Brownfields- The United States Environmental Protection Agency defines brownfields as commercial or industrial sites that are abandoned or under-utilized and have some degree of environmental contamination, whether real or perceived. The General Accounting Office estimates that U.S. communities contain close to 450,000 brownfields sites, but some others have suggested that the number may be closer to 600,000. Historically, brownfields, which tend to be located in economically distressed neighborhoods, were not redeveloped because environmental clean-up costs were high, pertinent regulations were complex, and unclear liability dissuaded both developers and banks from investing in these projects. In the 1990s, reforms and new initiatives at the federal, state and local levels eased the process and made brownfields redevelopment and reuse a viable economic development objective.

Business Recruitment and Attraction- Business attraction and recruitment was once considered the main approach to economic development. Because of the high costs of economic development marketing, attraction is often the most expensive approach to economic development. The attraction of new businesses into an economy may quickly increase the tax base, jobs and the diversity of the local economy. Business attraction is the most publicized and visible economic development tool because it creates many jobs at one time and because of the use of incentives and marketing.

Business Climate- Business climate indicates how states state, regional and local policies, relationships and local communities support business development. Ultimately, a good business climate allows businesses to conduct their affairs with minimal interference while accessing quality high inputs and customers at low costs. While no business climate is perfect for every kind of company, certain attributes of the regional or local economy allow investors to find fewer risks and higher returns when compared to other places.

Business Retention and Expansion- Healthy communities have strong, healthy businesses. As competition among communities for increasingly footloose businesses heats up, business retention programs have become the most popular economic development efforts of communities nation-wide. While retention programs emerged in response to business defections and the negative impacts those defections have on the local economy, they have increased in importance as communities recognized that real job growth over time comes from local business expansion. Surveys of U.S. economic development organizations rank it as the number one economic development activity.

Capacity Building- Mobilizing of individual and organizational assets from the community and combining those assets with others to achieve community building goals. In its work for this report, the Advisory Committee considered the special needs for capacity building in distressed communities and regions for convening civic, business, and governmental partners and collaborators to formulate and implement strategic plans and to access resources under the Strengthening America’s Communities Initiative. In addition, the Committee sees an important component of capacity building to include strengthening the skills of state, regional, and community economic development officials to allow them to facilitate regional governance models, strategic competitiveness strategies, partnerships, actions, performance, and accountability.

Challenge Grants- Challenge grants are competitive grants available to communities or regions that have adopted economic development strategies and taken action to encourage investment and business expansion. An Economic Development Challenge Fund is a specific component of the Strengthening America’s Communities Initiative that was proposed by President George W. Bush as part of his FY 2006 budget request to Congress. The initiative proposes a bonus grant program for low-income communities facing economic challenges that have already taken steps to improve economic conditions and demonstrate readiness for development.

Clusters- Clusters are geographic concentrations of interconnected companies and institutions in a particular field. Clusters encompass an array of linked industries and other entities important to competition. They include, for example, suppliers of specialized inputs such as components, machinery, and services, and providers of specialized infrastructure. Clusters also often extend downstream to channels and customers and laterally to manufacturers of complementary products, and to companies in industries related by skills, technologies, or common inputs. Finally, many clusters include governmental and other institutions — such as universities, standards- setting agencies, think tanks, vocational training providers, and trade associations — that provide specialized training, education, information, research, and technical support.

Community Development- Activities that increase positive outcomes within a community by linking individuals and organizations working toward common ends. The U.S. Department of Housing and Urban Development more broadly defines community development as being “many different programs that provide assistance to a wide variety of grantees.” (See the section of this report titled “A Definition in Flux” for an expanded discussion of the meanings and uses of the terms “community development” and “economic development.”)

Competitive Grants- Grants awarded by means of a review of relative merits of multiple proposals, whereby grant requests proposing activities with greater impact and more certain outcomes are given priority over requests where activities will have less impact and less certain outcomes. Competitive grants typically require matching funds and leveraging of non-federal investments and job creation.

Competitiveness- A nation’s ability to sustain and drive long-term productivity growth and maintain a rising standard of living for all its citizens. Competitiveness is the way communities, states, and regions will succeed in the 21st century global economy. Achieving economic competitiveness requires engagement and collaboration of networks of economic, environmental, and social assets to identify and utilize distinctive competitive advantages. In an era of globalization, economic competitiveness is more effectively pursued by regions of economic spheres of common interest.

Development-Ready Community- A community that has taken steps to improve conditions to be more attractive for businesses and investment. These steps may be different for each individual community situation, but in all cases they should include joining in regional efforts to identify competitive assets and participating in the development and implementation of a strategic plan for regional competitiveness and economic growth.

Distressed Community- A community where indicators of economic standing show significant weakness. These indicators may include such factors as unemployment, underemployment, home ownership rates, business formation rates, capital investment, changes in assessed valuations, percentage of substandard housing, out-migration and population loss now prevalent in some rural regions, and adverse impacts from rapid immigration prevalent in some border communities and regions.

Downtown Development- Downtown development is the promotion of development, redevelopment, and revitalization of the central business districts and adjacent areas in a city. Commercial and residential growth in the suburbs has contributed to the decline of downtown. Down-towns traditionally are the centers of both business and culture. Developing down-towns, therefore, involves a range of activities, including marketing for both business and tourist attraction, building or improving infrastructure, clean-up initiatives, property redevelopment and reuse, and retention programs. The purpose of these initiatives is to create an attractive environment to increase the number and variety of businesses downtown and bring in shoppers and tourists.

E-commerce- E-commerce allows commercial business transactions with the assistance of electronic-based tools. Today the majority of e-commerce takes place over the Internet, however it also includes fax and telephone transactions.

Economic Development- Influencing growth and restructuring of an economy to enhance the economic well-being of a community, region, state, or nation and its citizens.

Entitlement Grant- Grants that are awarded by standardized formulas and not by the relative merits, impacts, or assurance of outcomes. Entitlement grants have been typically awarded on an ongoing basis with certifications for compliance with basic regulations and with no requirements for matching funds.

Entrepreneurship/Entrepreneurial Activity- The exploitation of opportunities that exist within a market. “Entrepreneurial companies continually bring new products and services to market, and make dramatic rather than incremental changes when product modifications are required. Entrepreneurial companies initiate actions rather than wait for the competition to make a move. They do not avoid competitive clashes, and are often the first to introduce new products and services. They pursue riskier projects with higher returns and greater uncertainty. They believe that bold action is necessary to achieve lofty objectives. When confronted with uncertainty, the entrepreneurial company will take the risk, refusing to be paralyzed by the fear of failure. In short, entrepreneurial oriented firms are innovative, proactive, and willing to risk."

Entrepreneurs undertake a managerial role in their activities, but routine management of an ongoing operation is not considered to be entrepreneurship. In this sense entrepreneurial activity is fleeting. An individual may perform an entrepreneurial function in creating an organization, but later is relegated to the role of managing it without performing an entrepreneurial role. In this sense, many small-business owners would not be considered entrepreneurs. Finally, individuals within organizations (i.e., non-founders) can be classified as entrepreneurs because they pursue the exploitation of opportunities.

While many entrepreneurs undertake activities that do not have huge impacts on regional growth, dynamic entrepreneurs in high-growth industries can drive economic growth.

Export/Trade Development- Export/trade development and promotion enables firms to expand their market area and possibly extend the life cycle of products or services that have exhausted their existing markets. Typically, firms do not have the resources to explore or develop an export-marketing plan. Exporting can contribute to a firm's sales volume and create new jobs for the local economy.

Empowerment Zones/Enterprise Communities- Distressed urban and rural communities face problems of high unemployment, crumbling infrastructure, minimal access to capital, and psychological despair. To help with these problems, communities can apply to become designated one of HUD's Empowerment Zone/Enterprise Community Initiative's (EZ/EC). The initiative recognizes that local communities, working together, can best identify and develop local solutions to the problems they face.

Globalization- The process in which geographic distance becomes a factor of diminishing importance in the establishment and maintenance of cross-border economic, political, and sociocultural relations. Globalization can be thought of as the widening, intensifying, speeding up, and growing impact of worldwide interconnectedness.

Innovation- The turning of new concepts into commercial success or widespread use. Innovation is not exclusively a technological term and can occur more broadly across a region’s economy. Innovation can be spurred when research and educational institutions contribute to the development and diffusion of new knowledge, human talent, and technologies in a region. Ideally, interconnected institutions form a system whose performance is determined both by the individual performance of each institution, but also by how they interact with each other as elements of a collective system.

Innovation-Based Economic Development Strategy- An economic development strategy that reflects an understanding of the key role innovation plays in supporting economic growth. Such strategies would recognize that a region and its firms compete in a global economy that is increasingly driven by knowledge-based assets, rather than assets like access to raw materials or low-cost labor. Close synonyms would include “knowledge-based” or “tech-based” economic development strategies.

Innovation Hot Spots- Regions where institutions foster knowledge-transfer, collaboration, and support for entrepreneurial start-ups. Innovation hot spots combine and accelerate the deployment of key elements of the innovation ecosystem by building on cutting edge research, providing a training ground for next-generation innovators, creating a crossroads between researchers and businesses, and linking innovators with early-state funding and experienced innovation mentors.

Incentives - Globalization has led to competition between nations, regions, and communities to attract and retain businesses that are moving or expanding.

Incentives are tools used to influence business decisions about where new investment will take place. Economic development incentives can be either financial or non-financial, such as tax exemptions and credits or workforce training and public infrastructure improvements. The kind of incentives offered depends both on the community and the business with which it is bargaining. Before offering an incentive, an economic development practitioner should analyze the cost and benefits of providing the incentives in terms of both dollars and social returns.

Infrastructure- Infrastructure encompasses existing transportation, communication and utility networks. Rebuilding the physical infrastructure of a community improves the local business climate and is critical to the redevelopment of distressed neighborhoods. Infrastructure gets people to their jobs and goods and services to their markets. Many distressed neighborhoods suffer from inadequate infrastructure, decreasing their access to economic opportunities and their ability to integrate into wider city, national, and international markets. Programs to build roads, provide water and waste removal, and offer telecommunications services all bestow substantial economic benefits such as job and business creation and retention to a community. Additionally, modernizing physical infrastructure can help improve the image of a distressed neighborhood.

Knowledge-Driven Economic Development- Employing a region’s knowledge and educational resources to gain economic advantage in the global economy.

Neighborhood Economic Development- Neighborhood revitalization seeks to improve a neighborhood's physical, economic, and social conditions to improve the overall quality of life and economic opportunities for neighborhood residents. Like downtown development, it includes a range of initiatives that target multiple - but complementary - development goals including business development, infrastructure improvements, workforce training, facade improvements, amenity development and property reuse. Critical to this process is the revitalization of commercial areas, because it creates jobs for local residents, provides goods and services to the local market - thereby keeping local dollars in the community - and improves the overall image of the neighborhood by signaling that business can succeed there.

Poverty- The most common method used to define poverty is income-based. A person is considered poor if his or her income level falls below some minimum level necessary to meet basic needs. This minimum level is usually called the “poverty line.”What is necessary to satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and place, and each country uses lines that are appropriate to its level of development, societal norms, and values. In the United States, the federal government has a set of lines, or thresholds, that are compared with families’ resources to determine whether or not they are poor. The thresholds differ by the number of adults and children in a family and, for some family types, by the age of the family head. The resources are families’ annual before-tax monetary income.

Public-Private Partnerships- Cooperative ventures between the public and private sectors, built on the expertise of each partner that best meets clearly defined public needs through the appropriate allocation of resources, risks, and rewards. The essence of a public-private partnership arrangement is the sharing of risks. Central to any successful public-private partnership initiative is the identification of risk associated with each component of the project and the allocation of that risk factor to the public sector or the private sector, or perhaps involving a sharing of risk. Thus, the desired balance to ensure best value (for money) is based on an allocation of risk factors to the participants who are best able to manage those risks and thus minimize costs while improving performance.Best value is also enhanced by the social benefits (i.e., educational or health) accrued through the ability to deliver programs earlier than otherwise might have been possible. The opportunity and ability to share resources with the private sector through a long-term relationship allow the government to pursue initiatives that may not otherwise have been possible for several years, had a partnership arrangement not been achieved.

Quality of Life- Quality of Life is the economic well being, life style, and environment that an area offers. Improving the quality of life is the ultimate aim of economic development programs and initiatives. A balance has to be maintained between encouraging the growth of the local economy, while limiting impacts upon the quality of life.

Real Estate Redevelopment- Vacant and older buildings blemish many urban neighborhoods, contributing to blight, crime, and perceptions of the neighborhood as an undesirable place to live and do business. Vacant buildings lead to disinvestment. The Urban Land Institute estimates that the United States holds 876 million square feet surplus of industrial space, which present threats to neighborhoods if left unattended, and opportunities if reused or redeveloped.

Rural Economic Development- There is no single definition of rural economic development. Typically it is described in terms of its objectives: these are most commonly described as the creation of jobs and wealth, and the improvement of the quality of life in rural areas. Rural economic development can also be described as a process that influences the growth and restructuring of an economy to enhance the economic well-being of rural communities. For rural communities, the challenges are very different from those in urban areas. Small-scale, low-density settlement patterns make it more costly for rural communities and businesses to provide critical services.

Region- A geographic area, typically comprising multiple communities and jurisdictions but sharing a common identity; a localized labor and trade market; and transportation and distribution networks. The interdependency within a region form the basis for its definition, as well as for the pursuit of regional governance to increase regional competitiveness. Regional Competitiveness A region’s vigorous pursuit of a competitive edge in a rapidly changing global marketplace. Building and retaining this edge involves three steps: (1) understanding the region’s critical economic assets; (2) identifying the best market opportunities for the region; and (3) crafting a strategy that exploits one to seize the other.

Regional Governance- How a region thinks and acts as a region. Regional governance is the method by which relations and interactions within regions are coordinated through a combination of mechanisms and network-like structures involving public and private actors. In economic development terms, governance relates to the development of goals, strategies, capacities, and instruments to advance sustainable regional development.

Strategic Plan for Economic Growth- A plan formulated from an analysis of a community’s and region’s distinct competitive assets/advantages, matching the exploitation of these assets/advantages to market opportunities within the global economy.

Site Selection- Site selection is the process by which firms find new locations for business facilities or expansions of their operations. Each year, more than 15,000 localities seek to attract the estimated 100-200 locations that take place. New facilities often mean new jobs, new investment, and an enhanced tax base. During location, businesses look to minimize start-up and operating costs while maintaining close proximity to their suppliers and customers.

Small Business Development- America's 25 million small businesses employ more than 50 percent of the private work force, generate more than half of the nation's gross domestic product, and are the principal sources of new jobs in the U.S. economy. The importance of small businesses has led to improvements in the environment within which small businesses operate, with a proactive approach used to assist small business owners.

Smart Growth- Smart growth describes the efforts of communities to manage and direct growth in a way that minimizes damage to the environment, reduces sprawl, and builds livable towns and cities.

Sustainable Development- As described by the World Commission on Environment and Development, sustainable development is the process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations.

Technology-led Development- Technology-led economic development fosters the development of new technology-based products and encourages the deployment of technologies to the private sector.

Tourism- Tourism as an industrial sector encompasses portions of many other sectors including hospitality, transportation, retail, and entertainment. Tourism attracts temporary visitors to places where they purchase goods and services before leaving. For this reason, tourism is considered an exported commodity totaling more than $90 billion in 2000 nationwide. Both rural and urban localities based their visitor attraction strategies around favorable local advantages such as a climate, history, and cultural and natural resources, which attract visitors.

Transportation- Transportation moves people and goods from one place to another. The mode – train, truck, airplane or ship – moves within a medium of transportation: land, sea or air. Transportation enables the trade of goods and the movement of workers to occur; thus it is vital for economic development. The most popular mode of transport is automotive, with millions of cars and trucks using streets, roads, highways and interstates. Transportation is a key component of business climate and quality of life.

Underemployment- A condition where a portion of a community’s or region’s population is employed but individuals are not earning enough to maintain self-sufficiency.

Unemployment- Persons who had no employment during a reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the four-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed. The rate of unemployment is the ratio of unemployed to the civilian labor force expressed as a percent.

Venture Capital- Venture capital (VC) is professionally-managed equity money (money for stock), that is repaid by capital gains through the sale of stock. Investors are typically short- to intermediate-term investors. With average investments well over $1 million, venture capitalists seek high rates of return by investing in high-risk, early-stage businesses. These businesses must demonstrate the possibility of extremely rapid growth. Typical companies have demonstrated sales, but are not yet profitable. Venture capital promotes economic development because it allows new ideas and technologies to become profitable, creating wealth and jobs.

Workforce Development- Workforce development and/or training refers to community efforts to train individuals for specific jobs or industries. Training may cover everything from soft skills (work ethic, attitude, getting to work on time) to basic skills (literacy, numeracy) to specific job skills (carpentry or Web site development). Community workforce efforts may also include job placement assistance, resume writing, interview skills, and retention services such as legal advice and child care, that help people stay in a job once placed there. The goal of workforce training programs is to improve the quality and skill sets of individuals, to place them in jobs, and help businesses find an employee base in line with their needs. A good workforce training program, therefore, serves two customers: individuals and businesses.