Economic Gardening®: Nurturing High-Potential Local Companies for Job Growth

When you think of economic development strategies, your mind may first go to a local or state agency offering a bevy of tax incentives and other financial goodies to a large company that is considering moving to the area and providing new job opportunities to local residents. Alternatively, you might think of a program helping small shops along a town’s Main Street owned by a local budding entrepreneur to open and thrive. In between these two extremes lies a highly impactful and repeatable model called Economic Gardening®. Economic Gardening is a strategy that identifies innovative local companies that—with some guidance—have substantial growth potential.

The idea for Economic Gardening was born when a large international company laid off nearly half its workforce at its Littleton, Colorado location in the 1980s. This job loss spurred local officials to pivot from strategies focused on attracting out-of-state companies to nurturing local businesses with innovative products and strong growth potential. The concept is driven by the fact that many products and services are simply commodities. Once something is commoditized, businesses offering these products and services can only differentiate based on price, which leads to the offshoring of production or employees to reduce expenses. Economic Gardening instead focuses on businesses offering differentiated products with great market potential that will be able to continuously innovate to stave off the impacts of commoditization. As a business grows through sales beyond its local market, net new jobs are created within the community. These businesses are characterized as being in “Stage 2” level of growth, which is defined as firms having 10 to 100 employees and $1 to $50 million in annual sales volume. While these firms are not in a stage where they are merely trying to survive, they need strategic market information to further grow their business. About 10 to 15% of companies are in this stage, yet they comprise about 35 to 40% of jobs.

Figure: The Importance of Nurturing Local Stage 2 Companies

When Economic Gardening principles were applied in Littleton, the job base in the community doubled from 15,000 to 30,000. The Economic Gardening experiment’s success in Littleton captured the imagination of many communities globally grappling with similar issues. Building off their work in Littleton, Chris Gibbons and Jim Woods founded The National Center for Economic Gardening to help replicate the approach in interested communities. Today, Economic Gardening programs are operating in 25 states, regions, and communities with the help of this organization.

The National Center for Economic Gardening has many resources available for community leaders and business owners who want to learn more. This includes a training program for certification in Economic Gardening as well as a team that can help states, regions, or communities to create their own Economic Gardening initiatives.

A more detailed overview is available in an on-demand webinar. In addition, a free book is available for instant download that provides a more in-depth discussion of the process and concepts that inform Economic Gardening.

The next article in this series on Economic Gardening will profile communities that have taken this economic gardening approach and the impacts to their economies.