Comparing economic development corporation and internal department models: Service delivery in Southern Ontario

Abstract

An increasing number of communities are investing in formal economic development departments or organizations, leading to debate over where the effort should be housed. The purpose of this study is to undertake a systematic investigation of two models of economic development service delivery: internal municipal department model and external corporation model. Both qualitative and quantitative methods are used, including in-depth interviews with economic development practitioners and empirical analysis.

The findings show that senior economic development professionals generally believe that the service delivery model matters, but there is disagreement on what operational areas are affected and how. Empirical analysis of the program areas and financial and staffing resources shows substantial overlap between internal and external organizations. However, comparing experiences in partnerships, governance, decision-making, and accountability indicates that there are differences between the two models.

The research also indicates that there are factors beyond the model that may be more influential: the size of the organization or where the decision-making power lies for the given situation may influence the speed of decision-making more than the model. Participants also identified the important role of leadership and people in creating a successful economic development organization.

Key words: Economic development organizations, corporations, departments, service delivery models