The economic doldrums have hit communities throughout the United States. There is the immediate problem of the recession, and there’s long-term decline as jobs are re-located to China and other countries.

This has prompted the growth of a governmental function called “economic development”, which means the local government stepping in to try to attract or create new business. Some would cringe at that idea. The very nature of government, from its cumbersome decision making processes to the corollary, government’s practice of spending money without suffering the consequences of bad decisions, make public involvement in the private market a challenge.

Yet a local government would be abandoning its responsibility to the public welfare if it did nothing while jobs, money and prosperity dried up and disappeared. However poor an instrument government may be for the job, there isn’t much of an alternative.

So the government steps into the private economy and inevitably makes mistakes. For example, there is the problem of the community leadership, acting on common political and bureaucratic instincts , abdicating all responsibility and letting the economic development staff drift off on its own. Then there is the problem of hiring people with the wrong skills.

These are errors because an economic development job is not a typical public sector job. Sales skills are needed, as is the active help and guidance of the supervising community leaders. Hiring the guy who used to be the assistant commissioner of the state bureau of vegetables and telling him to check back in six months is not a valid economic development program. Yet the candidate who has the resume packed with previous governmental or non-profit experience is often the one who gets the economic development job. The candidate who sold cars and real estate and who has strong sales skills is passed over.

Many other missteps flow from those two. To the extent that these missteps can be boiled down to a list, here are six.

Lack of vision and leadership

The first question in bringing new business to a community is: what new business? The first step in economic development is vision: to “see” new businesses that could come to or be started in the community. These may not be the most attractive or well-known businesses, but they are the businesses for whom the community might be a good, reasonable fit. Reasonable is the key word. Google is not going to move to some small town in a remote corner of the United States. But other companies might. The business press, including magazines, newspapers, internet sites and radio and television shows, are a great source of leads. The media regularly profile new and interesting businesses, including those that are growing and looking for new locations. But this requires hours of reading and research, which is real work.

To try to avoid doing too much real work, economic developers sometimes bide their time by holding what have come to be known as “visioneering” sessions. In such a session, random members of the public (whoever happens to show up) are invited to say what they would like in the way of new business and community development. The results of visioneering sessions run from the ridiculous to the delusional, from suggestions for polka dot trampolines by the tennis courts to the inevitable suggestion that the town contact Disney to set up a new Disney World at the old factory site. None of this helps bring in new business because a random crowd of people is very unlikely to have what might politely be called an informed viewpoint. When Henry Ford said was asked if he had surveyed the public before building his Model T, he said: “If I had asked the public what they wanted, they would have said a better horse.” The point of visioneering is to make it seem like the economic development staff is accomplishing something when they’re not.

Given the improbability of spontaneous good ideas coming from the public, the community leadership actually has do the hard job (oof!) of actually being leaders when it comes to economic development. This starts with taking the lead in researching and pursuing good leads, and continues with creating the consensus within the community to pursue new business and accept it when it arrives. It’s fruitless to spend months to bring a business to town only to have it confronted by angry shouting at the planning board and furious letters to the editor. Secretiveness is often a problem. Economic developers have a tendency to do things behind closed doors, which is a risky practice. The community leadership should be above board as much as possible in everything it’s doing for economic development. If that openness brings out opponents in the community, all the better. This gives the community the chance to fight the fights and win the arguments – or give up on certain strategies – before time and effort is wasted in having the hapless, prospective business face a stonewall at a stone-faced planning board.

Poor packaging

A community looking for new business can be compared to a product looking for a customer. Like any product, it has to be packaged and marketed correctly. Many communities don’t do this very well. The first part of packaging a community is information: doing the research to present and describe the community to prospective new business. This starts with a list of the community’s infrastructure and services, includes existing businesses and industries and goes through to real estate available for sale and real estate that could be available at the right price. This research should then be boiled down into a digestible form – something brief like a pamphlet, for a prospect with limited interest – to something detailed, like a full report, for a prospect who has already expressed interest. Web sites and web-based video are becoming essential additions to printed materials. Videos are easier to view than a brochure is to read. The packaging effort requires detailed knowledge of the community. There’s no point in spending time and money to bring a factory to a community only to discover at the last minute that the sewer system isn’t big enough to handle the additional flow.

Fear of cold calls

Once businesses are identified who might be interested in coming to a community, the job is just to get on the phone (or computer) and contact them directly. Here’s where the standard government employee is probably going to get beyond his or her comfort zone. Not everyone is cut out for sales and many who seek government jobs, including jobs in economic development, are hoping for the kind of work where there isn’t much contact with those who may not want to be contacted. But that’s exactly what a sales person does. That’s exactly what’s needed to bring new business to a community. Cold call selling works on a simple principle: most of those contacted will say no, but one in ten (or one in a hundred) will say yes. The job then is to contact all ten, and get nine noes, in order to get to the one yes.

Lack of persistence

Some of those contacted in a cold call sales effort might not fall completely into either the yes or no camp. These are prospects who should be pursued. Many communities not only take no for an answer, they also take a maybe for a no. If they don’t get an immediately positive response, they never follow up on their initial contacts. It’s a lot to ask a business to invest in a new community. Just as in a marriage, it is reasonable to expect that it will take some time to develop a relationship strong enough to merit such a long-term commitment.

Lack of record keeping

When a community hands off the responsibility for economic development to a staff and doesn’t stay involved, they often fail to require detailed records. This lies in the reflex many government leaders have not to “micromanage”. They don’t scrutinize the police patrol schedules because it would annoy the police chief, so they don’t scrutinize the call lists of the economic development staff. In fact, they often don’t even require call lists. But economic development is a different sort of government activity. Failing to require detailed records leads to the loss of time and effort. The value of economic development work lies in the lists of prospects who have been identified and called, and in what the prospects said when contacted. Those lists should be called over and over again, even if, from year to year, the people doing the contacting are different. If lists are lost, the community has to start the cold call effort over again from scratch. Not only is this is a loss of time and money, it’s also a loss of whatever tentative interest might have been created in the businesses who were contacted.

Getting suckered

A community eager – even desperate – for new business is, unfortunately, also a community vulnerable to be taken advantage of by both dreamers and schemers: people who say they are interested in bringing a business to the community but either lack the capacity to do so or people who have some questionable ulterior motive. It is not uncommon for earnest but cash-strapped entrepreneurs to approach a town seeking help for some grand business idea, thinking that the town can somehow provide the cash. Communities can waste a lot of time, and sometimes money, with such dreamers before the idea usually evaporates, as it usually does. In the worst case, the community may be foolish enough to hand over some money, which also usually evaporates. While it is always important to be open and welcoming to anyone who proposes to bring in a new business, communities must subject any such prospect to the kind of screening that a bank or a car dealership would do. There are some simple questions. Does the prospect have a written business plan with a clear set of numbers showing how much the business would cost and how and when it would make money? Do the numbers make sense? Are they similar to numbers in similar, established businesses? Most importantly, has the prospect made any kind of stake in the community? Have they purchased real estate? Can they provide a letter of credit from a bank? If they are asking for public money, will they match those funds with their own funds? What is their employment and business history? Do they have credible references (not their brother-in-law)?

It could be said that putting government in the business of promoting business is a good example of the phrase “strange bedfellows”. Working in the private sector and developing business is not a natural or easy function of government. Yet it can work. In the creatively destructive economy of this country, businesses are being started, expanded and re-located all the time. It is a big country. The odds of a company headquartered in Atlanta finding a small town in New England are very poor unless that small town is on the phone to that company, showing them why it makes sense to set up shop in their community. Then the odds get better. Not certain, but better. And in this economy, better is better than nothing.