Economic Development Week | Econ Dev History

Early Beginnings and Institutionalization

The profession’s rudimentary forms began in the late 19th and early 20th centuries, primarily focused on business attraction and commercial development by local business leaders and chambers of commerce. These efforts were largely ad-hoc, driven by the immediate needs of individual communities to boost local economies. During the Great Depression, the federal government’s New Deal programs, especially those creating jobs and infrastructure, can be seen as early precursors to modern economic development practices, although the term “economic development” was not yet in use.

Post-World War II Expansion

After World War II, the profession gained formal recognition and began to institutionalize. The need for planned economic growth led to the creation of dedicated economic development offices at state and local levels. The establishment of the Economic Development Administration (EDA) in 1965 under the U.S. Department of Commerce marked a significant milestone, providing federal resources to support local economic development efforts. This period also saw the rise of industrial parks and tax incentive strategies to attract manufacturing firms, which were central to the era’s economic expansion.

Theoretical Foundations and Professionalization

The late 20th century saw the profession’s further evolution with contributions from academics and practitioners who introduced comprehensive theories and models. Michael Porter’s theories on competitive advantage and economic clusters, developed in the 1980s and 1990s, provided a sophisticated framework that many economic development professionals adopted to enhance regional competitiveness. This era also saw the rise of professional organizations such as the International Economic Development Council (IEDC), founded in the early 2000s through the merger of earlier bodies, which played a crucial role in standardizing practices and offering certifications, thereby professionalizing the field.

Modern Economic Development

In recent decades, the field has broadened its focus beyond business attraction to include workforce development, entrepreneurship, placemaking, and sustainability. Economic development professionals now work on a diverse array of initiatives from revitalizing urban centers to developing green energy sectors, reflecting broader societal values and economic realities. This expansion has also led to an increased emphasis on data-driven decision-making and a more holistic approach to economic health, involving community engagement and cross-sector collaboration.

Impact of Technology and Globalization

The current phase of economic development is deeply influenced by technology and globalization. Professionals are increasingly focusing on innovation ecosystems, digital infrastructure, and global trade dynamics, adapting strategies to the realities of a connected world. Economic development now involves a strategic blend of attracting high-tech industries, fostering startups, and building an educated workforce that can thrive in a knowledge-based economy.

This evolution from basic commercial boosterism to a sophisticated, multidisciplinary profession highlights how economic development has adapted to changing economic conditions and societal priorities. It continues to evolve, facing new challenges such as economic inequality, climate change, and technological disruptions, which all shape the future directions of this critical field.