3(b) Housing and Economic Development Sections

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EXPORTS AND IMPORT-REPLACEMENT For the Pequot Lakes economy to prosper in the coming years, it is important that community leaders understand the relationship between export industries(businesses that"export"goods and services outside of the community and,in exchange,"import"capital to the community)and import-replacement industries(those that serve the local market). It is easy to understand exports and import-replacement on a national scale.We export computer chips made in the United States to Europe.In this instance the chip is an exnort that brings outside capital into the country.We import strawberries from Peru.When we provide strawberries domestically instead of importing them from Peru, locally- grown strawberries become an imqort-realacement.American money now goes to American producers instead of being sent to Peru. The same thing happens at the local level.When someone from Pequot Lakes drives to Brainerd to buy furniture, Brainerd is exporting the furniture to us.Our money goes to Brainerd's market and the furniture comes to Pequot (imported).When that resident opts instead to purchase the furniture built in Pequot Lakes,then the furniture is an import-replacement. Instead of buying it from someplace in Brainerd,the furniture was bought and manufactured locally and the money stays in the community. The following table shows how this relationship has worked throughout the history of Pequot Lakes. Export Industries Import-Replacement Industries Early Logging Era Raw wood and lightly Services and goods for lumberjacks and iprocessed wood materials those in support of the forestry industry ' (e.g,shoe repair,clothing sales,bars and ; restaurants) Agriculture/Tourism Agriculture,Tourism Services and goods for agriculture,tourists Era service,fishing experience and support services for the tourism and-to a lesser degree- industry(e.g.fishing guides,bait stores, fish tourist retail shops) Rapid Development Land as well as land Services and goods for new residents and ' iEra development and support services for land development � construction-related activities(e.g.title companies,real estate I� services offices,surveyors,government services) Next Era Unlrnown Unlrnown The first way a neighborhood center like Pequot Lakes can create a prosperous local economy is to create an environment where competitive, import-replacement businesses can flourish. The second way is to increase the number of exporting businesses so as to bring new capital into the city. PRINCIPLES A healthy, ongoing public/private partnership between the City of Pequot Lakes and the businesses located inside the city limits must be based on an understanding that each has a part in the process of creating export and import- replacement businesses.What the city government of Pequot Lakes can do is to create a framework for growth that provides the widest variety of local entrepreneurs the greatest chance for success.