Managing the Economic Development Organization for Excellence

1. �Terry Clower, 2008 Managing the Economic Development Organizationfor Excellence Monday, January 21, 2008

2. Learning Objectives 21st Century EDOs Core objectives of EDOs Internal resources External resources Communications � internal and external Information needs for Business Intelligence Measuring success

3. Types of EDOs Public State offices County Port authorities Universities / Community Colleges Local City department City funded independent agency Public/Private & Private Development corporations Redevelopment corporations Utility companies Chambers of Commerce Research from early in this decade suggests that there are more than 10,000 local and regional economic development organizations in the US. More economic development activity being pushed from state to local level � usually without accompanying resources Prior to 1930s, economic development was largely a federal function. Shift started in the 1930s with authority for Industrial Revenue Bonds. Geography impacts type of EDO. Most in urban areas are departments of local government or a closely held sub-entity. Rural area, because of a dearth of funds, rely more on state agencies, utilities, and chambers. Is your organization within one of these typologies?Research from early in this decade suggests that there are more than 10,000 local and regional economic development organizations in the US. More economic development activity being pushed from state to local level � usually without accompanying resources Prior to 1930s, economic development was largely a federal function. Shift started in the 1930s with authority for Industrial Revenue Bonds. Geography impacts type of EDO. Most in urban areas are departments of local government or a closely held sub-entity. Rural area, because of a dearth of funds, rely more on state agencies, utilities, and chambers. Is your organization within one of these typologies?

4. Describing a Typical EDO Small 1/3 of all local EDOs have 2 or fewer FTE paid staff Under-funded 20% have less than $120K budget Board reflects organizational authority Public dominated by politicians & political appointees Private dominated by business people Not enough�..

5. What do local EDOs do?(business development activities)

6. What do local EDOs do?(capacity building) Improving strategic planning & implementation � 81% Improve physical infrastructure � 79% Development/planning for business sites � 73% Analysis of local economy � 67% Developing networks among firms agencies � 62% Coordinate government programs � 61% Identify business gap / opportunities � 51% Improve telecom infrastructure � 50% Influence land use planning / regulations � 49% Lobby for area � 46% Education / training not targeted � 42%

7. Sources of RevenueLocal Government Agencies Largely general revenue 10% mostly from dedicated local taxes 24% get at least some federal monies Very few receive funding from private foundations, state government, or other sources No funding from international sources

8. Sources of RevenueNon-Government Agencies Cast the funding net much farther 33% rely on membership fees 55% get funding from local government State and federal agencies provide some funding Very small % get some support from international sources

9. Resources What non-financial resources do you have? Volunteer employees? Access to technical assistance (state agencies, universities)? Mentor networks? Committed council? (Council that should be committed?) Political support (local, regional, state)? Others?

10. Effectiveness

11. Trends in Economic Development Funding is increasing, still a challenge Professionalism More regional in focus Technical training for staff and management Board members are more sophisticated Accountability

12. Step back to the Beginning Blakley & Bradshaw suggest 2 tasks must preceed the local economic development process: Identify and mobilize organizations and institutions responsible for implementing and coordinating economic change Define the geographic scope If your organization is new, must start here. If an existing organization, re-examine these questions. Mission creep. Loss of focus. Becoming too reactive.If your organization is new, must start here. If an existing organization, re-examine these questions. Mission creep. Loss of focus. Becoming too reactive.

13. Participating Organizations and Institutions Must Have� Leadership Vision to see economic potential Ability to achieve widely-shared, desired results Legitimacy Source: Blakely & Bradshaw (2002) You must make a clear and realistic assessment of where your organization stands. Sometimes you may have to work for an extended period of time to repair overall leadership structures and regain or establish trust and legitimacyYou must make a clear and realistic assessment of where your organization stands. Sometimes you may have to work for an extended period of time to repair overall leadership structures and regain or establish trust and legitimacy

14. Moving from Vision to Action Vision Provided by the strategic planning process Missions Assigning tasks among stakeholders Strategies Planning approaches Tactics How to

15. Mission Entrepreneur / developer Industrial parks, Managing facilities, Direct investment (seed capital), Planning, Land acquisition Coordinator Gov�t entities, public-private ventures, research capacity Facilitator Streamlining permitting, planning & zoning procedures; advocacy role Stimulator Business attraction, marketing , incentives

16. Strategies Recruitment Development Retention Contingency Economic gardening

17. Tactics Action items Time lines Immediate, 6 months, 1 year, 2 year � Budgets Performance measures Reporting Feedback loop for assessing missions, strategies

18. Resource Development:Human Resources Weighting of skills depends on Mission Flexibility is a key characteristic, but means there is no set job description across agencies Sales remains a key component Outsourcing versus in-house Volunteers

19. Jobs Titles appropriate to local culture and agency mission Most important � clear job descriptions Duties, experience/skills required Flexibility built in � �It�s not my job� Benchmarked salaries Carefully place employees so that there is opportunity for rewarding good work. (Never hire at top of range.)

20. ED Occupations -- Leader May or may not be same as manager Facilitator Consensus building Public communication skills Knows how to use technical information Knows how to move from vision to action

21. ED Occupations -- Manager Organization skills Budgeting People manager Effective leader, good listener, teacher Effective use of resources Skilled networker (interpersonal) Technical competencies (not expert)

22. ED Occupations --- Analyst Strong technical skills in Data sources Data management Data analysis Sufficient technical expertise to critically evaluate work of third party consultants Data presentation The visual display of quantitative information GIS

23. ED Occupations: Neighborhood/Community Worker Strong interpersonal skills Organized Can focus on details Good record keeping Community organization/mobilization skills Possesses or can build legitimacy among a wide range of potential constituencies

24. Job Performance Tied to accomplishing strategic and tactical objectives Clearly defined. Qualitative and quantitative measures Use of volunteers � different motivation, but still need feedback mechanism

25. Training A requisite for continuing success Managers and staff Recognize formal and informal sources of information realized from training sessions Information networks Industry trends

26. Training in Economic Development Strategic planning Quality management Board retention Retention programming Business etiquette Communication skills Negotiation & ADR skills Grant writing Leadership development Research techniques Marketing Promotional materials Handling prospects Cultural issues Program evaluation Using technology Community development

27. Resource development:Finances Finance broadly defined into two categorizations: debt/equity and public/private The world of ED is a world of hybrid financing that blur the lines of these traditional categorizations A far from exhaustive list of sources includes:

28. Financing Economic Development Program operations General revenues Dedicated taxes Membership dues Fundraising Sales (products, services)

29. Financing Economic Development Development financing Revenue bonds Revolving loan funds Impact fees Enterprise /empower-ment zones TIFs PIDs Main Street Grants Brownfield redevelopment funds (EPA, EDA, HUD, DHHS, COE) Main Street State closing funds State tech funds Foundations (community) Angels VC

30. Resource development:Collaborators & partners Why partner? Overcoming resource scarcity Coping with complexity Expanding stakeholder base Importance of networking

31. Resource development:Collaborators & partners Do you agree? Is this changing?Do you agree? Is this changing?

32. Resource development:Information / Business Intelligence �Research position is the second hire in excellent ED organizations.� -- Mark James Importance of information for running an effective EDO office is known � need to move from information to intelligence. Budget line item

33. Information Resources Census Bureau Dunn & Bradstreet Hoover�s C2ER (formerly ACCRA) SEC One Source Claritas AGS ESRI EMSI Workforce Commission Regional COGs Other

34. Census Bureau American Community Survey http://www.census.gov/acs/www/ Mapping (online, boundary files, etc.) http://www.census.gov/geo/www/maps/ http://www.census.gov/geo/www/tiger/index.html Economic Census http://factfinder.census.gov/servlet/DatasetMainPageServlet?_lang=en&_program=ECN&_ds_name=E0200A1 Trade http://www.census.gov/foreign-trade/www/

35. Data Sources D&B � Million Dollar Directory, Hoover�s www.dnbmdd.com/mddi/ www.hoovers.com C2ER � Cost of Living, Incentives Database www.c2er.org SEC � Edgar www.sec.gov/edgar.shtml One Source � corporate families, global www.onesource.com InfoUSA � business and consumer data www.infousa.com

36. Data Sources Claritas � demographics, business info http://www.claritas.com/claritas/Default.jsp AGS � demographics, consumer expenditure, weather/quake risk http://www.appliedgeographic.com/data.html ESRI � ARCGis, demos, traffic, market data http://www.esri.com/data/index.html EMSI � Economic Modeling Specialists Inc Online tools for I/O modeling, cluster analysis, LMI, career pathways, other http://www.economicmodeling.com/

37. Data Sources What data sources do you find most useful?

38. Tools to Help Manage an ED Office Contacts Act! www.act.com ContactPlus www.contactplus.com Maximizer www.maximizer.com Site & Building Databases ProCure www.e-procuresite.com LocationOne www.locationone.com GISPlanning www.gisplanning.com DealMaker-Insite www.descosolutions.com Retention & Expansion E-sychronist www.e-synchronist.com ExecutivePulse www.executivepulse.com Dealmaker-ProAct www.descosolutions.com

39. Accountability Measuring effectiveness: What is success? Economic Growth vs Economic Development Job Growth Increase in per capita income Increasing/diversifying the tax base Reduction in poverty Stopping the bleeding Must have broad agreement on desired outcomes

40. Accountability Benchmarking Can be formal or informal Benchmark with a-priori conditions or comparison community Primary and/or secondary data Continuous benchmarking Program evaluation Summative Formative

41. Traditional Measure of Success Shoot anything that flies, claim anything that falls!

42. Differing Performance Measures in the3 Waves of Economic Development

43. Measuring Effectiveness Data and technique based on targeted outcomes Must be repeatable and valid Credibility of organization and you are at stake How does your organization define effectiveness? How do you measure effectiveness?

44. Communication No option here. Communicate well or fail. Communicate with whom? Stakeholders: board, elected officials, professional staff (gov�t), community leaders, businesses, � Prospects/site consultants Vendors ED staff Public Who else?

45. Communication Newsletters Speeches Formal reports (written and presentations) Board, elected officials, public Public service outlets Media interviews Web site (up to date, simple to use, fast, segmented for users, fully cited and referenced)

46. Communication What do you communicate? Goals/objectives Strategic plans Tactics, when appropriate Performance Meet the staff Budget

47. Marketing Communication �Cities are the hardest branding assignment anyone will ever get. They�re very complex, and they have a lot of moving parts.� � Carol Coletta, president of CEOs for Cities. Marketing campaigns Tourists Business attraction Residents

48. Communication Key to successful communication:

49. Summarizing In general, ED professionals are asked to do a lot with relatively few resources. Requires a wide range of skills People Supervisory Increasingly technical (at minimum be a discerning consumer of research) Know how to employ technology Measurement Where you�ve been Where you are Where you�re going

50. Summarizing Increasing availability of tools to help you do your job Evaluate Dispassionately Using data (quantitative and qualitative) Communicate Frequently Clearly

51. Finally

52. Discussion

53. References Associated Press. (Dec. 29, 2007). Houston getting personal. Dallas Morning News. Pg. 4A Blakely, E. & Bradsaw, T. (2002). Planning Local Economic Development: Theory & Practice. Thousand Oaks, CA: Sage James, M. (2007). Managing the Economic Development Organization for Excellence. University of Arizona ED training. ED Solutions, Inc.

54. Listing of Most Important Data from IEDC Industry breakdown by region and county Largest employers (# employees) in region and county New businesses 50+ employees (3 yrs) Recent layoffs 50+ employees (3 yrs) For each targeted cluster: Advantages of region Top firms by employment Business/financial services Advantages of region Top firms by employment Manufacturing List advantages of region Top firms by employment Logistics List advantages of region Top firms by employment Knowledge industry List advantages of region Top firms by employment International business List advantages of region Foreign-owned firms in region