Community Economic Development:

Key Concepts
Community economic development more about quantity, while development
(CED) is a crucial process for any com- is more about quality. As a community
munity, regardless of size or location. With leader, do you want your community
globalization continuing to impact com- to grow or do you want it to develop?
munities and the digital age in full swing, Answering this question is critical before
understanding what affects CED is critical. attempting to implement a CED process in
Community economic development, when your community.
implemented correctly, has the potential to Let’s begin with a basic question:
help communities not only remain compet- What is a community? The definition of
itive but, more importantly, adapt to a very community is usually taken for granted
complex and dynamic situation. but not truly understood. As an example,
This publication, the first in a com- ask several of your colleagues how they
munity economic development series, would define community, and you will
provides key concepts and definitions see that their definitions vary widely. So
related to the CED process. These describe what is a community? A community is a
what this process includes, what affects it, geographically defined place where people
and how it can be unleashed in communi- interact (Robinson & Green, 2010). But a
ties. In practice, community and economic community is not only the physical space
development go hand-in-hand and dis- where people interact; it also provides
tinguishing them is somewhat difficult; in important activities and functions that serve
theory, however, it is easier and appropri- its residents. These community functions
ate to do so. range from economic (provides goods
and services) to socialization (the process
Key Concepts & Definitions through which the community transmits its
The concepts covered here are not knowledge, values, and behavior patterns
intended to be comprehensive, but they to its residents) to social control (the pro-
should provide a broad understanding of cess through which a group influences the
the CED process. Before we discuss these behavior of its members to conform to its
concepts, it is important to understand a norms) to social participation (provides a
key difference between growth and develop- venue through which residents can partici-
ment. Many people equate these two terms, pate in their communities) to mutual sup-
which can have negative consequences for port (provides help and support in times of
the CED process. Growth is a quantitative need) (Warren, 1987).
increase, while development is a change These functions are not carried out in a
aimed at a particular goal (Robinson & vacuum; they rely on institutions—defined
Green, 2010). In other words, growth is as rules, including informal norms, and or-
ganizations that coordinate human behav-
ior (Anglin, 2011). Institutions in a community vary a process that influences growth and restructuring of an
and include family, economic, education, political/ economy to enhance the economic well-being of a community
government, faith-based/religious, and associations. (International Economic Development Council)
For example, some communities may have stronger
political institutions and weaker education-related Regardless of the definition used, economic de-
institutions. This institutional diversity affects hori- velopment is often associated with two objectives: (1)
zontal and vertical linkages in the community. Hori- creation of jobs and wealth and (2) improvement of
zontal links refer to connections between local institu- quality of life (International Economic Development
tions (such as a local nonprofit with the local school), Council). The first objective typically leads to the sec-
while vertical links refer to connections between local ond, but, generally, the focus is on the business aspects
institutions and external (state, regional, or federal) of communities. So the difference between community
resources (such as the local economic development and economic development boils down to one ap-
organization with a statewide or regional economic proach (community development) focusing on broad-
development agency). The catch here is that focusing er community issues including but broader than jobs and
only on vertical links can compromise community businesses, while the other approach (economic devel-
autonomy—relying almost solely on external orga- opment) focuses mostly on jobs and businesses. Both
nizations to move the community forward. A more are processes taking place in a community or region.
balanced approach uses horizontal links to identify These concepts are summarized in Table 1.
community priorities and issues and then vertical
links to secure external resources and expertise. CED and Sustainability
In summary, linkages are the capacity of communi- Make no mistake: community and economic de-
ties to carry out functions that depend on the nature velopment are intertwined. It is important to distin-
and strength of institutions (Robinson & Green, 2010). guish them theoretically, but, in reality, they depend
The question now becomes: What is community devel- on one another to make a community sustainable. In
opment? Though multiple definitions exist, this is a other words, CED allows residents to mobilize and build
good community development definition: assets to improve their quality of life in a sustainable way.
If too much effort is placed on either at the expense of
a group of people in a locality initiating a social action pro- the other, the community will struggle and will not be
cess—i.e., planned intervention—to change their economic, sustainable. In this particular context, sustainability
social, cultural, and/or environmental situation (Christenson &
refers to engaging in practices that result in availabil-
Robinson, 1989)
ity of resources, services, and quality of life for future
If you have a hard time remembering such a long generations.
definition, remember these key words: people, locality, CED is a complex process. Multiple moving parts
planned, change, and situation. Community develop- and players are involved, and it may take years to bear
ment is all about people planning to change a specific situa- fruit. However, with committed leaders and a clear
tion in their communities. vision of where the community wants and needs to be,
To effectively identify solutions and deploy CED can move communities forward in a comprehen-
resources and programs, multiple players, including sive way. Community challenges and opportunities
but not limited to local residents, private foundations, emerge together; it is up to the community to decide if
government officials, and community development it will focus on the challenges or on the opportunities.
corporations, need to be involved in the process. CED is a process that allows a community to focus on
both but, more importantly, to adapt to challenges and
opportunities.
Community Development The next community economic development pub-
versus Economic Development lication will talk about general community develop-
Now that we have discussed key concepts and ment approaches.
defined community development, we need to under-
stand what economic development is. This is a good
definition of economic development:
 Table 1. CED key concepts and definitions.

Key concept Definition

Growth Quantitative increase in size

Development Quality change aimed at a particular goal

Community Geographically defined place where people interact

Functions Responsibilities and activities inherent in a community

Institutions Rules, including informal norms, and organizations that coordinate human behavior

Capacity of communities to carry out functions depending on strength of institutions; these can be
Linkages
vertical and horizontal

Community development People in a defined location planning to change a situation

Economic development Process that influences growth to enhance well-being

Community economic Process that allows residents to mobilize and build assets to improve their quality of life in a
development (CED) sustainable way

References
Anglin, R. V. (2011). Promoting Sustainable Local and
Community Economic Development. CRC Press.
Christenson, J. A., & Robinson, J. W. (1989). Commu-
nity Development in Perspective. Ames: Iowa State
University Press.
International Economic Development Council. (n.d.).
Economic Development Reference Guide. Interna-
tional Economic Development Council. Retrieved
from http://www.iedconline.org/clientuploads/
Downloads/IEDC_ED_Reference_Guide.pdf
Robinson, J. W., & Green, G. P. (2010). Introduction
to Community Development: Theory, Practice, and
Service-Learning. SAGE Publications.
Warren, R. (1987). The Community in America (3rd ed.).
UPA.
Publication 2901 (POD-08-15)
By Roberto Gallardo, PhD, Associate Extension Professor, Extension Center for Technology Outreach.

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