Economic Development Agencies structures: Like it was 25 years ago

Local Economic Development Agencies and Chambers of Commerce are not yet organized to optimize access to markets. In some way they are operating like community banks were operating 25 years ago.

25 years ago, there was about 14 000 community banks. Between 1994 and 2003, the number of community banks fell from 9600 to 7300; at the same time, branch banking nearly doubled with about 86 branch banks totalizing about 40 000 branches in 2003.

Since then, the traditional image of the brick and mortar bank where the bank manager was understanding the local market and had strong customer relationships changed dramatically in good part because of technology and regulatory changes. Automated teller machines (ATMs) proliferated; the Internet gave rise to virtual banking. Banks developed centralized call centers to handle customer service issues and to initiate transactions. The way banking was brought to local markets changed  dramatically because of technology and convergence.

The same is about to happen for local Economic Development Agencies and Chambers of Commerce. Currently federated through regional and local office. They are not yet organized to optimize access to markets. In some way they are operating like community banks were operating 25 years ago (if not 50 years ago). Still today, thousands of economic development agencies operate as "brick and mortar centric" organizations where directors understand their local market and have strong customer relationships locally.

But things change. Economic Development Departments and head offices can witness a drastic change in the way international communications are performed. They have realized that preparing trade shows and commercial mission are not sufficient to attract commerce, investment and contracts.

We can predict that media and consulting convergence is about to change the geographic federation of economic development agencies by region, states and provinces and cities.  Instead of being focused on local markets, agencies will become focus on export markets using the new media and virtually federating with flexibility under diverse criteria and categories.

Under economic pressure governments will be forced to accelerate these changes and to put away the dominant organization architecture based on brick and mortar. The convergence of digital media will change the current balance between political marketing and business marketing and accelerate the divide between these functions.

The private sector has already taken a large part of international communications channels; this trend shall affect the way economic development agencies will perform in the near future.