Economic gardening is a local or regional economic development strategy that focuses on supporting local entrepreneurs and small businesses instead of "economic hunting" - attempting to attract new businesses from outside the area.  The idea was developed in Littleton, Colorado (they have a great description of economic gardening on their website) in the late 1980s and has since spread to many communities across the US. 

The interest in economic gardening is being driven by two main factors:

1.  The growing body of research showing that small businesses create the vast majority of new jobs. With small business creating 70-80% of all net new US private sector jobs it makes sense that local economic development should focus on local small businesses. 

2.  A growing realization that "economic hunting" by itself doesn't work very well for most communities.  While some communities benefit from economic hunting, there are too few companies moving to meet the needs of the vast majority of US towns.  Policy makers are also realizing that the incentives required to attract new businesses (especially big businesses) are expensive and do not guarantee the firm will stay after the incentives run out.

Economic gardening programs tend to focus three areas to help build local small businesses:

1.  Information resources and marketing assistance:  these programs often include access to competitive intelligence and market information that generally are not available to small businesses.  For example, Humboldt county in northern California has set up a competitive intelligence program to help small businesses.  Key quote from an article on the program:

"Competitive intelligence (C.I.) research specialists -- both industry specific and for business in general -- are experts in conducting strategic research to facilitate business growth. Competitive Intelligence research and consulting services are typically expensive and are most commonly set up to serve urban-based and very large companies. However, Humboldt State University has just launched a new service to make this strategic research for critical planning and market development challenges much more convenient and affordable to local firms."

2.  Infrastructure:  these programs focus on building the right kind of local business resources and capabilities that will support local small businesses.  This includes traditional items like roads, taxes, etc. as well as quality of life and education. 

3.  Networking and information sharing:  early economic gardening program success in Littleton and other communities has shown that providing networking opportunities and access to local universities, think tanks, trade associations, etc. is a major key to local economic development success. 

While traditional economic development methods will continue to be used, economic gardening is becoming increasingly important for local and regional economic development.  This is yet another example of the growing role small business is playing in the US economy.

For more on economic gardening see the US SBA report The Small Business Economy 2006, chapter 6 "Economic Gardening."

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