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ECONOMIC LITERACY: Getting to know Community Economic Development

A. Introduction

Communities across Ontario are grappling with many difficult issues, one of the most common and challenging being economic development/ economic sustainability. The Healthy Communities model is an effective way to promote economic development in the broader context of social, environmental and economic health and well-being. To make this happen the Ontario Healthy Communities Coalition (OHCC) has started a Community Economic Development Project - Healthy Economy, Healthy Communities - thanks to funding received from Human Resources Development Canada. This project supports community capacity building through training, facilitation, networking, linking and information exchange using OHCC's Community Animators. These animators are at the interface of what the provincial organization represents -- its membership and the activities of these coalition members. Several OHCC members have asked for more assistance in the area of economic development. This article explores definitions of terms and concepts often used in the field of community economic development (CED).

B. Terms and Concepts

There may not be a common understanding as to what these terms/ concepts mean. Also, when a particular concept is applied, various models, determined by the funding or organizing body, may be used. Many of the terms are similar, offering perspectives on similar issues; others are distinct. They help best, therefore, to further discussions, rather than to isolate issues; to find commonalities, not differences. Many of these terms have been taken (with permission) from an article written by Stewart Perry in the Spring 1999 edition of Making Waves. See the article at: All of Stewart Perry's definitions are in quotation marks.


Community can be defined by location with geographical parameters that determine the shared commonalities of residents. There are also communities within communities and these may be people who have similar cultural backgrounds, race, religion, age, or interests.

Economic Development

"Economic development refers to the deliberate effort to improve the economy of a specified geographic area, which can be as large as an entire nation-state or as limited as a city neighbourhood.

Benefits, beneficiaries, and ownership can differ from case to case. The intended economic improvements themselves will also vary from case to case. Indeed, one of the problems in the process is how to define the measures that would indicate whether, or to what degree, any improvement has taken place." [S. Perry]

Community Economic Development (CED)

"Sometimes called "community-based economic development" and abbreviated as CED, this specifies the geographic target of economic development activities as a rather limited locality.CED will involve a comprehensive, wide-ranging program of activities for the overall improvement of the locality as a place to live and work. Because it is comprehensive in approach, it can include virtually any activity that might be seen locally as community improvement (for example, promoting a folk opera, drug abuse services, increased police protection, housing rehabilitation). But, CED always includes some type of business development activity. [T]he over-arching goal of CED can be inferred in a technical sense as the creation of more powerful institutional levers, or in short, improved community tools - new businesses, improved local facilities, changed practices by established institutions e.g. banks. Thus the root measure is the extent and depth of such community tools, rather than a single dollar figure of some sort."

Community Economic Social Development (CESD)

Community Economic Social Development is the same approach as CED, but adds the dimension of awareness and analysis of potential social benefits and pitfalls in all initiatives. Potential social problems are addressed in all phases of development as the value of meaningful human interaction, enhancement, and improvement is inherent in the principles that guide the process.

This is particularly useful for communities where citizens have historically been politically marginalized. The history of the population group and context of their experiences is at the forefront and is an accountable consideration when planning.

Sustainable Community Development

An increasingly popular phrase, Sustainable Community Development, is coined from the collaboration of the three "e's" -- economy, environment and equity. It is a comprehensive, community approach to improving quality of life. It is a comprehensive, community approach to improving quality of life. It looks at who benefits from new business and how economic initiatives can be added and enhanced to benefit a greater number of people. All economic initiatives and activities are established without jeopardy to the environment. Respect for the land, water, and air of future generations is given full consideration and forethought. Equity is considered by asking such questions as:

- 'Is anyone displaced or further marginalized for the sake of something new?'

- 'Is there direct community improvement or do only a few people get richer?'

- 'How can those with less be empowered to access empowering tools and opportunities?'

- 'Are energies directed at the haves and negating the have-not populations?'

The process of undertaking a SCD approach requires government decision makers and the community at large to agree upon a philosophy and value system that recognises the inseperability of the three "e's".

Local Economic Development

"The reference of this term is very close to community economic development in that it targets a specific fairly limited locality for more than a single project approach. Where it differs most is in the usual governance structure. That is, as a program, "LED" is generally carried on by a local government (or quasi-government entity) or by a business consortium such as the local Chamber of Commerce.

The lack of participation in governance by a broad range of community residents tends to mean that both ownership and the program's activities may be relatively limited, thus reducing the spread of benefits and beneficiaries. Moreover, without broad citizen participation, LED tends to be a less comprehensive strategy, involving fewer different functions."

Business Development

"Business development encompasses activities that seek either to create or attract new business firms or to enhance existing ones to make them stronger or larger. Thus business development is a more limited strategy than economic development. However, clearly more than industries are involved in the term "business". The sector includes all types of entity that offer goods and services."

Microenterprise Development

"This is a particular subset of business development activities that seeks to promote new or enhanced very small businesses. The activities are usually limited to offering credit, technical assistance, and training. They are intended to increase ownership of businesses by local individuals and, perhaps, families, but almost always lower income people.

The benefits are most usually the self-employment (and also greater skills and self-empowerment) of the owners. But to a very limited extend, additional jobs may arise and also an increase in the local availability of goods and services."

Value Added

This term is used to describe the effect of taking a product to a more advanced stage of processing through a simple change. An example could a when a sawmill that is set up to cut planks for use in building, adds an additional notch at the end of the board and creates 'joists'. By adding that small feature, they have added value to their product - creating something the building industry will use without making further adjustments. In our work, an example could be publishing a workbook and enclosing a disk of the materials to enable users to work on forms and change them - adding value to the product. The term 'value added' is something that is definable in the planning stages, and with some forethought, can be taken far beyond what would occur naturally with new developments.

C. Healthy Economic Development

Healthy Economic Development as defined here is taken from Healthy Economic Development: A New Framework, by David J. Connell.

"A persistent fault of current economic development is the belief that people, communities and their nations serve the economy. The premise of and starting point for healthy economic development is to put people first. This requires us to shift from a focus on growth to a focus on development that includes all aspects that contribute to our quality of life: our social, physical, political, environmental, and economic health..

To maximize the potential of local ingenuity we must re-discover the inherent economic potential of people and their natural associations. These associations, more than anywhere else, exist within our communities, among our neighbours, and within our homes. Certainly, if the solutions to the challenges of globalization continue to point to local sources for creating wealth, we must be willing to explore a new framework for economic development..

Healthy economic development is not just an economic framework, it is part of a broader community planning model.This framework is founded upon community-centred values

- Community is the foundation for creating wealth and for furthering individual and public health,

- The health of our communities lies in its capacity to come together, to act together on an issue of public concern rather than private concern

- Economics is one of many factors, including social, environmental and political, that promote the health of our communities; and

- Communities have the wisdom to identify their own issues and the capacity to address those issues by learning from others and using their own resources.

Healthy economic development requires us to integrate social and economic development. In practice this means addressing the systemic bias that builds dependency on external sources for capital and demand. This does not mean total import substitution or a commitment to self-sufficiency. The key to any economic development strategy is to find a healthier balance through diversity. . Our aim is to correct a weakness that undermines our ability to create wealth using local means."

Cindee Richardson is the OHCC Community Animator for the Northwest Region.

Stewart Perry is the former director of the Community Economic Development Centre in Sydney Nova Scotia.

David Connell is an independent consultant and PhD student in the Rural Studies program, University of Guelph. His research interest

is to study the dynamics of creating healthier economies and healthier

communities in rural Ontario.