Part One: First Steps
A standard planning process starts with goals (values, principles, a vision) and then looks at actions (strategies, policies, investments, initiatives) that seem to increase the odds of achieving that vision and do so in an affordable and cost-effective way. An economic vision is the formal expression of what the local government and its citizens want to be at some point in the future. Visioning processes frequently use public or town meetings, focus groups, questionnaires, newsletters, and computers to engage citizens in identifying problems and opportunities facing their community, and to depict a formal expression of what citizens want their community to be.
Case Study: Washington County, Utah's "Core Values"
These "core values" arise from the vision statement in Washington County's 2003 strategic plan for economic development.
Expanding diversified economy with increasing wages: We encourage a diverse mix of growth from both existing value-added businesses as well as those we recruit that will provide high-quality career opportunities for our citizens and their children, and that will increase wages and income, enabling our citizens to improve their standard of living.
Advanced quality of education: We value quality education for our youth and life-long learners, which includes the technical advanced skill courses necessary for our workforce and employers. We seek to deliver this education through neighborhood schools, Dixie Applied Technology Center, and increasing four-year offerings at Dixie State College.
Essential services and infrastructure: We are committed to ensuring the availability of services that are essential to sustain our growth and business development. This includes, but is not limited to, improving airport services, enhancing traffic flow, increasing telecommunications capability, and maintaining adequate supplies of water, sewer, electrical power, and natural gas.
Cooperation among communities and the region: We value a spirit of cooperation and coordination between all cities within the county, region, and state to resolve issues of common concern, and recognize the need to work together to promote the economic development of the region.
Maintain quality of life: Any economic development must maintain our traditional quality of life, which consists of quiet neighborhoods, supports and cultivates the arts and culture, and encourages affordable housing, especially for young families.
Stewardship of our natural beauty and preservation of open space: All economic development must be consistent with the stewardship we have over the natural scenic beauty that is an inherent part of our environment and natural surroundings. In doing so, we seek only those economic business opportunities that will enhance our natural environment and preserve the quality of our air and water. We maintain the amount of county land under private ownership by balancing public and private land development with the active preservation of targeted lands for open space.
Part Two: Quality Of Life
"Quality of life" is a term used to describe various, sometimes intangible factors that make a community attractive to live. A quality-of-life strategy assumes government of some type of public/private partnership is able to have a significant influence on these factors and improve them over time. In theory new businesses will be attracted to communities with the most appropriate combination of factors, and existing businesses will expand for the same reason. People also use quality of life indicators to measure neighborhood and community desirability.
| Alphabetical List of Quality-of-Life Attraction Factors |
Affordable car insurance
Affordable medical care
Clean air
Clean water
Close to big airport
Close to colleges/universities
Close to relatives
Close to skiing area
Diversity of local firms
Far from nuclear reactors
Good public transportation
Good schools
High civic involvement
High marks from ecologists
Housing appreciation
Inexpensive living
Lack of hazardous wastes
Local symphony orchestra
Low crime rate
Low housing prices
Low income taxes | Low property taxes
Low risk of natural disasters
Low risk of tax increase
Low sales tax
Low unemployment
Many hospitals
Museums nearby
Near a big city
Near amusement parks
Near lakes of ocean
Near natural forests and parks
Near places of worship
New business potential
Plentiful doctors
Proximity to major league sports
Proximity to minor league sports
Recent job growth
Short commutes
Strong state government
Sunny weather
Zoos or aquariums |
Part Three: Selecting Strategies
The process for selecting strategies and particular actions for economic development planning is not always a straightforward one and indeed can sometimes present uncertainty. Clearly, it should relate to the evaluation of the strengths and weaknesses of the area economy and the organizational capacity of the local government and potential partners. Here are some questions that local officials should ask themselves when deciding and detailing different courses of action:
- What are the direct costs of the strategy?
- How is the strategy to be funded?
- How stable or accessible is the funding?
- Who is to implement the strategy?
- What are the benefits? Can those benefits be quantified?
- How long will it take?
- Has it been tried before, either in our community or in others? If so, what were the outcomes?
- What are the legal implications of the strategy? Does the local government actually have the authority to carry out the strategy, or will it need to rely on other public or private partners to implement it?
- What is the anticipated outcome?
- Do the strategies need to be implemented in any particular order?
- Which strategies are central to the success of the whole plan? To other strategies?
- Which strategies are time-sensitive (e.g., those that depend on a funding source with a cut-off date?
- What strategies can be implemented quickly in order to demonstrate tangible results and build momentum?
- What strategies are mutually exclusive, duplicative, or negating?
- What strategies clearly have lower priorities? (WEDI 2003, 20)
Part Four: Strategies For Economic Development
There are several different ways to categorize economic development strategies. The following tables are illustrative, not comprehensive.
Direct Economic Development Strategies
| Direct Business Assistance |
| Projects | Location Factor Addressed | Pros | Cons |
| Land or building purchase and assembly | Land availability and cost | Puts ownership of key property in hands of public job-creation authority Overcomes fragmented ownership and scarcity of large developable sites | Risk of holding undesirable property Expensive |
| Industrial park creation | Land availability and cost Access to markets | Prepares land for development Designed for multiple users and many jobs | Land can remain vacant and underused while waiting for desired firms |
| Business accelerator (incubator) | Land availability and cost Workforce Business formation | Focus on job creation Nurtures companies of the future | High initial costs for space and program management Need to have management expertise or provide technical assistance Small businesses do not lead to employment and tax base growth immediately |
| Direct Business Program Policies |
| Projects | Location Factor Addressed | Pros | Cons |
| Financial incentives; grants and loans, including revolving loan fund | Varies depending on what the grants and loans are used for, could include: business climate; land availability
and cost; and business formation | Some existing programs have low cost per job Can be targeted for various goals (historic preservation, job creation, etc.) | Effectiveness varies and is hard to measure Improvements can capitalize by property owner through increased tenant rent Requires local government to monitor loans, grant conditions |
| Small business assistance | Workforce Business formation | Relatively inexpensive Local focus Small businesses are numerous | Requires dedicated, knowledgeable staff |
SOURCE: ECONorthwest
Indirect Business Development Strategies
| Indirect Business Assistance |
| Projects | Location Factor Addressed | Pros | Cons |
| Infrastructure improvement | Access to markets (transportation and telecom) Business environment (other utilities) | Expands production possibilities Increases access for workers and clients Improves environment for workers and clients | Expensive Difficult to measure effectiveness |
| Other public service improvement | Community stability | Promotes quality-of-life factors essential to attract workers | Expensive Difficult to measure effectiveness |
| Planning and redevelopment studies | Various | Provides useful market information and visions for redevelopment Few direct costs | Relies on action by private sector, unless public agency owns relevant property |
| Indirect Business Program and Policies |
| Projects | Location Factor Addressed | Pros | Cons |
| Regulatory relief | Business climate | Make sit easier for development to occur Not necessary to lower standards; can lessen duplication and burden | Can remove necessary regulatory oversight if not done properly |
| Financial incentives: tax relief | Business climate | Decreases cost of doing business | Costly; may take away necessary resources from other services Research shows taxes less important thank quality of life, labor force, access to supplies |
| Education and workforce development | Workforce | Workforce skills are a key requirement for job growth | Costly Requires coordination among multiple groups |
| Business recruitment and marketing | Varies | Not as costly as grants or tax relief; relies on relaying information on positive attributes | Can be "zero sum" when viewed regionally or nationally May not address the needs of existing businesses |
| Intra-regional coordination | Varies | Decreases wasteful competition Focuses on cross boundary benefits | Requires coordination among multiple groups |
SOURCE: ECONorthwest
Part Five: Visioning Economic Development
A visioning process yields the statement of what the local government hopes to become. Technical analyses components including setting a context for the vision process by putting some realistic boundaries for the vision statement; and determining which actions will most effectively move a jurisdiction toward its vision help create the economic development strategy.
| Example of Translating Visions to Actions |
| VISION | Increase the well-being of county residents |
| GOALS | Economic Prosperity, Opportunity, and Security
Family, Stability, and Personal Capabilities
Environmental Quality and Quality of Life |
OBJECTIVES
(some examples) | Increase the Supply of Industrial Land
Encourage Child-Care Facilities
Increase Open Space
Provide Job Training
Increase the Quality and Efficiency of Services |
| ACTIONS | Acquire and prepare industrial parcels
County/Biz Task Force for Child Care
Bond for Open Space Acquisition
New Programs at local colleges
Lobby for Light Rail |
SOURCE: ECONorthwest, Clackamas County Economic Development Strategy
Part Six: Principles For Sustained Economic Development
In 1996, an international group of practitioners and researchers, concerned with measuring and assessing progress towards sustainable development, convened in Bellagio, Italy. From this meeting, overseen by the International Institute for Sustainable Development (IISD), located in Winnipeg, Manitoba, came the Bellagio Principles for Assessment. These principles have exerted significant influence on subsequent sustainable development activities, policies, and study. The 10 Bellagio principles are:
- Guiding Vision and Goals: develop a clear vision of sustainable development and goals to define that vision
- Holistic Perspective: consider the well-being of social, ecological, and economic subsystems in monetary and non-monetary terms
- Essential Elements: consider equity and disparity issues, ecological conditions, economic development, and other non-market activities contributing to human and social well-being
- Adequate Scope: adopt a time horizon long enough to capture both human and ecological time scales; build on historic and current conditions to anticipate future conditions
- Practical Focus: generate explicit set of categories or organizing framework to link vision and goals to indicators and assessment criteria
- Openness: make methods and data accessible to all; make explicit all judgments and assumptions in data and interpretations
- Effective Communication: design to address needs of users; draw from indicators and other tools to engage decision makers
- Broad Participation: provide for inclusive representation and participation
- Ongoing Assessment: ensure capacity for repeated measurement; adjust goals and framework as new insights gained
- Institutional Capacity: clearly assign responsibilities; support development of local assessment capacity (adapted from Hardi and Zdan 1997, 2-4)
Part Seven: Economic Development Indicators (One of Three)
While specific indicators will vary depending on a community's needs and desires, there are several common criteria.
Criteria for Selecting Successful Indicators
- Validity: well grounded in sound data and accurately depicts a real situation
- Relevance: appropriate for an important to the community's important issues
- Consistency and reliability: data can be researched reliably over a period of time
- Measurability: data can be obtained for the community
- Clarity: unambiguous; understandable by a diverse group of people
- Comprehensiveness: represent many parts of an issue and reduces the need for an excessive number of indicators
- Cost-effectiveness: data collection is not overly expensive
- Attractiveness to the media: the press is likely to embrace it
A Successful Indicator Should Also…
- Be appropriate to its political, institutional, jurisdictional, or other contexts;
- Be meaningful and useful to stakeholders;
- Use affordable, relevant, and accessible data sources;
- Clearly state and accurately reflect its intent;
- Result from close collaboration with stakeholders during selection, application, and review processes; and
- Connect and be consistent with well-articulated vision statements and goals (Seasons 2001, 9)
Part Eight: Economic Development Indicators (Two of Three)
Some planners now consider community indicators projects as proactive tools, not reactive records: these projects can be precursors to change and tools used to create positive effects. Thomas Kingsley, in his work with 19 community indicators projects, supports this view. He believes that the most exciting things about indicators is that they move people off dead center — new information is brought to bear so people can act now and come together (Kingsley 2002).
Why Planners Should Use Indicators
- Indicators democratize information, ideally leading to positive change through community activism be many constituencies.
- Indicators can embody the inherent values of community, encouraging public sector responses that reflect these values. Likewise, working toward common goals can reduce conflict in communities.
- Indicators represent a method to gauge accurately the economic, environmental, and social conditions within a community over the long term, allowing for more effective and informed decision making.
- Indicators systems or projects, when effectively designed and implemented, can improve evaluation of planning policy and actions by helping establish causality between planning interventions and outcomes.
Part Nine: Economic Development Indicators (Three of Three)
The strength of a community indicators measuring system lies in the involvement of citizens. The process of designing an indicators project can be invaluable to a community. By participating in the development of a project, residents can contribute to finding solutions to common problems. Bringing residents together to envision their community's future establish specific goals, and select indicators for gauging progress can foster residents' sense of belonging to their community and encourage stronger interest in outcomes.
Example of Cities 21 Indicators for Citizen Participation
Part Ten: Integrating Community Indicators with Planning
The indicators process varies from community to community. The following 10 steps are commonly used to identify, develop, and integrate a set of indicators.
- Step 1: Form a working group. Build cross-sectoral and personal relationships.
- Step 2: Clarify your purpose. Develop a strategy for broad-cased community involvement.
- Step 3: Identify your community's shared values and vision. Consider how your project links to other local efforts.
- Step 4: Reviewexisting models, indicators, and data. Tailor your project to local needs.
- Step 5: Draft a set of proposed indicators. Draw on local experts
- Step 6: Convene a participatory selection process. Narrow the list to a manageable number.
- Step 7: Perform a technical review. Retain indicators that were popular with the selection panel if possible.
- Step 8: Research the data. Make additional adjustments to indicator list as needed.
- Step 9: Publish and promote the report. Mobilize community action.
- Step 10: Update the report regularly.
Part Eleven: The Most Important Factors to Economic Development
The key objective of an economic development strategy is business development and job growth, which comes from the creation of firms, the expansion of existing firms, and the attraction or retention of existing firms. Thus, a key question for public policy is, What are the factors that influence business and job growth, and what is their relative importance? Some simple assumptions, grounded in basic economic principles, provide a point of departure for answering that question:
- Businesses want to be profitable.
- Profitability is the excess of revenues over costs. Thus, profitability can be achieved and increased by increasing revenues or reducing costs.
- Increasing revenues is primarily a function of the market for the goods and services a firm produces (the demand side of the equation), and decreasing costs is primarily a function of reducing the costs of producing and delivering goods and services (the supply side of the equation).
- Every good or service produced has multiple inputs. Thus, if one wants to influence the costs of production, one should focus on the costs of individual inputs. Some inputs are more important (as a percentage of total production costs) than others, and some are more amenable to the influence of public policy that others (e.g., the costs of infrastructure).
- There are few things that local governments can do to influence the demand side of the equation (e.g., marketing of regional products, buying locally, assisting local producers in finding local suppliers (import substitution)), but the majority and most significant ways that the public sector can influence business profitability are on supply (cost) side of the equation.
