Economic Development Glossary
Accelerator / Business Accelerator
A program, often sponsored by a university or nonprofit organization, that works with entrepreneurs and start-up companies for a short and defined timeframe to help them reach the next phase in their growth.
American Rescue Plan Act (ARPA, ARP Act)
A $1.9 trillion economic stimulus program enacted by the U.S. Congress in March 2021. The EDA was charged with administering $3 billion of the ARP Act.
A concept describing the sustainable use of ocean and lake resources for economic growth that originated at the 2012 United Nations Conference on Sustainable Development.
In economic development, capacity building is the development or improvement of community assets that businesses need to succeed.
For purposes of grants administration, the Economic Development Administration defines coal communities as places or regions that can reasonably demonstrate how changes in the coal economy have resulted or are anticipated to result in job losses and layoffs in any coal-reliant commercial sector.
Comprehensive Economic Development Strategy (CEDS)
A strategy-driven plan for regional economic development. A CEDS is the result of a “regionally-owned” planning process designed to guide the economic prosperity and resiliency of an area or region. It provides a coordinating mechanism for individuals, organizations, local governments, and private industry to engage in a meaningful conversation and debate about the economic direction of their region. (For more information, click here.)
Cluster / Industry Cluster / Innovation Cluster
Networks of thematically related companies and institutions in close, geographic proximity that — through competition and collaboration — have the potential to produce more efficient economic output as a group than they could individually. Examples of established clusters include Silicon Valley (technology), Detroit (automotive engineering), and the Boston Life Sciences Corridor (biotechnology and pharmaceutical industry).
Clusters can include suppliers, manufacturers, and institutions that provide education and technical services to support those businesses.
Community of Practice
“A group of people who share a concern or a passion for something they do and learn how to do it better as they interact regularly,” as first defined by Jean Wave and Etienne Wagner in their 1991 text Situated Learning. In the economic development sphere, communities of practice are often built around formal structures and organizations designed to support participants in the creation, preservation, and dissemination of practical knowledge.
A process of participatory economic development in which local stakeholders are resourced and empowered by agencies and service providers to improve their communities.
Cost Allocation Plan (CAP)
A document that explains an organization's methodology in identifying, accumulating, and allocating general or centralized costs to its constituent departments and agencies.
Creating the conditions for economic growth and improved quality of life by expanding the capacity of individuals, businesses, and communities to maximize the use of their talents and skills to support innovation, job creation, and private investment.
Economic Development Administration (EDA)
A bureau within the U.S. Department of Commerce that is the only federal government agency focused exclusively on economic development. It was established in 1965 and is led by the Assistant Secretary of Commerce for Economic Development.
Economic Development District (EDD)
Multi-jurisdictional entities, commonly composed of multiple counties and in certain cases even cross-state borders. They help lead the locally based, regionally driven economic development planning process that leverages the involvement of the public, private, and nonprofit sectors to establish a strategic blueprint, known as a Comprehensive Economic Development Strategy (CEDS), for regional collaboration.
Economic Development Representative
Economic Development Representatives (EDR) are the locally based representatives of EDA. EDRs work with local, state, and Tribal governments, as well as other organizations in their assigned areas to apply economic development practices to local needs by developing plans and projects for federal collaboration and investment.
Equity is the consistent and systemic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities. Equity is one of EDA’s seven investment priorities.
Foreign Direct Investment (FDI)
Foreign direct investment (FDI) is a category of transnational investment in which an investor from one country establishes a controlling commitment in a business or enterprise located in a second country. Foreign direct investment in the United States benefits workers and the American economy; the U.S. has been the world’s largest recipient of FDI since 2006.
The simultaneous facilitation of economic growth and sustainable, inclusive development, all while reducing environmental degradation and the impacts of climate change.
Incubator / Business Incubator
A program, often sponsored by a university or nonprofit organization, that provides support and guidance to start-up companies during the embryonic phases of their development to support job creation and retention. Support can include technical assistance, facility access, financing, mentorship, and networking opportunities.
The term is defined in 18 USC § 1151 and 40 CFR § 171.3 to include the reservations of federally recognized Tribes, dependent Indian communities, and certain other areas.
Ethnic groups descended from the first known inhabitants of a geographic area. For purposes of grants administration, the Economic Development Administration defines indigenous communities to include federally recognized American Indian or Alaskan Native tribal entities (including American Indian tribes and Alaskan Native villages). It also includes public or private non-profit organizations or associations serving Native Hawaiians; or, public or private non-profit organizations or associations serving Native Pacific Islanders of Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau.
Creation of new products, services, or processes, or the recombination of existing products, services, or processes in new ways that add value. Importantly, innovation can occur in any sector, and within all aspects of the economic development ecosystem.
Investment Review Committee
Ad hoc panels periodically convened by EDA to evaluate grant applications. Most IRCs are composed of at least three EDA civil servants who evaluate the merits of each application and determine how closely an application aligns with statutory program requirements.
National Advisory Council on Innovation and Entrepreneurship (NACIE)
An advisory council that advises the U.S. Secretary of Commerce on growing equitable economic prosperity by accelerating innovation and catalyzing technology entrepreneurship. The council also facilitates federal dialogue with the innovation, entrepreneurship, and workforce development communities. NACIE members are appointed by the Secretary of Commerce.
National Disaster Recovery Framework (NDRF)
Enables effective recovery support to disaster-impacted states, Tribes, territorial and local jurisdictions. It provides a flexible structure that enables disaster recovery managers to operate in a unified and collaborative manner. The NDRF focuses on how best to restore, redevelop and revitalize the health, social, economic, natural and environmental fabric of the community and build a more resilient nation. EDA is the coordinating agency for the Economic Recovery Support Function (ERSF) under NDRF.
Notice of Funding Opportunity (NOFO)
The official announcement of the availability of grant funding. Most competitive U.S. government grant opportunities have a NOFO that includes the grant’s evaluation criteria, applicant eligibility, submission deadline, and other pertinent information. The Economic Development Administration publishes NOFOs on grants.gov.
Office of Indian Economic Development
As part of the Bureau of Indian Affairs, the office supports the economic development of American Indian and Alaska Native (AIAN) communities by offering access to capital through grant opportunities and loan guarantees, and by providing technical assistance to tribes.
Agencies of the federal government collect and report on performance measures as required by the Government Performance and Results Act of 1993, as amended by the GPRA Modernization Act of 2010. For infrastructure investments, EDA has a performance goal of promoting private enterprise and job creation, which it measures by the amount of private sector dollars invested in a community as the result of a grant, and the number of jobs created or retained by that grant. Non-infrastructure capacity building grants are evaluated using other criteria.
Quality Job (or “Good-Paying Job”)
A job that exceeds the local prevailing wage for an industry in the region, includes basic benefits (e.g., paid leave, health insurance, retirement/savings plan) and/or is unionized, and helps the employee develop the skills and experiences necessary to advance along a career path.
In the context of economic development, resilience is the ability of a business, sector, or area to avoid, withstand, and recover from a major disruption to its economic base. Economic resilience is different from, but can be related to, environmental resilience. Recovery and resilience is one of EDA’s seven investment priorities.
A regional economy is a subnational economy defined by its spatial characteristics, or the geographic proximity of its components to each other. By contrast, a sectoral economy is defined by shared business activities.
Regional Economic Development Summit (REDS)
A convening of stakeholders that EDA hosts and is designed to optimize the investments of multiple federal economic development resources (along with those from state and local sources), supporting multifaceted projects and generating diverse, innovative economies, sustained economic growth, and broad prosperity for communities across America. The Office of Management and Budget has designated EDA as the lead integrator of federal economic development resources.
Regional Workforce Training System
A system that fosters and supports multiple sectoral partnerships across several industries.
Revolving Loan Fund (RLF)
Pools of capital available for lending. As loans are repaid, the capital is returned to the fund and then reloaned to another project. RLFs are evergreen sources of funding that can be continuously recycled to support different projects in perpetuity. They are often managed by governments and nonprofit organizations to ensure that small businesses and enterprises in sectors not typically eligible for commercial lending can obtain access to working capital for expansion and growth. EDA provides grants to eligible recipients to capitalize or recapitalize RLFs.
A partnership of employer(s) within one industry that brings government, education, training, economic development, labor, and/or community organizations together to focus on the workforce needs of an industry within a regional labor market. Sectoral partnerships prepare workers for jobs that employers need filled.
Small Business Administration (SBA)
A cabinet-level federal agency dedicated to small business. It provides counselling, capital, and contracting expertise to the nation’s small businesses.
An approach in economic development which posits that economic vitality, environmental and climate resilience, and quality of life are closely linked through the global ecosystem. Environmentally-sustainable development is one of EDA’s seven investment priorities.
The process of providing targeted support to an organization with a development need or problem.
Technology-Based Economic Development
Economic development planning or implementation projects that foster regional knowledge ecosystems that support entrepreneurs and startups, including the commercialization of new technologies, that are creating technology-driven businesses and high-skilled, well-paying jobs of the future. Technology-based economic development is one of EDA’s seven investment priorities.
University Center (UC)
EDA-designated resource centers housed at universities and institutions of higher learning. They collaborate with other EDA partners, such as Economic Development Districts (EDDs), by providing expertise, applied research, and technical assistance to develop, implement, and support regional strategies that result in job creation, high-skilled regional talent pools, and business expansion in a region’s innovation clusters.
Venture Development Organization (VDO)
A Venture Development Organization (VDO) is a state or nonprofit entity that contributes to regional or sector-based economic prosperity by providing services for the purposes of accelerating the commercialization of research. VDOs are defined in 15 USC § 3722(a)(4).
Economic development planning or implementation projects that support workforce education and skills training activities directly connected to the hiring and skills needs of the business community and that result in quality jobs. Workforce development is one of EDA’s seven investment priorities.
Any service that removes barriers and supports a trainee in completing workforce training activities. Examples include transportation, language support, financial coaching, childcare, career navigation and coaching, access to technology.