Government Entrepreneurs: Incentivizing Sustainable Businesses as Part of Local Economic Development Strategies

Abstract

This chapter (included in the book "Greening Local Government" edited by Patty Salkin and Keith Hirokawa) considers economic development strategies that capitalize on an emerging socially responsible and environmentally friendly economy.

Local economic development strategies used to attract private sector investment have remained almost the same for the past forty years. The private sector itself, however, is changing. There is a small, but rapidly growing, segment that has re-conceptualized the purpose of a for-profit business. An emerging portion of the private sector generates profit, value and marketability in fostering sustainable business strategies, focusing equally on economic profitability, environmental friendliness and socially responsibility.

In light of this evolution in the private sector, should local governments redesign economic development strategies to leverage the growth in sustainable businesses? The chapter concludes with steps local governments may take to directly incentivize sustainable businesses by increasing the sustainability of the incentives themselves, including a performance-based economic development strategy; and to indirectly encourage the development of sustainable businesses by helping to facilitate a market for their products.

This chapter does not present sustainable economic development strategies as a single option or as a blanket panacea. Rather, by implementing economic development strategies to accommodate and promote sustainable businesses, local governments enhance their sustainability and diversify their tax base. A welcoming business framework is crucial in driving interest and investments in sustainability to the mutual benefit of local governments and the private sector. As local governments look to support sustainable businesses, they will have a positive impact on communities, economic development and the environment in a sustainable and lasting manner.

Keywords: Sustainable, Sustainability, Local, Local Government, State Government, Public, City, Municipality, Economic Development, Environment, Environmental, Socially Responsible, Social Responsibility, Corporate Social Responsibility, Climate Change, Sustainable Business, Environmental Friendliness

JEL Classification: O00