Cedu edco regional seminar

Economic Analysis Tools for Economic Development Planning

EDCO Regional Seminar - Ingersoll

November 25, 2010

Presentation Overview

• Who are we?

• What do we do?

• What tools and support do we provide and how do they support local economic development planning? – Including new developments in existing tools

• How do EDO’s access the tools/support/resources?

Economic Development Services“program development and community support”

Community Economic Development Unit (CEDU)

Regional Economic Development Unit (REDU)

• Program development & support–BR+E, FICE, CEA, DR, CIRRO

• Training–Program based–Communities of Practice

• Best practices research–Emerging program needs

• Policy support–Local food, human capital

• Stakeholder facilitation–EDCO, EDAC, Provincial & Federal

• Program implementation

• Strategic planning

• Advisory services–Business development–Marketing strategies–Funding programs

• Network building in support of regional economic development

Rural Community Development Branch – Client Coverage

Regional Office Location

Community Economic Development Unit

Community Economic Development“helping communities chart their own course”

• Develops practical, locally-driven strategies to build economic opportunities

• Enables local organizations and work with local leaders to build capacity and inform their decision-making.

• Builds multi-functional, comprehensive strategies in contrast to individual economic development projects.

• Integrates economic and community goals to bring about more far-reaching community revitalization.

• Guided by strategic planning support, service, and analysis – CED is a rigorous process

Build the skills, expertise and teams to create economic opportunities through:

– Education– Outreach– Programs– Services– Network development

Capacity Development

• First Impressions Community Exchange (FICE)

• Business Retention & Expansion (BR+E)

• Downtown Revitalization Services (DR)

• Community Economic Analysis (CEA)

Tools for Economic Development Planning

First Impressions Community Exchange (FICE)“building capacity from the ground up”

• Identifies opportunities and challenges for a community to begin developing an economic development strategy

• Reveals how a community is perceived by visitors, potential investors or potential new residents

• Identifies a communities strengths and weaknesses in critical areas such as:

– Key government and retail services– Education– Signage– Access / Amenities– Recreation

Benefits/Outcomes• Creates a shared sense of priorities

among local leaders• Community engagement - champions

and teams are identified• Sets priorities for local action:

– Tourism development– Community revitalization efforts– Approaches to attract and

retain businesses

*Refreshed materials launched earlier this year

Community Commitment

• To participate in First Impressions, you will need to:

– Sign a Terms of Engagement with the exchange community and with OMAFRA;

– Select and identify a Coordinator;

– Recruit and train volunteers for a Visiting Team;

– Complete the visit and assessment using the booklet provided;

– Prepare and present to the exchange community using First Impressions Presentation Template;

– Host a “report back” from the exchange community

– Develop an action plan based on the report and feedback;

– Submit a final report to OMAFRA using a supplied Report Form.

Program Resources

• Resources and Training– Rural Business Consultants– Economic Development

Consultants– Program Lead– Program & Service Delivery

• Program Marketing Brochure• Web pages: www.reddi.gov.on.ca • Coordinator’s Guide• Full Picture Guidebook• Tourism Guidebook• Downtown Guidebook• Report Forms• Presentation Templates

Reach of the First Impressions Community Exchange (FICE)

FICE Projects(135)

FICE 2005-2009

• Municipalities Supported: 108

• Businesses within these Municipalities: 97,000

• Population of these Municipalities: 2,245,000

Business Retention & Expansion (BR&E)“breaking down the barriers to local business”

• A systematic business consultation program

• Focus on understanding needs of local businesses

– 80% of job growth and investment comes from businesses already in a community

• Remediation of barriers to business through local action

• Benefits/Outcomes

– Job creation/retention, increased tax base, increased investment, more positive business climate

– Local problems get solved

– Early warning of expansions and closures

– Closures are prevented

– Improved business – community relationship

BR+E Process

Stage 1:

Project Planning and Business Survey

Step 1: Introducing BR+E to the community

Step 2: Leadership Team and Task Force

recruitment (variable)

Step 3: Project design

Step 4: Interviewer recruitment and training (1-2 months)

Step 5: Business Visits

Step 6: Review surveys for Red Flag issue (6 months)

Stage 1:Planning & Firm

Visits

ImmediateFollow-Up

Data Analysis

Implementation

BR+E Process

Stage 2:

Immediate Follow-Up

Step 7: Red Flag response (immediate)

Planning & Firm Visits

Stage 2: ImmediateFollow-Up

Data Analysis

Implementation

BR+E Process

Stage 3:

Data Analysis and Recommendations

Step 8: Data entry (web application)

Step 9: Data Analysis

Step 10: Task Force Retreat (3 months)– Identify key findings – Identify potential actions

Planning & Firm Visits

ImmediateFollow-Up

Stage 3: Data Analysis

Implementation

BR+E Process

Stage 4:

Public Meeting and Implementation

Step 11: Initial public meeting

Step 12: Formation of groups for implementation

Step 13: Implementation/Action Plan

Step 14: Monitor progress

Step 15: Follow-up public meetings (1 month +)

Implementation of projects can take

1 to 2 years +

Planning & Firm Visits

ImmediateFollow-Up

Data Analysis

Stage 4: Implementation

BR&E Program Resources

• Coordinator Training and Certification (2.5 days)

• Main, sectoral and specialized surveys

• Executive Pulse web application– Technical support

• Training manual• Resource manual• Evaluation manual• Team Management manual• Multimedia resources• Regional support

BR+E Program Improvements

*NEW* Agri-Business & Food Processing Business Survey

• Building on traditional Agri-Food Survey to capture changing needs in the new local food economy

• Pilot survey currently under development with Durham Region• Manufacturing Survey modified for growing food processing sector• Community questions used to develop new survey templates• Launch: December 2010

BR+E Program Improvements

*NEW* Workforce Development & Human Capital Survey

• By 2011, all net growth in Ontario’s labour force will come from new immigrant employees

• Base Survey modified to address:– challenges and opportunities for businesses in the attraction and retention of

immigrant employees;– NOC classifications to link business needs with skill-specific employees

• Partnership with Community Immigrant Retention in Rural Ontario (CIRRO) program

• Pilot currently under development with Brockville, Leeds & Grenville• Community questions used to develop new survey templates• Launch date: November 2010

Reach of the Business Retention + Expansion (BR+E)

BR+E Projects (63)

BR+E 2005-2009

• Municipalities Supported: 186

• Businesses within these Municipalities: 163,000

• Population of these Municipalities: 3,536,000

Downtown Revitalization Services“building on a community’s assets”

• Technical assistance and insight to support rural community efforts to strengthen downtown cores

– Business & Building Inventory

– Business Owner Survey

– Resident Survey

– Business Mix Analysis

– Trade Area Analysis

• Insight and expertise for a market-driven downtown revitalization approach

Benefits/Outcomes

• Job creation/retention

• Business openings/recruitment of new business

• Decreased commercial vacancy rate

• Sharpens the competitiveness of existing business owners

Physical ImprovementsPhysical Improvements

Management + LeadershipManagement + Leadership

Marketing + PromotionsMarketing + Promotions

Economic DevelopmentEconomic Development

Integrated Approach (Four-Points)

25

Timeframe for the Four-Stage Process

PREPARINGPREPARING

STAGE I: ORGANIZING & SCOPING(2-4 months)

STAGE I: ORGANIZING & SCOPING(2-4 months)

STAGE II: COLLECTING & ASSESSING(4-6 months)

STAGE II: COLLECTING & ASSESSING(4-6 months)

STAGE III: ACTION PLANNING & PRIORITIZING(3-4 months)

STAGE III: ACTION PLANNING & PRIORITIZING(3-4 months)

STAGE IV: IMPLEMENTING & Monitoring(2 years)

STAGE IV: IMPLEMENTING & Monitoring(2 years)

Market AnalysisPhysical Design

OtherResearch

Physical Improvements

Marketing & Promotions

EconomicDevelopment

Leadership &Management

Other

Program Resources

• Resources and Training

– Formal OMAFRA Downtown Revitalization Training

– Rural Business Consultants & Economic Development Consultants

– Program Lead

– Communities of Practice

• Web page: http://www.omafra.gov.on.ca/english/rural/inddr.htm

• Coordinator’s Manual and Resources CD-ROM including:

– Case Studies

– Templates

– Community examples

Reach of the Downtown Revitalization Services and

Resources

DR / DMA Projects (38)

• Municipalities Supported: 32

• Businesses within these Municipalities: 29,000

• Population of these Municipalities: 629,000

DR/DMA 2005-2009

Community Economic Analysis Tools“technical support to help you understand your local economy”

• Analytical Information and data on the labour force and business sectors

• Technical guidance for incorporating economic analysis into strategy development and implementation.

Benefits/Outcomes• Effective economic development

requires an understanding of the dynamics of the local/regional economy-its current and recent performance, the evolution of its industry structure, the underlying reasons for these trends, and the challenges ahead.

• Leads to the formulation and implementation of strategies that build on local opportunities and address local needs

• ED strategies are developed that influence job creation/retention, improved tax base and improved quality of life

Community Economic Analysis Tools

• Community Business Profiler

• Labour Flow Analysis

• Competitive Advantage Analysis

– Location Quotient Analysis

– Industry Leading-Lagging Analysis

– Carvalho Classification

Community Business ProfilerPresents the number of businesses representing each sector by employment size category for a selected municipality

Labour Flow Analysis

Labour Flow Analysis provides a picture of the movement of labour into and out of a municipality

• Two Labour Flow Analysis Resources:

1. North American Industrial Classification System Version (NAICS)

Compares the number of jobs in each industry held by local residents with the number of jobs in the same industry held by people working in the community

2. North American Occupational Classification System Version (NOCS)

Compares the number of jobs in each occupation held by local residents with the number of jobs in the same occupation held by people working in the community

• Includes a measurement of the relative concentration of employment in each occupation or industry, based on the resident employed labour force and the workforce employed by local establishments.

Occupation-based Labour Flow Analysis

Occupation-based Labour Flow Analysis

OMAFRA’s occupation-based Labour Flow Analysis provides local statistics for 520 occupation categories.

Labour Flow Analysis

• The industrial and occupational mix of the labour force will provide insight into the skill base of the local work force:

– Use the information to make evidence based assumptions of labour market needs and issues

– Use the information to garner support for carrying out projects and making the public aware of the importance of workforce development strategies

– Can be used to match a community’s capabilities and objectives with industries that require those capabilities to help establish what industries are the best prospects

– Use the information to help profile a community to prospects and fulfill information requests about the community

– Use the information to empirically measure the “creative economy” in your community or region.

Competitive Advantage Analysis

1. Location Quotient Analysis– Analysis of industry concentration, relative to Ontario

2. Industry Leading-Lagging Analysis– Analysis of industry growth/decline, relative to Ontario

3. Carvalho Classification– Ranking economic performance

• Provides a broad picture of the local economy, and reveals how business sectors are performing (i.e. growing/declining) in the community

• Provides an indication of business sectors that drive the local economy

• Provides and indication of business sectors that the community offers a competitive advantage.

• Measures the relative concentration of each industry in your local economy compared to a reference area (in our case, Ontario).

% of local employment in industry i

% of provincial employment in industry i

• If LQ>1, industry i, is more concentrated in the region• Sector is more concentrated than the reference area – serves a larger

market - brings new money to the local economy – community has a “competitive advantage” for this industry

Location Quotient Analysis

LQ =

Industry Leading-Lagging Analysis

Describes the relative growth dynamics of provincial and local business sectors

Provincial Sector Relative Growth:

• “Leading” – if the sector’s growth provincially exceeded the overall provincial growth rate for all sectors

• “Lagging” – if the sector’s growth provincially was lower than the overall provincial growth rate for all sectors

Local Sector Relative Growth:

• “Leading” – if the sector’s growth locally was greater than sector’s growth provincially

• “Lagging” – if the sector’s growth locally was lower than provincial sector’s growth provincially

Carvalho Model for Ranking Economic Performance

• Developed by Dr. Emanuel Carvalho – University of Waterloo

• Considers three separate measures to rank sectors:

1. Degree of Concentration– Location Quotient

2. Overall Strength of Industry– Provincial Sector Relative

Growth

3. Local Growth– Local Sector Relative Growth

Location Quotient

Provincial Sector

Relative Growth

Local Sector Relative Growth

High

driving > 1.25 Leading Leading

accelerating 0.75 – 1.25 Leading Leading

rising < 0.75 Leading Leading

Medium

evolving > 1.25 Lagging Positive

transitional 0.75 – 1.25 Lagging Positive

moderate < 0.75 Lagging Positive

promising > 1.25 Leading Lagging

yielding 0.75 – 1.25 Leading Lagging

modest < 0.75 Leading Lagging

Low

challenging > 1.25 Lagging Lagging

vulnerable 0.75 – 1.25 Lagging Lagging

marginal < 0.75 Lagging Lagging

Competitive Advantage Analysis

Competitive Advantage Analysis can point to industries that enjoy local comparative advantages. It cannot, however identify what the actual comparative advantages are.

It is important to identify what factors have contributed to the local comparative advantage:

– Local raw materials or local inputs

– Transportation methods

– Local wage rates

– Influence of local industries

– University influences/College influences

– Local consumption and savings

– Other comparative advantages

Competitive Advantage Analysis

• The results from the Competitive Advantage Analysis should be supplemented with information acquired through a consultation process to identify:

– Industries that possess competitive advantages in the community; and

– Community competitive advantages

• The integration of information gathered through a community consultation process and quantitative analysis provides the foundation for a economic development strategy for the community.

Limitations of Competitive Advantage Analysis

• Time period for data: 2001- 2006

• Based on Census responses

• Results based on employment - some sectors becoming more capital / technology intensive may show decline in employment despite higher productivity

• Municipalities Supported: 249

• Businesses within these Municipalities: 239,000

• Population of these Municipalities: 5,400,000

Reach of the Community Economic Analysis (CEA)

Tools

CEA Tools 2005-2009

CEA Tools – Community Project (30)

CEA Tools – Regional Project (76)

CEA Tools – Combined Projects

CEA Tools

DR / DMA Projects

FICE Projects

CIRRO Case Studies

BR+E Projects

• Municipalities Supported: 313

• Businesses within these Municipalities: 287,000

• Population of these Municipalities: 6,782,000

CED Programs and Tools 2005-2009

Combined Reach of the Community Economic Development

Programs & Tools

2009-2010 Client Success

Client Successes 2009-2010

• Clients Successes: 103

• Jobs created/retained 2,900

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Presentation Overview

Who are we?

What do we do?

What tools and support do we provide and how do they support local economic development planning? Including new developments in existing tools

• How do you access the tools/support/resources?