unbalanced, because equal service is not available to all local businesses. The current model for BRE is to pick the winners and most likely winners (based on their likelihood to succeed, innovate, grow) and work only with these companies. It excludes the vast majority of total businesses including many that also desperately need assistance.
Business assistance requires a diversity of service delivery options to reach the different needs of all businesses within the budgets of economic development organizations.
Historically, fewer businesses could be served with staff-intensive/individualized services or more businesses could be served through generalized assistance. However, what is changing these traditional limitations of human and financial resources is the introduction of computer-powered services delivered through the Internet.
Other economic development practices such as business attraction, foreign direct investment, marketing, and research have all added digital services as a way to scale services and leverage the power of the Internet to expand their services and increase their effectiveness. Digital economic development services enable economic developers to 1) Use computing to provide unlimited service to customers, 2) Customize service to the needs of the customer, 3) Access information not possible for their individual EDO to research on its own and 4) Provide 24/7 services. For example:
- Business Attraction – The majority of US states, largest 100 cities, and all of Canada provide GIS Planning’s online site selection analysis software to help businesses identify the optimal location to startup, expand, or relocate. The adoption of this industry-changing technology transformed the practice of site selection assistance by EDOs.
- Foreign Direct Investment – EDOs and Investment Promotion Agencies (IPAs) leverage real-time data tracking of cross-border greenfield investment (projects, capital, and jobs) covering all sectors and countries worldwide. This fDi intelligence software includes early warning signals a company may be considering a location investment.
- Marketing – EDOs use many online services for marketing activities. Some are general marketing including email distribution (VerticalResponse, Mail Chimp), websites (WordPress), and social media (Linkedin, Facebook, twitter, etc.), whereas others are specific to economic development marketing including Lead Gen ID, Place VR, and Location Advisor Database.
- Research – Economic development researchers have access to multiple online information sources they can subscribe to that provide valuable data they can share with staff, customers, and through their websites. These include services such as fDi Benchmark, WAVTEQ’s Incentives Monitor, and emsi labor data.
None of these online software services does the same work as economic development staff, nor are they a substitute for work that requires human thinking and interaction. Instead, they are additive to existing staff services and provide new ways of achieving economic development objectives not previously possible before these types of technology, data, computing, and automation were available. Also, it is worth noting that this trend is not unique to economic development because most industries are supplementing staff services with digital services.
In all professions, including economic development, hybrid services are becoming commonplace and expected.
BRE currently benefits from workflow optimization around CRM using technologies from Synchronist and Executive Pulse. These software services help the BRE professional enhance information management and expand staff productivity. This type of software is excellent as an internal resource for BRE pros, however it was never designed to provide expanded BRE services to the external audience of local business customers.
Fortunately, today, a new digital solution is available that empowers BRE professionals to significantly improve their local business assistance using online technology. The emergence of this technology is in line with the broader trends of taking economic development services digital. It also catches up professionals working in the BRE specialization with other ED specializations that have already enhanced their services by going digital with online services as previously described. BRE may be trailing in its embrace of digital, but it now has the ability to skip generations of experimentation, cost, and failure to instead take advantage of the very newest technologies.
The 1st place award from the US Department of Commerce for a business app that helps American businesses be more competitive, improve their success, foster prosperity, and create more jobs was awarded to SizeUp. It was selected as the winning solution by Vint Cerf, Chief Internet Evangelist at Google and “co-father of the Internet”; Sheryl Sandberg, COO at Facebook; Vivek Kundra, EVP, Salesforce.com; Tim O’Reilly, CEO of O’Reilly Media; John Bryson, US Secretary of Commerce; and Steven VanRoekel, US Federal CIO. This innovative BRE online software significantly increases the reach of business assistance services to local businesses through the EDO’s website by using SizeUp LBI.
EDOs across the country are quickly, easily, and affordably adding SizeUp LBI directly to their websites to provide online business assistance services to their local businesses 24 hours a day, 7 days a week. SizeUp uses millions of pieces of data providing businesses in your community with customized data for their unique businesses, in their specific industry, and in their exact location.
SizeUp LBI empowers local businesses to make smarter decisions through big data. It helps level the business playing field by providing small businesses similar business intelligence that was previously only available to huge corporations. In addition, entrepreneurs preparing to open a new business can also use SizeUp to create their business plan, perform market research, and analyze how realistic their projections and estimates are for a business similar to theirs.
BRE professionals that have been waiting to have their own online solution to expand their services to their local businesses can now participate in a professional movement that other specializations in economic development have been benefiting from for years.