Community Economic Development (CED)
United States Developments in 2025
Nationally, community economic development in 2025 emphasized inclusive growth – ensuring that small businesses, cooperatives, and local entrepreneurs are at the heart of economic recovery. Small Business Development: With the economy stabilizing, attention turned to helping small businesses thrive, especially in underserved communities. The SBA (Small Business Administration) rolled out reforms to its 7(a) and 504 loan programs to simplify access, and made permanent some pandemic-era enhancements such as higher loan guarantees. Notably, the SBA’s Community Advantage pilot (which channels 7(a) loans through mission-driven lenders to reach minority- and women-owned businesses) was institutionalized as a permanent program in 2025, after demonstrating success in reaching businesses traditional banks often overlook. Many cities expanded technical assistance offerings – for example, Atlanta launched new “Business Navigator” one-stop centers in various neighborhoods, and Los Angeles funded a network of procurement coaches to help small firms bid on public contracts. Access to capital remained a challenge, but CDFIs and minority depository institutions filled the gap. National banks and tech companies also invested in small business support: Google continued its Digital Coaches program teaching digital skills to Black and Latino entrepreneurs, and several Fortune 500 firms committed to mentoring programs for small suppliers. Recognizing the importance of entrepreneurial ecosystems for inclusive growth, a number of metro areas (Detroit, St. Louis, Birmingham among them) created or expanded “innovation districts” that include startup incubators specifically for local residents, not just high-tech firms. The anchor institution model gained traction too – hospitals and universities in cities like Baltimore and Albuquerque set local purchasing and hiring targets to boost small businesses nearby, a strategy proven by pioneering efforts in Cleveland and Philadelphia.
Cooperatives and Employee Ownership: 2025 continued a budding trend of promoting worker cooperatives and employee-owned enterprises as tools for community wealth-building. Several states, including Massachusetts and North Carolina, passed or implemented laws providing technical assistance and even loan funds for business owners to convert their companies to employee ownership (such as ESOPs or co-ops) upon retirement. This addresses the “silver tsunami” of baby-boomer business owners and keeps businesses locally rooted. The U.S. Department of Agriculture also increased grants for rural cooperatives, supporting not just agricultural co-ops but new models like community-owned grocery stores in rural food deserts. Nationwide, interest in cooperative solutions to local needs grew – from cooperative childcare centers to community-owned renewable energy projects – often with support from philanthropy and national networks (e.g. the Democracy at Work Institute). By 2025, cities like New York and Austin had dedicated programs or funds to seed more worker co-ops, seeing them as a way to create quality jobs, particularly for immigrants and marginalized groups, and to anchor wealth in neighborhoods.
Inclusive Growth and Equity Strategies: In the policy realm, “inclusive growth” was a buzzword translating into concrete strategies. The Biden Administration’s Justice40 initiative (pledging 40% of benefits of climate and infrastructure spending to disadvantaged communities) drove agencies in 2025 to steer investments in clean energy, transit, and resilience projects into low-income areas – effectively marrying climate action with community economic benefits. The Investing in America agenda also featured new place-based programs: EDA’s Build Back Better Regional Challenge projects (awarded in late 2022) entered implementation in 2025, channeling funds to regions like South Chicago, Coalition Appalachia, and the New Orleans petrochemical corridor to develop new industries (e.g. electric vehicle manufacturing, sustainable aviation fuel) with an emphasis on local hiring and equity. Early signs from these projects showed job training programs ramping up and new facilities breaking ground, offering a template for equitable regional economic planning. Additionally, many cities updated their economic development plans to stress equitable development. For example, Washington D.C.’s 2025 Economic Strategy set explicit goals for reducing racial income gaps, increasing the number of Black-owned businesses, and investing in long-neglected corridors east of the Anacostia River. Similarly, tech hub cities like Austin and Seattle, conscious of displacement, launched funds to support legacy small businesses and prevent commercial gentrification in culturally significant districts. Another inclusive growth tool in 2025 was the proliferation of Community Benefits Agreements (CBAs) – large developments (stadiums, corporate headquarters, etc.) in cities from Indianapolis to San José were negotiated with input from coalitions to secure local hiring, affordable housing contributions, or other community benefits as conditions of approval. These CBAs ensure that big investments translate into tangible improvements for surrounding communities, aligning with the broader 2025 theme that economic development must be shared development.
Pennsylvania Developments in 2025
In Pennsylvania, community economic development initiatives in 2025 aimed at revitalizing local economies with an emphasis on small businesses, downtowns, and inclusive strategies, often backed by state support. Main Street Revitalization and Small Businesses: As noted in D3, the Main Street Matters program invested $20 million into 81 projects across the Commonwealth’s downtowns 85 72 . These projects, selected in 2025, ranged from physical improvements (streetscape upgrades, façade restorations) to grants for small businesses. For example, in a few small towns, funds went to establishing shared commercial kitchens and pop-up retail spaces to incubate local food entrepreneurs and artisans. In a mid-sized city like Johnstown, a Main Street Matters grant helped convert a vacant storefront into a co-working and small business resource center, providing affordable space and training for start-ups. Governor Shapiro emphasized that vibrant Main Streets are “the heartbeat of their communities” and critical to keeping local economies strong 75 76 . The state’s strategy here is clearly to empower localities to drive their own economic renewal by supporting their business districts and making them attractive places to live, shop, and invest. Alongside this, Pennsylvania continued the Keystone Communities Program, which provides smaller grants for downtown improvements and planning; many communities combined these various funds to maximize impact. The Neighborhood Assistance Program (NAP) also played a role in CED: beyond the social services projects, NAP tax credits in 2025 backed initiatives like small business loan funds for commercial corridor businesses and training programs. For instance, the Greater Altoona Economic Development Corporation received NAP-supported contributions to assist new entrepreneurs in Blair County, pairing financial assistance with mentorship 86 .
Inclusive and Innovative Economic Strategies: Pennsylvania’s larger cities pursued their own community-focused economic strategies. Philadelphia, for example, has the “Philadelphia Anchors for Growth and Equity (PAGE)” initiative – a coalition where major anchor institutions (universities, hospitals) commit to shifting more of their purchasing to local minority-owned businesses. By 2025, PAGE reported continued success: tens of millions of dollars in contracts were redirected to local suppliers, supporting community businesses in West Philadelphia and beyond. Philadelphia also expanded a “Turn the Key” program (launched by the Philadelphia Housing Authority) that trains public housing residents in construction and then employs them in building affordable modular homes – an effort that blends workforce development, small-scale manufacturing, and housing production. In Pittsburgh, the focus remained on leveraging the eds-and-meds sector for community benefit. The University of Pittsburgh and UPMC medical network in 2025 jointly funded a $5 million community investment fund to support homeownership, storefront improvements, and job training in several Pittsburgh neighborhoods where those institutions are located, acknowledging their role as anchor institutions that must invest locally. Additionally, Pittsburgh started exploring a municipal land bank and community land trust efforts to ensure that as investment comes into neighborhoods, community control and affordability can be preserved – a lesson learned from past redevelopment that often led to displacement.
Rural and smaller communities in Pennsylvania were not left out. The Rural Pennsylvania Initiative, part of Shapiro’s economic strategy, directed resources to rural CED through supporting agricultural cooperatives, outdoor recreation economy projects, and broadband expansion (vital for allowing rural entrepreneurs to access wider markets). In 2025, an interesting project emerged in Pennsylvania’s coal country: a coalition of local governments and a regional foundation launched a Worker-Owned Coal Transition Cooperative. This cooperative plans to purchase and operate a former mining equipment factory, converting it to produce geothermal heat pumps, and giving workers an ownership stake – thereby retaining jobs in the community through a new, greener industry. While still in early stages, the project drew statewide attention as a model of turning legacy industry communities toward future-oriented, inclusive enterprises.
Public-Private Infrastructure Strategies: Pennsylvania also had a unique focus in 2025 on ensuring infrastructure growth (like the data centers boom, discussed next in D5) benefits communities. Governor Shapiro, in partnership with neighboring state leaders, took a bold stance on electricity costs: as data center-driven power demand caused spikes in regional energy prices, Shapiro backed a plan with the federal administration to force tech companies to shoulder more of the grid upgrade costs so that residential consumers are protected 87 88 . This resulted in a proposal for a one-time special auction in the PJM power grid where big tech firms would buy long-term power supply contracts, effectively paying for new power generation needed for their facilities 89 . Such an approach – making large private investments contribute to public infrastructure strength – is essentially an inclusive growth strategy at the systems level. It reflects Pennsylvania’s broader stance that large economic developments (whether a factory, a warehouse, or a server farm) should not impose costs on local communities without commensurate benefits. We also see this principle in Pennsylvania’s use of prevailing wage and local labor requirements: in late 2025, state legislators proposed that data centers must pay prevailing wages for construction to qualify for state tax breaks 90 91 , aligning job quality with development incentives.
In conclusion, Pennsylvania’s community economic development efforts in 2025 were robust and multi-faceted. Small businesses and Main Streets received historic investments, recognizing them as engines of local job creation. Inclusive growth was a clear priority, from anchor institution initiatives in cities to equitable energy infrastructure plans at the state level. And innovative economic models like cooperatives and employee ownership gained support as tools to keep wealth in local hands. Pennsylvania is blending traditional economic development (grants, tax credits) with modern, community-first approaches (equity, participation, sustainability) – a strategy designed to foster prosperity that is widely shared across geographies and demographics.
