Economic Development Strategic Planning...Class Objectives 1. Define economic development strategic...
Transcript of Economic Development Strategic Planning...Class Objectives 1. Define economic development strategic...
Economic Development
Strategic Planning
GA Tech Basic Economic Development Course
Lisa Collins, CEcD, EDFP March 13, 2013
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Class Objectives
1. Define economic development strategic planning
2. Identify benefits of economic development strategic planning
3. Understand 8 steps of economic development strategic planning
4. Review methods for analyzing and profiling a local economy
5. Identify common problems of economic development strategic planning
6. Develop a successful economic development strategic plan
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What is Economic Development Strategic Planning?
A METHOD in which a community can look at its current situation and compare that situation to where it would like to be in a certain period of time
A PROCESS by which the steps to reach the vision are clearly laid out and defined in practical and feasible actions steps
A TOOL that economic development organizations can use for effective development
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What is Economic Development Strategic Planning?
"If you don't know where you're going, any road will get you there."
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What is Economic Development Strategic Planning?
"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don’t much care where--" said Alice.
"Then it doesn’t matter which way you go," said the Cat.
"--so long as I get SOMEWHERE," Alice added as an explanation.
"Oh, you’re sure to do that," said the Cat, "if you only walk long enough."
(Alice's Adventures in Wonderland, Chapter 6)
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What is Economic Development Strategic Planning?
An economic development strategic plan should:
Chart a reasonable path to address
identified GOALS
Have clear OBJECTIVES to reach the goals
Have practical and feasible action steps -
STRATEGIES
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What is Economic Development Strategic Planning?
Goals Represent overall vision and desired
outcomes
Must be prioritized
May be comprised of several short and long-term objectives
Objectives
Strategies
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What is Economic Development Strategic Planning?
Goals
Objectives Enumerate exactly what is to be
accomplished
Specific
Easy to measure
Strategies
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What is Economic Development Strategic Planning?
Goals
Objectives
Strategies Answer the question “How do we get there?”
Should be based on: ED goals and objectives Economic assets of community Available resources of community Constraints of community Desired direction for growth / development
of community
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What is Economic Development Strategic Planning?
Example:
GOAL: To develop a technically educated and
skill workforce prepared for employment
OBJECTIVE: Enhance the technical skills of the existing workforce
STRATEGY: Create a shared worker program among like manufacturers
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Benefits of a strategic plan
1. It SHAPES a community’s future
Steers economic development
Helps community reach long range economic development goals
Keeps long range plans in context Tyranny of the urgent
Ankle-biters
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Benefits of a strategic plan
2. It provides a STRUCTURE
Builds consensus within leadership /shared vision
Goals mutually accepted / common agenda
All rowing in the same direction
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Benefits of a strategic plan
3.It defines the PURPOSE of the community
Lays out clearly what the plan is
All focus on the same goals
Avoids misunderstandings
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Benefits of a strategic plan
4. It BALANCES goals with resources
Realistic assessment of community resources and assets
Identifies available resources to achieve goals
Eliminates pie-in-the-sky plans
Avoids frustration among leadership
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Timeline for an Economic Development Strategic Plan
3 Key Phases/usually completed within 6–12 months
Phase One / Pre-planning Phase Meet with stakeholders / 1 month
Assess local economy / 3-5 months
Analyze data collected / 4-6 months
Phase Two / Planning Phase Formulate economic development plan / 3 months
Phase Three / Post Planning Phase Review strategic plan with community, finalize,
prepare for implementation / 1 month
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Eight Step Approach to Economic Development Strategic Planning
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Step 1: Preplanning
The time frame in which:
The process is organized
The players are identified
Consensus is built
Areas to be assessed is identified
Technical and financial support requirements are determined
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Eight Step Approach to Economic Development Strategic Planning
Step 2: Assess the local economy
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Step 2: Assess the local economy
To develop a strategic plan, economic development practitioners should address:
Local economic conditions /driving forces in the economy
Current economic activity
Fiscal well-being
Community attributes
Development capacity
The economic base industries
External trends and events
Future trends and developments
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Step 2: Assess the local economy
Assessing the local economy helps to:
Determine existing and potential competitive advantages
Identify local assets and potential liabilities that will affect local economic development
Assess regional, national and international environments and their impacts on the local economy
Discover challenges economy is experiencing, or will face
Project or forecast local economic trends
Begin to monitor economic performance over time
Locate resources for implementation of the ED plan
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Step 2: Assess the local economy
Avoid the pitfalls of data collection and analysis!
Identify area of analysis and limit information gathering to that area
Keep information gathering simple
Gather and analyze information over time
Make information relevant and understandable to decision makers
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Step 2: Assess the local economy
Define the Economic Area/Jurisdiction
To gain full understanding of the economic environment, look at the local and regional economic setting
Areas of study include:
1. Region-wide Analysis
2. City-wide Analysis
3. Sub-city Analysis Neighborhoods Central business district
4. Sectoral Analysis - particular parts of the economy, i.e.: Manufacturing sector Service sector Labor force
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Step 2: Assess the local economy
Assessing Institutional Capacity
Why?
To gain full understanding of existing resources such as existing programs and organizations
An organizational “audit” reveals capacity to implement and administer proposed projects
Avoids duplication of services
Can conduct a SWOT analysis of organizations or existing programs and services
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Step 2: Assess the local economy
Create an Economic Development Profile / Economic Inventory of Community
Include:
Economic Condition
Population Characteristics
Labor Force Characteristics
Physical Condition
Business Climate
Knowledge-based Resources
Institutional Capacity
Quality of Life
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Step 2: Assess the local economy
Information on the local economy can be obtained from:
Economic analysis of federal, state and local data
Surveying local businesses and residents
Holding focus groups
One on one interviews with key stakeholders and local leaders
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Step 2: Assess the local economy
Assessing Economic Data
Many different analyses are available to help a community to understand its economy
To be meaningful, data must be put into a frame of reference and compared to some standard
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Step 2: Assess the local economy
Assessing Economic Data
Most common comparisons are:
1. Trend Analysis How a factor has changed over time
Ex. Which industries are growing and which are declining
2. Cross Variable Analysis Comparing variables
Ex. Comparing changes in income with changes in wages
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Step 2: Assess the local economy
Assessing Economic Data
Most common comparisons are:
3. Cross Area Analysis
Compares local data to that of other areas
Provides perspective on local economy’s comparative position and performance
Identifies local economy uniqueness
Time consuming, but provides most useful information
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Step 2: Assess the local economy
Assessing Economic Data
Most common comparisons are:
4. Cross Sectional Analysis
Provides a clearer understanding of the composition of economic activity
Ex. A cross sectional analysis of local employment divides total employment into industry categories
Identifies industries that provide largest share of local employment
Can become competitive advantages
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Step 2: Assess the local economy
Other Economic Analysis Tools
Economic Base Impact Analysis The economic base of a local economy is
composed of those industries that account for a significant portion of an area's economic activity and performance
An Economic Base Impact Analysis shows Economic composition, and in what sectors local
industries are concentrated
Balance between industries that “export” their products and industries that produce solely for local market
Which sectors are growing (declining) and why
How changes compare with national trends
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Step 2: Assess the local economy
Other Economic Analysis Tools
Target Industry Analysis
The Economic Base Analysis can be combined with business climate factors to identify “best fits” for a community, particularly industrial and office sectors
Those “best fits” become targets for business attraction and the focus of business retention
This analysis can project industry growth and land absorption into the future
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Step 2: Assess the local economy
Other Economic Analysis Tools
Retail Leakage Analysis
Provides a retail picture of the city
Indicates which retail categories are adequately serving residents from within city limits, and which retail types are serving residents from other locations
Can pinpoint store types that are failing to capture a reasonable share of the local and extended market for goods and services
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Step 2: Assess the local economy
Other Economic Analysis Tools
Fiscal Impact Analysis
Projects the relevant net benefit to a community
as it expands
Looks at impact costs (utilities, public safety
traffic, etc.) associated with various land uses
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Step 2: Assess the local economy
Other Economic Analysis Tools
There are several methods of measuring and
analyzing the foundation of the local economy
These analyses are only applicable at the sub-
national level, for they all require the
incorporation of a larger economy’s patterns into
the calculations
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Step 2: Assess the local economy
Other Economic Analysis Tools
Location Quotient (LQ) LQ identifies export-base firms by comparing the share
of local employment in an industry to the national employment share of that same industry
LQ gauges industry sector concentration in an area, thus indicating the specialization of a location
Employment is the most common unit of measurement
LQ identifies local competitive advantages or disadvantages of different industries
Relatively high concentrations in a particular industry can indicate a local competitive advantage in that industry
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Step 2: Assess the local economy
Other Economic Analysis Tools
Shift-Share Analysis A technique used to probe the growth components of
different industries located within a “local” economy (such as a county or state) in relation to their counterparts belonging to a “larger” economy (such as the entire state or country).
The growth (measured as change in employment) is usually calculated for a period ranging from one to several years.
Helps identify industries where the local economy is more or less competitive than nationally
Helps identify industries with a local competitive advantage
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Step 2: Assess the local economy
Other Economic Analysis Tools
Input Output Analysis
Input-output (I/O) analysis traces the linkages, or
flows of commodities and money, between
industries within, and between, geographic areas
Very complex and time consuming effort
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Step 2: Assess the local economy
Other Economic Analysis Tools
Cluster (Analysis)
Clusters are geographic concentrations of related businesses
Are complementary or competing
Drive wealth creation in a region
Are regional entities
Two types of clusters:
Buyer-Supplier Clusters
Vertically linked
Consists of core companies and their supporting suppliers
Shared Resources Clusters
Horizontally linked
Consists of companies that rely on same sources of raw materials, workforce and technologies
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Step 2: Assess the local economy
Other Economic Analysis Tools
Different analyses involving clusters include:
Shift share analysis
Input-Output analysis
Retail Opportunity analysis
Pinpoints store types failing to capture a reasonable share of local and extended market for goods and services
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Step 2: Assess the local economy
Other Economic Analysis Tools
SWOT Analysis
SWOT stands for:
Strengths: the community can promote
Weaknesses: the community acknowledges or fixes
Opportunities: the community can prepare for
Threats: the community mitigates, if at all possible
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Step 2: Assess the local economy
SWOT Analysis
Internal Forces: Inherent characteristics of the community that local action may or may not be able to influence
Internal forces usually defined in terms of strength and weakness
Strengths are factors that give a community its
competitive advantage High quality of life Skilled workforce Close proximity to a university
Major Assets / market them Limited Assets / potential strengths that require low
level of investment to establish a competitive advantage
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Step 2: Assess the local economy
SWOT Analysis
Internal Forces: Inherent characteristics of the community that local action may or may not be able to influence
Internal forces usually defined in terms of strength and weakness
Weaknesses are factors that are obstacles to economic development
Poorly skilled labor force
Inadequate infrastructure
High crime
Weaknesses should be categorized:
Those that can be corrected
Those that cannot be corrected
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Step 2: Assess the local economy
SWOT Analysis
External forces are factors external to the economy and have an impact on the local economy
External forces usually defined in terms of opportunities and
threats
Opportunities are conditions external to the community that make it easier to develop competitive advantages
Structural changes in the economy
Demographic changes in the community
Technological changes (SGRITA)
Threats are unfavorable trends external to the community that
lead to a decline in a community’s economy in general
Regulatory changes
Social and political changes
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Step 2: Assess the local economy
SWOT Analysis
Once the SWOT analysis is complete, the next step is to prioritize them by identifying which are most important to the community’s future.
Successful communities build on their strengths while addressing their weaknesses and taking advantage of opportunities.
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Eight Step Approach to Economic Development Strategic Planning
Step 3: Formulate goals and objectives
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Step 3: Formulate goals and objectives
Goals and objectives:
should be realistic, clear and concise
should represent the overall vision and desired outcome of the economic planning process
are developed based on the assessment of conditions
provide direction for the courses of action
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Eight Step Approach to Economic Development Strategic Planning
Step 4: Identify, evaluate and prioritize projects
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Step 4: Identify, evaluate and prioritize projects
Prioritize projects based on best return on project’s goals and objectives
Calculate each project’s degree of impact and rank accordingly
Calculate time horizon of projects
Calculate financial costs of each project
Rank projects according to degree of community support
Determine degree of technical feasibility for projects
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Eight Step Approach to Economic Development Strategic Planning
Step 5: Develop plan of action
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Step 5: Develop plan of action
Define the physical steps that can lead to accomplishing goals
Include:
who /what group is responsible
funding needed for each project
expected outcomes
timelines
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Eight Step Approach to Economic Development Strategic Planning
Step 6: Implement the plan
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Step 6: Implement the plan
Remember:
flexibility is the key
sound management techniques can help avoid delays
resolve problems quickly and competently
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Eight Step Approach to Economic Development Strategic Planning
Step 7: Monitor and evaluate the outcomes
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Step 7: Monitor and evaluate the outcomes
Monitoring and evaluation: ensures that projects are effective and on track
justifies the costs involved
determines if adjustments need to be made
enables the promotion of project success
is a good way to make public spending accountable and transparent
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Step 7: Monitor and evaluate the outcomes
Monitoring and evaluation: Program success rests on 3 performances factors:
Economic benefit or impact: Is the community better off as a result of the project? Are the economic benefits positive as a result of the project?
Most common measurements of economic benefits are: Number of businesses created / retained
Number of new jobs created / retained
Salaries of new jobs created / retained
Investment dollars into community
Organization efficiency How well project is being managed
Customer satisfaction
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Eight Step Approach to Economic Development Strategic Planning
Step 8: Retool and adjust
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Step 8: Retool and adjust
Review the strategy, and adjust regularly, to meet changing conditions
Difficult to develop future strategies and plans without a clear understanding and measurement of what has been achieved
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Common problems with strategic planning process
No clear identification of priorities
No leadership buy–in
Absence of a strong leader to keep process going
A lack of commitment to implementation
High initial costs in terms of time and money
Not a quick fix that be developed in a matter of days
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When developing a strategic plan
Remember to: Enlist cross-section of leadership
Involve general public in meaningful ways
Have clear understanding of the strategic
planning process
Clearly identify priority issues that effectively address key problems
Involve appropriate organizations for implementation
Develop means for evaluating performance so the process can be appropriately adjusted
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Best Practices DO
Put together an “A team” committed to coming together at a moments notice
Work to bring factions together in a common vision Be creative in marketing your community on a budget Research to find best fit business and industry targets for
your community. Set reasonable goals with benchmarks, action steps Identify staff, which organization will do what, and
determine financial costs up front Constantly review the plan Retool and re-adjust as necessary Keep your eye on the prize
DON'T Don't forget your current businesses in your community Don't forget to think "out of the box" Don't let naysayers deter you
Remember, economic development is a long term process.
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Questions?
Lisa S. Collins, CEcD, EDFP
Director of Economic Development
Early County 2055, Inc.
229.724.7558
www.earlycounty2055.com