5 Powerful Strategies That Can Help Cities Grow and Attract New Businesses (with a Bonus tip)

Overview

Having worked with many economic development teams and our co-founder Jessica Rawlley sitting on the boards for Economic Development for the City of Vaughan and the Town of Newmarket, we have a deep and intimate understanding of the important role these teams play in driving growth to a city. Helping our customers has always been important to us and to assist our customers in this sector, we’ve supported them by providing them with the tools and resources to help support their goals in areas like business engagement, data management and promoting their programs.  

By working more efficiently, economic development teams can focus on other key factors to support the growth of their city, such as encouraging entrepreneurship so it can lead to increased tax revenue or improving the well-being of local residents by creating new jobs and services.

We wanted to share some ideas and strategies we have seen firsthand or have seen cities implement that have helped them meet their goals and grow.

Strategy #1: Attract New Businesses to the City

Attracting new business is one of the most important factors for growth within a city and requires a strategic approach that leverages the city’s unique advantages and strengths. With new businesses, new jobs can be created for local residents. This can also help increase tourism because of new amenities like restaurants visitors may want to experience.

Here are some ways a city can attract new businesses:

• Develop a Strong Value Proposition
  A clear value proposition can be developed that highlights unique advantages and strengths, such as its location, transportation links, skilled workforce, quality of life, and business-friendly policies.
• Create a Business-friendly Environment
  Streamlining regulations, reducing red tape, and offering incentives to new businesses, such as tax breaks or low-interest loans, can attract more business to a city, creating a more business-friendly environment.
• Support Entrepreneurship
  Cities can support entrepreneurship by providing resources such as incubators, mentorship programs, and access to funding for small businesses and startups.
• Invest in Infrastructure
  Infrastructure investments, such as transportation, communication, and energy systems, can attract new businesses and support economic growth.
• Foster Partnerships
  By fostering partnerships with universities, research institutions, or private sector organizations, it can develop innovative solutions for business challenges and attract new businesses to the city.
• Promote the City
  Cities should actively promote themselves as attractive business destinations, using marketing campaigns, events, and public relations to showcase their strengths and unique features.
• Develop a Talented Workforce
  Investing in education and workforce development programs can help develop a talented and skilled workforce that can meet the needs of new and existing businesses.
• Offer Quality of Life Amenities: 
  Cities can attract new businesses by offering quality-of-life amenities, such as cultural institutions, recreational opportunities, and public parks, which can enhance the quality of life for residents and make the city more attractive to visitors.

Strategy #2: Create a Business-friendly Environment

Creating a business-friendly environment requires a combination of policies and practices that make it easier for businesses to operate, innovate, and grow. Here are some ways to create a business-friendly environment:

• Streamline Regulations
  Simplifying regulations and reducing bureaucracy can make it easier and less expensive for businesses. This can include reducing permit and licensing requirements and providing clear and concise guidance on compliance requirements.
• Offer Tax Incentives
  Tax incentives can be a great way to attract new businesses and support existing ones. Tax incentives can include tax breaks for new investments, research and development tax credits, and reduced tax rates for specific industries or regions.
• Develop Infrastructure
  Providing a strong infrastructure for transportation, communication, and energy systems, can make it easier for businesses to operate and connect with customers, suppliers and to help these businesses attract talent.
• Support Small Businesses 
  Small businesses are an important part of the economy, and creating a business-friendly environment means providing them with access to resources such as training, funding, and technical assistance.
• Encourage Innovation
  Fostering innovation by creating policies to promote research and development, protecting intellectual property, and funding innovation and entrepreneurship can be a great way to create a business-friendly environment.
• Develop a Skilled Workforce
  Providing education and training programs to develop a skilled workforce can make it easier for businesses to find the talent they need to grow and compete.
• Engage with the Business Community
  Engaging with the business community can help cities better understand their needs and challenges so they can improve the services or support they offer. This can include setting up advisory boards or other mechanisms for dialogue and collaboration.

Strategy #3: Encourage Innovation

Strategy #4: Provide Support to Small Businesses & Entrepreneurs

Incubators, mentorship programs, and access to funding for small businesses and startups can help support entrepreneurship in a city. Entrepreneurs can bring innovative technologies, products, and services that can provide new job opportunities in the short and long term.

Here are some ways cities can support small businesses and  foster a thriving entrepreneurial ecosystem to drive economic growth and innovation:

• Provide Access to Resources
  Providing entrepreneurs and small businesses with access to resources such as capital, skilled labour, market research, and technology is a great way to help entrepreneurs start and grow their businesses. For additional support, businesses can provide financing access, such as small business loans, microloans, or grants.
• Implement Business-friendly Policies:
  Creating policies that make it easier for entrepreneurs to start and run businesses within the city, like streamlined licensing processes, tax incentives, and zoning regulations, can attract and support the growth of small businesses.
• Business Development Services
  Providing small businesses and entrepreneurs with business development services, such as marketing, accounting, legal, and other consulting services, can help small businesses to develop and grow their operations.
• Networking Opportunities
  Creating networking opportunities for entrepreneurs to connect with other business owners, mentors, investors, and customers can help businesses build relationships, find new customers, and access resources they may not have had access to otherwise.
• Education and Training
  Providing education and training programs like workshops, seminars, and mentoring programs can help business community members improve their skills and knowledge.
• Incubators and Accelerators
  To support growth, cities can look into creating incubators and accelerators that provide entrepreneurs with resources, space, and support to help them thrive.
• Access to Markets
  Cities can help entrepreneurs access markets locally and globally by providing market research, export assistance, and other support services. This can help businesses to expand their customer base and increase sales.
• Promote Support for Local Businesses
  Cities can support small businesses by encouraging residents and visitors to shop locally, creating programs promoting local businesses, and providing resources to help small businesses compete.

Strategy #5: Engage with the Business Community

BONUS Strategy #6: Attract New Businesses with Tax Incentives

Tax incentives are a great tool to attract new business to a city and can encourage new businesses to start. They can also boost innovation and new business growth within cities by reducing the costs of starting and operating a business. 

In no particular order, please see below some possible tax incentives ideas that cities can offer. Please note that some may not apply to your city as it depends on your country and legislation about the level of control.

• Property Tax Abatements
  Offering property tax abatements to new businesses located within the city can help reduce the cost of operating a business and make the city more attractive to businesses.
• Sales Tax Exemptions
  Cities can offer sales tax exemptions on purchases of equipment and supplies for new businesses. This can help to reduce the cost of starting a business and make it easier for new businesses to get off the ground.
• Tax Credits for Job Creation
  To encourage businesses to hire more employees and contribute to the local economy, cities can offer tax credits to businesses that create new jobs within the city. 
• Research and Development Tax Credits
  Offering tax credits for businesses that invest in city research and development can help encourage innovation and the development of new technologies.
• Investment Tax Credits
  Offering tax credits to businesses that invest in new facilities or equipment within the city can help to encourage businesses to invest in the local economy and contribute to its growth.
• Net Operating Loss Carryovers
  To help encourage businesses to take risks and invest in new ventures, cities can allow businesses to carry forward net operating losses to future years, reducing their tax liability in the years when they are profitable.

By considering these strategies, cities can foster growth by implementing strategies such as engaging with their business community, providing incentives and offering resources to encourage business development in their city.