Small city, big impact: why economic development is the best tool to tackle COVID-19

Local government is not typically known for its creativity or nimbleness. But like all organizations—public and private—the pandemic exposed a myriad of challenges and opportunities. One opportunity and challenge for all cities that became immediately obvious in March 2020 was the importance of a strong, responsive and innovative economic development program. State and local governments needed to expeditiously mobilize resources to support the small and independent business community. With support from Governor Ralph Northam’s office, it’s possible that local governments in Virginia helped save a number of the state’s businesses—especially small businesses—by quickly launching new funding programs, introducing policies around outdoor dining, coordinating webinars to counsel companies remotely and developing state-of-the-art initiatives to encourage safe operations.

The pandemic revealed just how important it is for cities, especially smaller cities, to have an economic development infrastructure focused on engagement with the local business community and the health of small businesses. Previously, economic development agencies prioritized attracting new business, but the pandemic pushed these teams to refocus their efforts on creative ways that help existing businesses.

Moving fast with funding

Supporting local businesses with funding is the fastest and most effective way to offer immediate support. CARES Act funds—allocated to cities by the state and federal government—allowed local governments to build new teams dedicated to business engagement and program administration. As an example, Fairfax City, Va., launched two rounds of ReConnected Grants totaling approximately $2 million and awarded grants to more than 250 businesses. Importantly, we ensured that at least two thirds of recipients were veteran, minority or woman-owned businesses—an important step to safeguard the most vulnerable businesses within our community from the impacts of the pandemic. Our new $100,000 ReConnected+ program and $300,000 Winter Preparedness Initiative also provided economic relief to many local businesses by subsidizing consumer gift card purchases from local vendors and providing the funding companies needed to continue outdoor dining into the colder months.

The federal government’s newest COVID-19 relief bill, the American Rescue Plan, which was signed into law on March 11, 2021, directs more aid to state and local governments, including support for small businesses. This legislation is eagerly anticipated by cities and may enable the continuation of the new programs supporting our businesses.

While federal and state funding has been crucial to helping businesses stay afloat, we know that pandemic-related funds won’t be available indefinitely. What should remain, however, is the public sector’s role in establishing strong relationships with our small businesses and facilitating funding from venture capitalists, bank loans and grants. At the very least, we need to compile those funding resources on a digital platform for all businesses to easily access and rely on the infrastructure developed during the pandemic to continue offering small business support.

More than money—adapting with safe and smart solutions

The pandemic also provided our team with an occasion to meet the moment. We immediately began restructuring existing programs to support the new realities facing our city’s businesses. We worked to create a grab-and-go restaurant week and generated new programs distributing safety kits with essential supplies. We restructured our website to become a hub for all COVID-related information and an essential tool in administering our programs, ultimately increasing daily website visitors by 600 percent.

We also made a conscious decision to take advantage of the crisis by expediting pilot projects with new technologies. By launching a robot delivery program with Starship Technologies (its first collaboration with an American municipal sponsor) we developed a solution that brings our businesses and community together while limiting person-to-person contact. Our staff accelerated the timeline of this project from many months to three weeks. Fairfax City’s open embrace of new technologies has encouraged other businesses to reach out with pilot opportunities as well, meaning we not only addressed an immediate need, but opened the door for further innovation post-pandemic.

Gaining strength through support

Economic development teams can uniquely adopt a fast-paced, responsive, entrepreneurial approach to problem solving. The single greatest contributing factor to positioning an economic development agency for continued growth and prolonged recovery is a supportive political leadership team. At the onset of the pandemic, as preliminary impacts on the business community were becoming clear, the City Council promptly shifted gears and enabled our office to rapidly scale up employees and programs. Our expanded team gave us the capacity to communicate directly with businesses about important, time-sensitive programs and opportunities, while ensuring a broad range of businesses across the city received information clearly, regularly and fairly.

The pandemic further emphasized the vital role economic development teams play in the health and resiliency of a local economy. If 2020 has taught us anything, it’s this: small and medium-sized cities need to ensure that their economic development agencies build systems and programs to engage the business community as a partner and to establish responsive and lasting programs to aid in long term recovery. As we look to the future and post-COVID recovery, cities need to reassess their economic development strategies, prioritizing effectiveness and collaboration with responsive and innovative government partners to support their business communities.

Christopher Bruno is the director of Economic Development for the City of Fairfax, Va.