The document discusses evaluating the effectiveness of local economic development efforts. It suggests communities ask what goals they are trying to achieve and how well the local economy and development efforts are performing toward those goals. It provides examples of indices to measure various aspects of economic health, and a framework to evaluate development efforts on a scale from "strategic perspective" to "hostile waters". The key is for communities to objectively analyze their situation and identify areas needing improvement.

1. Jim Kinnett
Della Rucker

2. The world is changing, and your efforts
need to adapt
You can use incentives, but you have to
do it differently than you used to.
Financing projects is more complicated
than it’s ever been

3. If your economic
development efforts
are not working
effectively –
and not working to
meet your community’s
needs and priorities….

4. What does success look like for
your community?
Are you moving in that direction?
Are the programs and
organizations you’re using today
working?

5. What are you trying to achieve?
How well is your local economy
functioning in terms of moving toward
those goals?
How well are your local economic
development efforts functioning in terms
of moving toward those goals?

6. First Question:
what are you
trying to
achieve?

7. What do you want to be
when you grow up?

9. Once you understand
your goals, you’re ready
to start evaluating your
efforts.

10. Second Question:
How are we really
doing?

11. E > P
Economy growing faster than
Population

12. Economy drives dollars
(resources/revenues)
Population uses dollars
(services/expenses)

13. E > P
Economic Base Growth Qualified/Nonqualified
Workers
Services Growth Service Demand
Tax Self-sufficiency Growth Imbalance
Net Worth Community
Dependents –Youth
and Elderly

14. Demography is Destiny Index
Economic Health Index
Community Health Index
Government Fiscal Index
Economic Development Effort Index

15. Measure of demographic indicators of
economic health
Typical Metrics: Regional
Interdependency, Population
growth/decline, population age,
diversification, poverty rate, ethnic
diversification

16. The quality of the jobs in the community
as measured by wages, skill levels,
business concentration and job
diversification.
Typical metrics: Average wages and
growth, economic sectors growth and
contracting, number of jobs, jobs by type
of education, total labor force, labor
participation rate, unemployment, etc.

17. The health of the community as measured
by housing, poverty, crime and educational
indicators.
Typical Metrics: Poverty rate and changes,
diversity of housing opportunities, housing
affordability, percentage of Section 8 or
affordable housing opportunties, ownership
or rental; condition of local school system
(drop out rate, etc.)

18. The health of local government as
measured by the fiscal condition of local
government, the breadth of services
provided, the balance of income and
expenses
Typical Measures: Stability of sources,
diversity of sources, infrastructure
expenditures, etc.

19. The quality of the community’s economic
development efforts.
Typical Metrics: Partnerships, financial
stability of ED Organiation; work with
other groups;

20. Third Question,
Part 1:
How well do you
know your
community?

21. Can you take an unbiased look?
How critical can you be?
Honesty and Transparency

22. What do you need to know to have a
productive discussion?
Do you think your community has a
• Demographic problem?
• Economic base problem?
• Service sector or leakage problem?
• Public sector management problem?
How confident are you of your
assessment?

23. What Do You
Think is Going
On?
Gut check

24. What else is
right/wrong?

25. Second Question,
Part 2:
How are we
really doing…
and how can we
be more sure?

26. Ow.
You can do some on your own
Internet tools make most of it
easier
You may need help
There are few perfect answers
You’re looking for indicators…
piecing together a picture from
fragments.

27. Five Indices:
•We’ll walk through 3
here
•One assumed to be
pretty easy
•5th will be the final
section

28. Ask...
Is the population growing? Shrinking? Stable?
Is the 24-44 age group growing faster than the
64-84 cohort?
Better or less educated ?
What is happening to the ratio of those with
college degrees?
Those earning $35,000 or more? Less?

29. Qualified Workforce Test
Non QW
Q Worker
Dep. Youth
Dep. Older

30. Key Metrics:
Percent Unemployed
Percent Not in Labor Force
• NILF = Dep’t Older + Nqual WF
Occupation/Industry
Distribution
Change in population over time

31. Sources:
Census (American Factfinder)
Business Analyst Online (subscription
required)
On The Map

32. Other things to ask...
Is the population becoming
healthier? More fit?
Are you losing your native talent?
Do you have an unemployment
problem?
Under employment problem?

33. Key sources:

34. Ask…
Is the value of the local economy
growing faster than population?
Are average salaries in the economic
base increasing?
Is your economic base diverse?
What sectors are
growing/shrinking?

35. Key Metrics:
Total payroll for geography, change over
time (may require discounting)
Average payroll (for non-suppressed
sectors)
Distribution of payroll or establishments
across industries

36. Key sources:
Economic Census (American FactFinder)
Your tax office
Business Analyst Online

37. More questions to ask…
Is any part of your economic base at risk?
Any new sectors on the horizon?
What sectors are likely to change in the
next decade?
Are you at full employment and out of
extra labor to grow the economic base?
Is your service sector stealing talent from
your economic base employers?

38. Key sources:

39. Is your residential tax base
growing faster than commercial
tax base?
Is your cost of delivering
infrastructure and services going
up faster than revenues?

40. Is the budget of local
government growing faster then
population? Faster than the
economy?
What is the risk of a major
revenue or expense variation for
local governments?

41. There’s a lot of data
The biggest problem is that it’s
hard (or sometimes impossible)
to use for analysis
There might be a way around
that.

42. Third Question:
What do I
do with all
this stuff?

43. Just like anything else, a
return on investment can
take many forms.
The key challenge is to
figure out as a group
whether you are satisfied
with what you’re getting, or
whether something needs to
change.

44. Similar to Gut Check structure.
Make categories fit your goals and the
key issues you analyzed.
Pass/Fail, Letter Grades, scale 1-
10…whatever works
Share data
Crowdsource assessment
Identify key factors that need to change

46. Pick some data points that particularly
got your attention /speak to the key
factors that need to change
Determine if you can best track them
quantitatively or qualitatively
Start tracking them
Share your results.

47. Use the Dashboard to start discussion
regarding whether your economic
development efforts are having the
impact they should.

48. 1. Commercial to Residential Tax Ratio C/R
2. Population Growth 0-40 Trends
3. Local Tax Burden (current vs. Past)/
Household/Per Capita
4. Dependency Ratio E/P
5. Labor Participation Rate – General + Ethnic

49. 6. Educational Attainment
7. Jobs Vs. Population Ratio E>P
8. Public Capital Expenditures/Tax
Revenue
9. Ecosystem Trends
10. Cultural Diversity

50. So… now that you have some idea
how your community is doing…
It’s time to evaluate your
Economic Development
Effectiveness Index

51. Are your economic development efforts set
up to make the change you need?
Is the community getting an acceptable
return on its investment?
What should you look for?

52. Strategic Perspective
Tactical Opportunistic
Organized Delusion
Clueless Apathy
Hostile Waters

53. 1. Strategic Perspective
• Dominant player
• Driven by transaction based metrics,
• Highest level of strategic
preparation/investment,
• Exec Staff at risk for performance,
• Focus is on specific market making, results
assured by internal forces and volition of
organization.
Marker: Exec is reponsible for meeting
mutually-developed, realistic metrics

54. 2. Tactical Opportunistic
• Too many targets,
• Fuzzy goals,
• No transaction metrics,
• Exec not at risk
• Lacks marketing resources,
• Depends on others for most leads
• External forces determine success.
Marker: There’s a list of goals, but no one is
paying attention to them or measuring
(including Exec.)

55. 3. Organized Delusion
• No performance metrics,
• No plan
• No marketing resources
• No accountability
• No strategic investment.
• Unprepared when opportunity arises
Marker: Not measuring and cannot prove
meaningful progress toward any goals

56. 4. Clueless Apathetic
• Doesn’t know there is a game,
or knows but doesn’t care,
• Believes in the tooth fairy,
• May be receptive but is
unrealistic and unprepared
• No organization, no EDP, no
plan, no budget, no inventory
• Unable to respond.

57. 5. Hostile
• Knows there is a game but
refuses to play
• Anti business and/or anti-
growth politics,
• Leaders openly hostile to new
economic base employers,
• Business climate deteriorating,
• Existing base employers trying
to leave.

58. How do you
get to Strategic?

59. Strategic, deliberate and proactive
Economic development strategy
discussions are disciplined, focused
and productive
Specific future economy is defined

60. Political will motivated by
economic base calculation for
new economy
Organization formed for single
mission

61. The board sets goals, writes plan
and manages by metrics
Program is funded & driven by
transaction metrics

62. Annual marketing budget exceeds $2.50 per
capita
Program is staffed by experienced, well paid,
at-risk professionals
EDPs are interviewed, hired & given
responsibility & control over critical program
factors

63. Strategies for marketing, business
climate improvement, infrastructure
development, workforce development
investment are integrated

65. Della Rucker, AICP, CEcD
The Wise Economy Workshop
www.wiseeconomy.com
Della.rucker@wiseeconomy.com
513.288.6613
@dellarucker
Della Rucker AICP CEcD
Also on LinkedIn and
Google+
James Kinnett, CEcD, FM, EDFP
The Kinnett Consulting Group
www.kinnett.biz
Jim@kinnett.biz
812.290.5663
Mark Barbash, FM
Economic Development Consulting
www.markbarbashconsulting.com
Mark.barbash@gmail.com
614.774.7599