By Amy Biemiller

Broad strokes won’t paint a pretty national economic development picture. What’s needed is a detailed application of business development on the local level says Steve Mercil, president and CEO of RAIN Source Capital. It’s a ‘ground-up’ initiative that is gaining momentum.

“We’re seeing most economic development programs now recognizing the importance of working locally, focusing on local business for a sustained improvement to the communities they serve,” he says. “It’s a healthy trend that focuses on supporting and improving businesses that already are in the community, not just spending to attract and relocate businesses from elsewhere.”

Mercil sees regional level cooperation as vital to community economic improvement.“There’s positive recognition of the value of a regional economy with a base in the local community. Regions are now working together for efficient knowledge sharing, which is resulting in a flow of capital and expertise,” he says. It’s these regional efforts that are priming the pump for local community economic development.

“We’re seeing results that include loan programs being developed to target specific local business, and recognition of the impact of equity financing at the local entrepreneurship level for high growth ideas,” he says.

Mercil believes a community-based approach is the key to sustained economic development and created his company around that belief. RAIN Source Capital organizes community business leaders to form angel funds that not only build the capacity for local wealth creation and job growth, and also enhance investor returns. “We’re a different type of distribution system that provides an organized process to empower individuals to get together and support their local entrepreneurs,” he says.

While capital investment is important, money won’t turn a local economy around if the environment isn’t sound. Key to a healthy community environment is leadership that understands the importance of partnership. “It takes a lot of like-minded people to work together to successfully strengthen a local economy,” Mercil says. “One of the most important aspects to a healthy environment for community economic development is having local leaders who want to make a difference and are able to recognize opportunity.”

Also important to the community effort is a critical mass of education, finance, commerce and/ or healthcare centers that serve the larger region. These centers form the economic base for the community, bringing in revenue that support other services. It is then important for a community to have local establishments, where residents can spend locally.”These critical centers and local establishments become the assets of the community,” Mercil explains “which can be leveraged to develop the economic base farther through investments to recruit and nurture technology companies into the community, and help established enterprises grow.”

Editor's Note:  Steve Mercil is the current Board Chair for NASVF.