What Is an Economic Development Organization? How Innovative EDOs Expand Economic Opportunity
An economic development organization, or EDO, is the public agency, nonprofit, or public-private partnership responsible for growing and strengthening the economy of a specific place: a city, a county, a region, or a state. EDOs recruit and retain employers, support local businesses, develop sites and workforce pipelines, and oversee public investments and financial incentives that dictate where capital and job opportunities are directed.
In most places, the EDO holds the public dollars, the land, the data, and the employer relationships that determine whether growth reaches a neighborhood or passes it by.
Types of Economic Development Organizations
Economic development organizations come in four common forms. Each operates with distinct decision-making dynamics:
A city or county economic development department is a unit of local government, funded by the general budget and accountable to elected officials.
A nonprofit or public-private economic development corporation (EDC) is a separate entity, often funded by a mix of public contracts and private membership, that can move faster than government and negotiate confidentially with prospective employers.
A chamber of commerce often houses the economic development function in smaller communities.
A regional organization, such as a council of governments or a federally designated Economic Development District (EDD), coordinates strategy across multiple jurisdictions.
Many of these organizations are funded in part by the U.S. Economic Development Administration (EDA), whose stated mission is "to lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy".
What Does an Economic Development Organization Do?
Economic development is the work of increasing a community's prosperity by growing its base of jobs, businesses, income, and tax revenue. An EDO is the organization that does this work deliberately.
The traditional EDO toolkit has six parts.
Business retention and expansion keeps existing employers in place and helps them grow.
Business attraction recruits new employers from outside the region.
Workforce development aligns training with the jobs employers need to fill.
Real estate and site development readies land, buildings, and infrastructure for investment.
Financing and incentives uses tax abatements, grants, and loans to close deals.
Marketing promotes the region to site selectors and investors.
While each function remains essential, contemporary EDOs have broadened their tools and tactics.
How Are Innovative EDOs Different From Traditional EDOs?
For decades, business attraction came first. The measure of an EDO was the size of the deal it landed: recruit an employer from outside, offer incentives, count the jobs announced. That approach can produce headlines without producing opportunity, because the jobs, contracts, and property gains often flow to people and firms outside the community.
The innovative EDO starts from a different question: how do we build on our region's assets and ensure that everyone in our region connects to that economic opportunity? That question shifts the work from attraction to asset building in four places.
Small business and entrepreneurship. The innovative EDO treats the businesses already operating in a community as its primary growth engine, with technical assistance, access to capital, and procurement pathways designed for resident-owned firms.
Supplier firms and anchor procurement. Hospitals, universities, utilities, and large employers spend enormous sums every year. Redirecting even a fraction of that spending to local and minority-owned suppliers builds firms that hire locally and stay.
Commercial corridor development. Instead of a single large site, the innovative EDO invests in the main streets and neighborhood corridors where small businesses cluster, treating storefronts and local ownership as economic infrastructure.
Partnership with community-based organizations. Community-based organizations (CBOs) hold the trust, reach, and on-the-ground capacity. The innovative EDO works with them as partners to achieve economic outcomes in the region.
How Do Economic Development Organizations Partner With Community-Based Organizations?
Partnership is where the innovative EDO is tested, because EDOs and CBOs have historically operated in separate worlds with different timelines, funders, and definitions of success. The Economic Partnership Alliance, led by NGIN with IEDC, LISC, and the HBCU Community Development Action Coalition and supported by the U.S. EDA, was built to close that gap. Over two cohorts, the Alliance provided twelve months of partnership assistance to 24 coalitions of EDOs and CBOs in 22 locations, on the premise that sustainable regional growth requires both institutional expertise and community knowledge.
What that looks like in practice is documented in the Alliance Playbook's case studies. In Sacramento, the city's Office of Economic Development worked with the Mutual Assistance Network, the Greater Sacramento Urban League, and the Del Paso Boulevard Partnership on a corridor strategy in Del Paso Heights, and the partners concluded that the partnership itself was the central project. In Omaha, the regional planning agency began reshaping its federally required economic development strategy around neighborhood business support, giving community-based work institutional standing.
Across all 24 coalitions, the Playbook's Core Insights identify four building blocks that separate partnerships that last from partnerships that fade: trust, narrative, facilitation and project management, and operational discipline. In the Playbook's words, durability does not come from a single decision or the launch of a promising project. It comes from repetition.
Economic Development Organization FAQ
What does an economic development organization do? An EDO grows and strengthens a local or regional economy by retaining and attracting employers, supporting small businesses, developing workforce pipelines and sites, and managing public incentives. The innovative EDO also builds local assets—small businesses, supplier firms, commercial corridors, and community partnerships—so that growth benefits existing residents.
What is the difference between an EDO, an EDC, and an EDD? An economic development corporation (EDC) is one type of economic development organization: usually a nonprofit or public-private entity that operates outside direct government control. An Economic Development District (EDD) is a multi-jurisdictional planning body, usually spanning several counties, that the EDA designates to lead regional economic development planning and produce the region's Comprehensive Economic Development Strategy (CEDS). EDO is the umbrella term that also covers government departments, chambers of commerce, and regional districts.
Is the EDA an economic development organization? The U.S. Economic Development Administration is a federal agency within the Department of Commerce. It funds and supports local and regional EDOs through grants and designations but does not carry out local economic development itself.
What is economic development? Economic development is the deliberate work of expanding a community's prosperity through more and better jobs, stronger businesses, higher incomes, and a broader tax base. Community-driven economic development adds a second test: whether the people historically excluded from growth are leading, shaping, and benefiting from it.
The innovative EDO is defined by the partnerships it builds, and the Alliance Playbook is NGIN's guide to building them. Start with Core Insights for the four building blocks that make EDO and CBO partnerships last, read the case studies to see nine cities putting them to work, and use the Partnership Strength Activity Guide, a reflection workbook for EDO and CBO partners, to assess where your own partnership stands today.
