The ripple effect of big data and analytics is hitting economic development. There has been a resurgence in new tools that package economic data to make it more accessible to a wider audience. A lot of these tools are using aggregated data that is useful but it is often not granular enough to inform an individual EDO or city about how to improve its economy and what is working.
To do that we need better data that is more granular with details about specific projects and specific companies. Big Data relies on and pushes for this kind of transactional data. Much of this kind of economic data does exist but it is walled off by various bureaucratic walls. We are a long way from incorporating Big Data into economic development, and there are real risks with a pure Data Analytics approach to understanding economies and creating development strategies. Continue reading “Measure Up!”
This past April, Bedford County (PA) Planning Officials hosted one of several stakeholder tours of the decommissioned Rays Hill and Sideling Hill tunnels – tunnels that formerly served as Pennsylvania Turnpike auto tunnels. The vision now is to convert those tunnels to serve hikers and bikers as part of a regional trail network. Continue reading “Former Fourth Economy Client, Bedford County Planning, Advances “Pike2Bike” Plan”
Statistics are like a bikini, what they reveal is interesting but what they conceal is vital. A variety of “black box” applications are being introduced for economic and data analysis. These tools claim to offer intelligently organized data that provides neatly packaged insights.
On the positive side, these tools are very helpful and they are democratizing economic and data analysis. They enable the user to see a variety of indicators with a few clicks, or do drill down into various industry sectors. They also enable users to easily combine and compare indicators. Continue reading “Beware of Black Boxes”
New analysis highlights the economic competitiveness of counties across the Commonwealth.
HARRISBURG, PA – Fourth Economy Consulting today announced the release of the 2015 Pennsylvania County Competitive Analysis, an assessment of how counties across the Commonwealth are performing economically. At the core, the analysis is based on the company’s Fourth Economy Community Index, which examines both statistical and qualitative factors at the county-level across the U.S. within the economic factors of investment, talent, sustainability, place, and diversity. Continue reading “Fourth Economy Releases 2015 County-by-County Competitiveness Analysis for Pennsylvania”
Having personally conducted and written more than 75 comprehensive economic impact studies using linear cash flow models for higher education and health care clients over my 16+ year career, I thought it would be interesting to look more closely at how the focus of economic impact reports has changed over the years. Continue reading “What’s New in Economic Impact”
Governor Chafee Announces Next Action Step in Development of an Integrated Plan to Mobilize State and Community Assets for a Better Rhode Island
January 14, 2013 (Providence, R.I.) – Governor Lincoln D. Chafee today announced the next action step in a multi-agency effort over the next two years to develop an integrated approach for the state to land use, transportation, housing, and economic development. Through an open Request for Proposals (RFP) issued November 7, 2012 by the Rhode Island Economic Development Corporation (RIEDC), in collaboration with the Division of Planning’s Statewide Planning Program, Rhode Island has selected a consulting team to compile economic data, analyze the state’s regional performance, and identify strengths and possible ways to improve Rhode Island’s economy. Continue reading “National Firm Selected to Perform Economic Data Analysis on RI’s Competitive Strengths, Areas of Improvement as Part of Sustainable Communities Initiative”
In the economic development system, agencies live and die by economic impact and it is about to get a lot tougher to measure this impact.
We were talking with a young entreprenuer recently (let’s call her Katie) living and working outside of New Orleans. Her small firm has grown to 12 employees in just over two-years and grossed over 1.1 million in sales last year. She works out of a small 150 square foot office on a side street providing strategic business solutions for more than 25 clients globally. Her “employees” work and reside in 4 different states. Katie’s customer data and business records are stored in Colorado with redudant storage in Georgia. She is not a member of the local Chamber. She has never taken incentives from the state or local agencies (she does not qualify for the programs). She chose her location for its overall quality of place, green space and amenities. There were no ribbon cuttings for her expansion, no politicians thumping chests for her success, and little economic impact for her immediate locale beyond her own buying power (which is increasing exponentially by the way). Katie is, we submit, a “Cloud-Based Business.” Let us explain how this is changing economic development.
We work with numerous economic development agencies and we know it is difficult for them to measure performance and impact. They are charged with attracting new investment for their respective regions or states and have very few tools and outcomes they can directly control in that cause. They spend their time attempting to influence the behavior of others, namely potential investors, businesses, workforce agencies, city councils and elected or appointed officials to do something that results in or creates the environment for new investment to occur. And while attempting to do this effectively, they have many masters such as politicians, board members, constituents and executive committees asking them to quantify their results, impact and relevance on a regular basis.
In the good old days – way back in the mid-2000’s – the vision of a job, a business, and its location was one commonly shared by most people. A business was located in a specific geography and building, defined by a political district. It created a certain number of jobs which influenced a spending chain, creating new wealth for the immediate community. Ribbons were cut for new businesses and annual reports were filled with its statistical economic impacts. Economic development programs, services and their impact were reflective of this vision.
The Cloud has formed over this reality. The Cloud is the gravitation of all things PC based such as software, communication applications and data storage, to networked web-based solutions. The Cloud allows information to be safely shared and stored on the web at real-time speeds. It has been building on the horizon for several years as technology improved, telecom bandwidth expanded, and most importantly, people’s acceptance of web-based applications grew to the point where the Cloud simply made more sense to the user than the clunky old “buy it,” “load it,” “update it,” and “ditch it” method for IT solutions. And it is about to be ramped up. This month, HP and Microsoft have joined forces to make the Cloud stronger, faster, better.
While the Cloud has impacted all industry sectors to some degree and will continue to do so, we beleive its largest influence will be on entrepreneurial start-ups of all types. We can speculate that while Cloud start-ups will likely remain small, there will be more of them. They will be more open to collaborate with other like firms to augment service capabilities. They will employ more sub-contractors (formerly known as employees) and form networks with those contractors based on the changing client demand. They will use less space. They will demand maximum telecom bandwidth. They will do business globally. They will need less debt financing.
We’ve known for a long time that more and more job creation is happening in small firms (thanks to David Birch and others) and in very small increments. Economic Development has adapted to working with small firms and entrepreneurs, but only in so far as they are looking to get in on the ground floor of the next big thing. They are helping small firms that they hope will one day be big firms. So how do economic development agencies and states ensure their programs, services and associated impact measures are aligned for a potentially growing number of Cloud-based Businesses that will most likely never get big in the traditional sense? Here are a few thoughts…
- Program eligibility and impact will need to be based less on geography (zones or buildings) and job creation in favor of revenue increases, wealth creation, and overall growth trends.
- The use of sub-contractors or remote employees should be included in a job impact formula and weighted to some degree for program eligibility.
- Business development and technical assistance programs should recognize the Cloud Business model addressing aspects such as social networking tactics and cooperative marketing initiatives.
- Infrastructure development programs should place less emphasis on new roads, expansive business parks and sewer extensions, in favor of a balanced approach which also includes “Place-based” improvements such as parks, transit, housing and recreation and activating the linkages between these and work centers.
- Public funding or tax credit programs may encourage the development and/or use of common collaboration space with video conference services.
- Educating the agency board, respective residency base and elected officials of the implications the Cloud is bringing to development programs and the definition of economic impact is critical.
The cloud will continue to grow. It is enabling more Katies to take an idea to market, engage assistance across the country and service clients globally. It will create new wealth. We will check back in with her in the coming months and attempt to determine what her Cloud Impact may be.