Radical Reset: How Would We Develop Economic Development Today?

The discussion about the future of economic development will take place. The only question is who will initiate it. Are economic development agencies waiting for treasurers, politicians, supervisory board members, or shareholders to eventually ask, Which services will still be affordable in the future? Or ask yourselves this much more interesting question first:

If we could start over again today—would we actually set up our economic development program the same way all over again?

The financial picture is now clear: According to the Federal Statistical Office, Germany’s municipal core and supplementary budgets closed 2025 with a financing deficit of 31.9 billion euros—the highest figure since German reunification. In the 2026 KfW Municipal Panel, 44 percent of municipalities rate their financial situation as “poor”; nine out of ten expect their finances to deteriorate. This does not automatically mean that economic development funding must be cut. It does, however, mean that questions regarding impact, priorities, and the allocation of resources are likely to gain in importance.

Imagine for a moment that your economic development agency didn’t yet exist. No organizational chart. No job descriptions. No projects that have developed over many years. No event formats that have “always” been held. No responsibilities that have evolved over time.

All you have in front of you is a blank sheet of paper. On this sheet are, first and foremost, the economic challenges facing your region: businesses and their transformation, investments, skilled workers, land, startups, innovation, digitalization, city centre, internationalization—or perhaps entirely different issues.

What would this economic development initiative look like? And above all: Would it result in exactly the kind of economic development initiative you have today? A “no” would by no means automatically be a negative assessment of the current organization. Many economic development agencies have grown over the course of years or decades. New responsibilities have been added, projects have become established, expectations have shifted, and new policy goals have been formulated. Just because something was once right doesn’t automatically mean it’s wrong—but it also doesn’t automatically mean it’s still the best answer.

When financial leeway becomes tighter, a classic reaction comes to mind: cutting budgets, reviewing operating costs, canceling events, merging projects, or not refilling vacant positions. This may be necessary in individual cases. However, it does not answer a more fundamental question: Are we currently optimizing an organization that we would even build the same way under today’s conditions?

Maybe that’s why we should reverse the order and not start by asking, “Where can we cut costs?” Instead, we come to realize:

• What impact do we actually want to achieve through economic development in this location?
• Next: What tasks and services do we need to achieve this?
• And only then: What organization, what people, what partners, what technology, and what financial resources are needed to achieve this?

This turns a question of cost-saving into a question of design.

This is where the thought experiment gets interesting—and perhaps a little uncomfortable as well. For it raises many questions about the role, structure, and impact of economic development:

• Which services offered by an economic development agency would we recreate exactly the same way today?
• Which ones would we change?
• Which tasks have become more important in recent years?
• Which new tasks might be missing entirely?
• What could other stakeholders do better?
• Which processes could be handled digitally today?
• In what areas can artificial intelligence relieve employees of routine tasks?
• And finally, there’s also this question: Which project might we not start over again today?

The point here is explicitly not to eliminate as many tasks as possible. The result could just as easily be a significant expansion of certain services or the creation of entirely new offerings:

Perhaps in the future, a location will need fewer resources for traditional event formats, but more for proactive portfolio development. Perhaps standardized funding information can be made available largely in digital form, while complex corporate projects require more intensive in-person support. Perhaps certain tasks no longer need to be handled in-house because network partners are better equipped to take them on.

This thought experiment takes on a new dimension when it’s not just the economic development agency itself that’s given a blank slate. What happens if management and the team, on the one hand, and the key stakeholders, on the other, first answer the same question independently of one another—namely:

What impact should economic development efforts have on our region in the coming years?

This could reveal some interesting differences. Perhaps the economic development agency views the transformation of the business landscape as one of its most important future tasks, while its stakeholders primarily expect new businesses to set up shop. Perhaps a service is viewed internally as indispensable, yet is hardly a priority for the owners. Or, conversely, political stakeholders may expect results for which hardly any resources have been made available so far.

Such differences would not prove that one side is right and the other is wrong. Rather, they would mark the beginning of an important (possibly moderated) discussion. After all, economic development can only be effectively managed if it is as clear as possible what impact is actually expected from it. And anyone who expects results must also be prepared to set priorities.

The greatest opportunity presented by this thought experiment may lie in the proactive approach taken by economic development agencies: They can wait until the budgetary situation, politicians, top administrators, or shareholders raise questions about costs and effectiveness. Or they can take the initiative themselves and say, “We’re putting ourselves to the test.” Not because we think our work is wrong, but because we want to know whether we can achieve even more for our region in the future with the resources we have.”

And with that, the role changes. Economic development is no longer merely the subject of a potential consolidation discussion, but a key contributor to it. The perspective also shifts for its stakeholders. The crucial question is then no longer solely: How much economic development can we still afford in the future? But rather:

What impact do we want to have on the economic development of our region—and what kind of economic development support do we need to achieve that?

This shift in perspective is important. After all, the result may not simply be “less.” Perhaps processes can be digitized, tasks consolidated, or services provided in collaboration with partners. Perhaps this will lead to savings in resources. But perhaps it makes more sense to invest some of those resources in new initiatives. Increased efficiency does not necessarily mean cutbacks. It can also be an investment in the future.

This thought experiment would have been interesting even a few years ago. Digitalization and artificial intelligence add an extra dimension to it. That’s because today, for nearly every service, we can ask a question that wasn’t possible before: How would we organize this task if we were developing it from scratch today?

Does every piece of information have to be provided in person? Does every business require the same level of support? What early warning signs might indicate investment opportunities, difficulties, or the need for transformation? Which routine processes can be automated? Where does technology create the flexibility that in-person business development needs to handle complex cases?

AI does not replace economic development. But it changes the ways in which economic development agencies can use their limited resources. And that is exactly why it belongs on the blank page.

Of course, in the end, we have to talk about money, too. But perhaps we should do so at the end, rather than at the beginning. Once it’s clear what impact a location can expect, what services are needed to achieve that, and how those services can be organized effectively today, we can ask in all seriousness:

• How much does this model cost?
• Where are opportunities for efficiency gains?
• Where does value get created?
• What resources can actually be saved?
• And which ones might be better suited for new future projects?

The outcome of such a process need not, therefore, be “less effective economic development.” Rather, the goal would be economic development whose tasks, resources, and organization are aligned as consistently as possible with the desired impact for its location.

No one rebuilds an economic development agency from scratch every year. And, of course, well-established organizations can’t simply be wiped out and restarted. But that’s not the point. At first, the blank page is merely a space for free thought. For a moment, it allows us to avoid making existing structures the starting point for every consideration.

Especially in economically and financially challenging times, this could present an opportunity. After all, the alternative would be to wait until changes are demanded from outside before even considering them.

Perhaps you should actually start with a blank sheet of paper. Don’t write down what your economic development agency is doing today. To begin with, just write down what economic changes you want to achieve in your community over the next five years.