By Audrey Grace Hacker

A community's most valuable assets are its people and businesses that already call it home. However, in the race to attract the next big company or "hot" industry, existing businesses often get overlooked. While new business attraction is a critical component of economic development, business retention and expansion are at the foundation of a community's sustainable, long-term growth.

Local companies are not just employers but are integral parts of the landscape of a community as they've built relationships with local leaders, invested in workforce development, and often partnered with technical schools, community colleges, and universities to create tailored programs to meet their workforce needs. These relationships create a more skilled workforce often with the ability and desire to live and work closer to home.

Business retention and expansion must take priority as global economic forces and shifting trade policies reshape the economic and industrial landscape. Tariffs and geopolitical trends are shifting supply chains, causing many companies to regionalize supplier networks, leading to some networks locating primarily across the Americas. This shift could cause some companies to expand operations within the Americas and at current plants. Communities that prioritize business retention and expansion efforts will be in the best seat to capitalize on this shift.

Economic developers and local leaders proactively engaging with existing businesses in their communities often uncover important insights, such as shifting supplier networks, workforce training gaps, workforce needs, or future expansion possibilities. These conversations allow communities to prepare to meet the needs of their current businesses. Whether it's upgrading infrastructure, securing land for expansion, guiding conversations with local education leaders, or applying for funding assistance to help meet these needs, the insights gained through conversations with existing businesses allow communities to be proactive instead of reactive.

Additionally, existing businesses are often the best ambassadors for a community. Their success stories attract others and reinforce your community's reputation with new companies or families looking to locate in an area where businesses and individuals thrive. Retaining and expanding existing businesses strengthens a community's tax base through property, income, and insurance premium taxes, creating the opportunity for sustained high quality of life that benefits everyone.

The impact of prioritizing business retention and expansion is already evident across several states. For example, from January to December 2024, South Carolina announced $8.19 billion in total capital investment, of which $5.38 billion was accounted for from expansion projects by existing industries. North Carolina reported $16.1 billion of investment during the same period, with $7.7 billion tied to expansion efforts.

Beyond full state reports, major investment announcements across Kentucky and neighboring states further underscore the business retention and expansion trend including:

• A $922 million expansion by Toyota Motor Manufacturing Kentucky at their Georgetown, Kentucky plant

• A $70 million expansion by Pacific Manufacturing at their Fairfield, Ohio operation



• A $4.5 billion investment by Eli Lilly and Company to expand their investments in Indiana with a new facility

These announcements and capital investment numbers are evidence of the critical role that existing businesses play in driving economic growth. As communities engage with current companies, they not only retain community anchors, but they also unlock opportunities for reinvestment.

At MWM, we believe in today's evolving economic landscape, business retention and expansion are essential. The companies already invested in your community are your strongest partners in seizing new opportunities and continuing to build on what has already been established.