Over the past months, several announcements have promoted the decision of some companies to relocate to Los Angeles. While marketed as successes, a closer review of the costs and the source of these companies is warranted.

The firms relocating to the city of Los Angeles, such as Gensler architects and Beverly Hills BMW, are from adjacent cities, not from another region. Why is this important? While the positive impact of a firm such as Gensler relocating to downtown Los Angeles or its surrounding area is clear, the movement of the firm from Santa Monica and its associated cost to taxpayers does not do anything to sufficiently impact the region as whole.

Los Angeles, in coordination with surrounding cities such as Santa Monica, Beverly Hills and Burbank, should be finding ways to target and attract major firms and industries from outside the region, instead of playing a shell game with local firms that provides no greater economic benefit. This shift in emphasis would support positive job growth.

The high cost of conducting business in Los Angeles has been raised on numerous occasions as one of the primary obstacles in convincing firms to move their operations here. Instead of fixing this issue, the city has responded by targeting nearby firms that already deal with regional obstacles such as transportation and the cost of living. What does this ultimately accomplish? Individual firms save some money at the cost of the general populace, but no significant improvements in terms of unemployment or the broader economic market are realized. If the city chooses to spend money for economic development, it should be targeting companies or industries that will be a net benefit to the entire region.

The term “Silicon Beach” has been increasingly used to describe the technology startup environment emerging in Santa Monica and surrounding environs. This includes not just companies founded here but expansion offices for established firms. These types of jobs, the basis of a highly educated, well-paid work force, are highly sought after by all cities in the country. Rather than have local cities fight among each other, a coordinated regional plan to attract these types of companies should be considered. Los Angeles can take a leadership role supporting the development of this industry in Southern California. While firms perhaps initially focus on Santa Monica, many will ultimately expand into surrounding areas. This expansion and its associated job growth ultimately benefit the entire region. People often work in one location, live in a different neighborhood and purchase goods in a third. Having new firms in a city helps spur a range of economic development, but only if the total number increases, not a mere geographic local reshuffling of the cards.

Alternatively, consider Hawthorne-based Space Exploration Technologies Corp., known as SpaceX. The company employs almost 1,300 in California, Texas and Florida. Major work is being conducted north of Los Angeles at Vandenberg Air Force Base in preparation to launch heavy commercial rockets. The city of Los Angeles is situated right between the two areas of operations.

This company, on the cutting edge of technology and possibly an entire industry, should be supported by the entire region. Skilled engineers and machinists, and high-end manufacturing are all required to make the company successful. If successful, the firm would encourage the development of many new companies rooted in these important job sectors. Even though Los Angeles doesn’t have the company itself, by taking an active role it can establish itself as the location for the industry.

New firms with fresh blood generate a deeper and more robust economic base for the region and city. It is this underlying goal that should serve as the guideline for the use of further public money to encourage relocation.

The city of Los Angeles needs to take a deeper look at how it encourages economic growth. While financial pressures encourage thinking that provides an immediate payoff, the long-term sustainable benefits are not as significant. The relocation of 100 jobs from five miles away is immaterial compared to policies that encourage an entire industry or sector to grow, develop and base themselves in Los Angeles and the surrounding region.

Only with the growth of newer firms can the city of Los Angeles address its current high unemployment and the associated challenges that come with it.

Christopher Hill is a business adviser, consultant and investor in Beverly Hills.