Economic development programs use zoning, loans, training, and local purchasing to stimulate growth. Tax credits may be given to developers in “corporate zones,” and loan programs can be used for business expansion. Local purchasing initiatives boost local businesses and tax revenues. Brownfield remediation restores polluted industrial sites for new productive purposes.
Different types of economic development programs may employ zoning to stimulate economic development, establish revolving loan programs to assist businesses, or provide training for entrepreneurs. Local purchasing initiatives are sometimes used to maintain greater economic activity within a specific area. At other times, local and regional governments as well as academic institutions can support research or fund investment in innovation. Other economic development programs can be designed to rehabilitate polluted industrial sites.
Zoning can be used as a tool in economic development programs. In some regions, laws are passed to set aside areas as “corporate zones,” in which developers receive tax credits in exchange for infrastructure investments on vacant land. For example, a company that wants to build a factory may be offered a tax credit for a certain period of time, usually over several years. The working idea behind these programs is usually to waive taxes for several years in exchange for an incentive for a developer to bring additional jobs to a community.
Launching a loan pool or revolving loan fund is another technique used by economic development programs. The idea here is that when a local or regional government invests a certain amount of money to start a loan programme, the first beneficiaries will repay the money. These funds can later be used for other company expansions.
Sometimes a revolving loan will be offered to a business with no interest or with low rates. Loan pools can be offered through nonprofit community development organizations. These funds of money are often intended for entrepreneurs and loan amounts can vary.
Local purchasing initiatives are a type of economic development program based on the concept that encouraging residents of a community to buy from each other will boost local businesses, as well as increase local tax revenues. Government-funded research can also be used to develop new ways for a community to add value to locally available products. For example, a research project may involve finding new uses for leftover fibers from local agricultural crops and subsequently incorporating that material into finished products. Since the materials used for production can be free or relatively cheap, as they are often considered agricultural waste, new products can be produced and sold profitably. This often involves creating new jobs in a community.
Brownfield remediation is a specific type of program generally designed to restore heavily polluted industrial sites and reuse the land for new productive purposes. These types of economic development programs commonly rehabilitate land polluted by less technologically advanced production or mining methods that have resulted in the contamination. Shipyards, rail yards, and sites that once housed manufacturing operations involving toxic materials are typically involved in brownfield redevelopment efforts.
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