ACCE DIALogue Behind the Numbers of Economic Development J. Mac Holladay May 11, 2006

What is Economic Development?

Defining Economic Development An environment in which communities and their citizens prosper and improve their quality of life Economic diversity that sustains each locality and the entire region throughout economic cycles Economic development is a process -- not an event Economic development is where public policy and free enterprise intersect

Economic Development Today Economic development means many things to many people In our history, it has meant only “industrial recruitment” Today’s definition is about multiple strategies— small business development, tourism, existing business and industry, downtown development, sports, minority business, regional partnerships, etc. It’s about building better communities

Five Key Trends in Economic Development Globalization Technology and Telecommunications Regionalism Sustainable Development Workforce Development

Holistic (adj.) – Relating to the theory that living matter or reality is made up of organic or unified wholes that are greater than the simple sum of their parts Concerned with wholes rather than analysis or separation into parts Emphasizing the importance of the whole and the interdependence of its parts

Economic Development Strategy Enterprise/ Small Business Development Existing Business and Industry Services/ Procurement Tourism/ Film Development/ Product Development Downtown/ Main Street/ Historic Preservation International/ Trade/ Export Quality Recruitment/ Commercial/ Industrial Sports/ Recreation/ Culture Minority Business Development

Getting Behind the Numbers Know your community Perform basic data research Determine priority competitive issues Create an actionable plan Ongoing knowledge of the economy

Community Landscape Basic statistics Basic structure Economy Governments Geography Leadership History Realities and problems Trends, patterns, values, etc. Politics Unique features

Key Indicators Economic Employment change Top employers Recent layoffs and announced openings Labor force participation rates and unemployment rates Economic structure by employment sector Entrepreneurial activity Average wages Demographic Population change Migration patterns Age distribution Racial and ethnic composition Commuting patterns Socioeconomic Teenage pregnancy rates Educational attainment levels Poverty rates Per capita income

Competitive Realities Assessment

4 Key Areas of Competitiveness Education and Workforce Infrastructure Business Costs and Capacity Quality of Life

Comparison Areas Key competitors State Nation Metro areas, counties, and/or cities your community competes with for jobs and investments State Nation

Data Sources National Level State Level Community Level Bureau of Labor Statistics (BLS) Bureau of Economic Analysis (BEA) US Census Bureau National Center for Education Statistics ACCRA National Association of Realtors Federal Bureau of Investigation (FBI) State Level Department of Health Department of Labor Department of Education Community Level Data available from government sources Additional data collection needs Staff research Employer surveys Work with community partners to produce pertinent data Energy Information Administration (EIA) Federation of Tax Administration Federal Deposit Insurance Corp. (FDIC) Small Business Association (SBA) Patent Trademark Organization Environmental Protection Agency (EPA) Department of Commerce Department of Transportation Higher Education Institutions

Education and Workforce Development Indicators Educational attainment levels K-12 enrollment trends High school dropout and graduation rates Per pupil expenditure Student-teacher ratios Standardized test scores Available higher education programs Two- and four-year institution graduates by degree program Available workforce development programming

Infrastructure Indicators Accessibility, capacity, and condition of transportation networks: Road Air Rail Public transportation Technology assets High-speed, broadband internet access Water and sewer infrastructure capacity Access to business capital Innovation measures Patent activity Academic research funding

Business Costs and Capacity Indicators Availability of buildings, sites, and business parks for commercial and industrial use Ease/difficulty of development regulations/processes Labor cost assessment based on average annual pay by business sector Cost of utility services Average fuel prices Local and state tax rates affecting business operations Assessment of available local and state incentive programs Available support for entrepreneurs and small business owners Self-employed individuals, by business sector

Quality of Life Indicators Cost of living estimates Affordability of housing Availability of health care services Measures of infant, child, and adult welfare and health Crime rates Recreational, cultural, arts, and entertainment amenities Air and water quality, and other measures of environmental health Civic engagement Creativity quotient and young professional amenities

Key Findings: Making Sense of the Data Strengths Weaknesses Opportunities Threats

Review of Key Findings from Research Community Landscape Basic Data Comparables Community SWOT analysis Macroeconomics: “Big Picture” Utilize dedicated research staff Outline community capacity Identify competitive realities

Example: Key Performance Measures and Benchmarks Population Change: Job Growth Rate: Sept. 2003 – Sept. 2005 Nashville MSA: 6.4% -Richmond MSA: 4.6% -U.S.: 3.4% Per Capita Income, 2003: Nashville MSA: $33.368 -Richmond MSA: $32,879 -U.S.: $31,472 Poverty Rate: In 2003, both MSAs had poverty rates around 10 percent. However, the City of Richmond’s (20.2 percent) was much higher than that of Davidson County, TN (13.5 percent). Educational Attainment: In 2004, both MSAs had identical high school attainment (85 percent), but Richmond (36.2 percent) leads Nashville in college graduates (29.3 percent).   2005 % Change 1995-2005 Nashville MSA 1,422,544 22.5% Richmond MSA 1,175,654 15.9%

Example: Socioeconomic Well-being: Per Capita Income Source: U.S. Bureau of Economic Analysis

Example: Socioeconomic Well-being: Poverty Rates Source: U.S. Census Bureau

Example: Labor Force Participation Rate (LFPR) Region’s LFPR has decreased since 1990, And is lower than the state, nation, and all 3 peer metro areas. Low LFPR is related to lower per capita income. Source: BLS, Employment Security Commission of N.C., U.S. Census Bureau

Example: Educational Attainment

Example: Migration Patterns Components of Population Change, 2000 to 2004: Greater Waco, Benchmarks, Texas, and United States Source: U.S. Census Bureau Population Estimates

Possible Key Benchmarks Increase in real per capita income Reduction in teenage pregnancy Increase in labor force participation rate Increase in high school graduation rate Growth in the number of self-employed Investment in local infrastructure development

Possible Key Benchmarks Reduction in infant mortality rate Increase in tourism/travel dollars spent Reduction in the poverty level Increase in investment of existing businesses Steady population growth (in-migration)

Ongoing Knowledge of your Economy Track the key demographic and economic statistics at least once a year Note any significant local, national, or global change that could affect your numbers Always maintain perspective of how your economy is doing in a national and global context Keep looking for new information from reliable sources Monitor your plan’s benchmarks and performance measures

Best Practices Nashville, TN Rome, GA Austin, TX

Best Practice: Nashville, Tennessee www.nashvilleareainfo.com

Best Practice: Nashville, Tennessee Information available on website: Data: demographic, workforce, taxes, incentives, target industries, utilities, transportation, education, culture and living, business activity, and monthly economic indicators Customized site selection and real estate searches Regional geographic maps Investors and partners Some programs targeting competitiveness: Business location assistance Starting a business Existing and small business services International business

Best Practice: Rome, Georgia www.romega.com

Best Practice: Rome, Georgia Information available on website: Data: demographic, income, population, workforce, industry Industrial sites and buildings Transportation, technology, utility, education, and healthcare availability Some programs targeting competitiveness: Business location assistance Starting a business Existing and small business services International business

Best Practice: Austin, Texas www.austinchamber.org

Best Practice: Austin, Texas Information available on website: Data: demographic, education, workforce, business and retail, transportation, telecommunications and utilities, cost of living, quality of life, climate and environment, taxes and incentives Interactive community maps and real estate property search Business resources Media center Some programs targeting competitiveness: Tax and utility incentive programs Austin Wireless Capital Distribution and logistics International investment Clean energy technologies Headquarters and regional offices

What Not to Do: Using and Presenting Data Don’t mix different kinds of data or data sources Don’t use or create an index without an understanding of how it is weighted Don’t just collect the data to put on your website: track the data and understand what implications changes have for your community Don’t use any data that comes from a questionable source Don’t use data you can’t explain in simple terms

What to Do: Using and Presenting Data Do track indicators on an ongoing basis Do know how to use data to “sell” your community Do the analysis - the data is only the first step Do tell the whole story, but highlight your strengths Do keep it simple - concentrate on 4 or 5 statistics Do let the numbers drive the conclusions. Don’t make assumptions.

the numbers will set you free. If you know the numbers, the numbers will set you free. Managing Harold Geneen, former CEO of ITT

ACCE DIALogue Behind the Numbers of Economic Development J. Mac Holladay May 11, 2006