It goes without saying that risk-taking is inherent to any activity that has to do with starting up, expanding or relocating the operations of an enterprise. Any location that seeks economic development takes on a share of this risk when it overtly encourages and accommodates enterprise development. Risk is inherent in the enterprise and economic development process.
defined as inherent to any business activity definition of business risk taking defined
by beginning with the idiom it goes without saying that
risk management is as necessary on the community side of enterprise and economic development as it is on business side. For example, there is an awareness that the hunt for locations offering incentives that encourage enterprise development has been ongoing within the process since its beginning. It is not unusual to find argument against encouraging enterprise development through incentive offers in places where freedom of expression exist. Smart risk management is the only way to counter the argument; therefore, it must be intertwined with a best practices approach to enterprise and economic development.

There are plenty of examples of communities that lost economic development momentum because of poor risk management. In many cases it seems likely that when those places were at the top of their game the people in control simply failed to realize that risk management in economic development is a community responsibility comparable to efforts to achieve excellence within private enterprises. The bottom line comparison that makes the point is found in the .network glossary definition of voice of the customer. Also, see the definition of sustainable community to expand thoughts about how risk is naturally a part of development.

The Network offers the following basic management guidance for the community that wants economic development as well as for the risk taker in an enterprise:

1. Be prepared: Risk management controls things that reduce or eliminate negative impact. Having reliable information in hand that decision makers can trust is absolutely the first thing to considersee location data supplies.

2. Anticipate Risks: Identify a risk as early as possible. Networking is essential.

3. Categorize risks: Examples of categorized risks may be found in selection criteria organized to go along with project profiles distributed within site selection networks. Many places prepared to respond have websites organized with so called site selection standardssee location data standards.

4. Understand the context: In the case of an enterprise, risk can be addressed within the context of a business plan. The .network glossary defines various words and expressions related to risk management in both enterprise development and economic development. For example, in enterprise development there is the risk of choosing a site in a flood-prone areaflood plain is defined in the glossary. The risks of a search need to be managed in detail.

5. Contingencies: Risk management demands that what-if questions be asked.

Example (enterprise development): What if the union decides to strike? (Relocation happens because of actions taken by disgruntled or agitated employees.)

Example (economic development): What if workers and there employers stop getting along in our community? (Sustainability is threatened at anytime a community's workforce loses sight of what drives its economy or when its employer base doesn't respect the dignity of the worker.

Acknowledgement: Although unrelated to enterprise and economic development a reference that was helpful in organizing the five risk management categories above was a technical paper by Robert Armstrong and Gillian Adens.

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