- June 8, 2014
- Posted by: matt
- Category: Archived Newsletters
Regional Data and Benchmarking: Whatâ€™s the Latest?
Iâ€™ve recently been spending some time in Central Virginia, developing a web based regional economic indicator dashboard for the Region 2000 Partnership, a regional economic development organization based in Lynchburg, VA. This work has prompted me to re-immerse myself in the latest trends around regional benchmarking, effective strategies for data visualization, and, to use plain English, the art of telling a story of regional economic development. This edition of EntreWorks Insights gives me an opportunity to share some of what Iâ€™ve been studying and reading.
Dashboards have a fairly extensive history in both business and government circles. In business, the Balanced Scorecard is one of the most well-known of these tools. In government, leaders at all levels have embraced this tool. The Obama Administration seems to have a crush on dashboards as they have truly proliferated under their watch. The Office of Management and Budget manages many of these including dashboards on regulation, open government, and information technology. State and local governments are in on the act too. Examples include Marylandâ€™s StateStat site or Kansas Cityâ€™s KCStat.
The use of dashboards to track economic development performance is less is extensive. My research efforts suggest that Northeast Ohio was one of the first regions to embrace this modelâ€”back in 2006. (An interesting review of this experience can be found here.) Today, the use of these tools is pretty commonplace. If you search the web for terms like â€œeconomic development dashboard,â€ you will face a dashboard tsunami, with dozens of state, regional , and local dashboards. (For a good summary of lessons learned from this experience, click here.) This is good thing.
Dashboards and Big Data
The growing use of economic dashboards is driven primarily by the emergence of new data tools and new visualization technologies, i.e. the rise of big data. I donâ€™t need to tell readers that big data is hot today, and is often touted as one of the next big changers for the 21st century economy. In the field of economic development, the use of big data to build economic dashboards and other tools offers many potential benefits. Its role in â€œdemocratizingâ€ economic development discussions is benefit #1. Thanks to new data visualization tools and presentation techniques, we can better communicate about often complicated economic development issues with the general public. A picture is worth a thousand words, especially when itâ€™s compared to reams of government data tables!
These new tools also help us do a better job in terms of tracking our own performance. Better data and better visualization toolsâ€”via dashboards and other approaches-should help funders and elected officials better understand and improve the business of economic development. Hereâ€™s one example. We know that shared data on entrepreneur support networks helps improve the overall performance of all partners. By tracking referrals within the business service provider network along with performance outcomes, we can identify strong and weak performers (based on the no. of referrals) and also take action to support the top performers and invest in improving the laggards.
Finally, we should be able to use these tools for both diagnostic and predictive purposes. Just as retailers use big data to predict whether youâ€™ll buy diapers, hummus, or a new dress, we should be able to use these tools in our work to determine, for example, which businesses use and benefit from our services or which kinds of workers benefit most from customized training programs. Over time, we might be able to predict how other more large scale policy changes (e.g. changes in tax rules) affect local business performance. Obviously, weâ€™re not quite there yet. New data tools are being used to improve customer services, but we havenâ€™t yet reached the point where we are doing these kinds of more sophisticated analyses. (A very interesting recent National Bureau of Economic Research paper looks at the potential and challenges of big data end economic analysis.)
All of these speculations come with some cautions. We need to aggressively embrace these tools and use dashboards and other user-friendly techniques to share what and how weâ€™re doing. Most importantly, we need to improve data quality. A beautifully designed community dashboard isnâ€™t very helpful if its data is dated or irrelevant. Unfortunately, too many public data sources fail to meet the requisite quality standards. Some of this is due to government privacy and confidentiality rules, but a lot stems from lack of funds. Data quality is not the most exciting topic, and weâ€™re not going to find many politicians running on a platform of â€œWe need better data.â€
But this job is essential and we all need to engage in efforts to expand funding for public data agencies. At the same time, these agencies need to continue their ongoing efforts to make more data available and to provide economic development data in more user-friendly formats. We also need to embrace the emergence of many exciting new private or non-profit data sources. For example, I would find it very difficult to do my job without access to excellent data sources like the National Establishment Times Series (NETS) and Youreconomy.org, real-time labor market data, and other private data sources.
If you are interested in these issues, I would highly recommend learning more about the Council for Community Economic Research, the Labor Market Information Institute, and the Association of Public Data Users. These groups all advocate for better public data and provide excellent technical assistance. (Disclosure: I serve as a Senior Fellow at the Center for Regional Economic Competitiveness, a partner to these three organizations).
Back to Economic Dashboards
Let us know return to the specific issue of economic dashboards. Whatâ€™s happening in the field today? For a good sampling of projects from across the US, I highly recommend visiting the Community Indicators Consortium, where you can find an invaluable library of resources and data along with a large inventory of indicator projects from around the world. As youâ€™ll see, this is a blossoming field with lots of interesting work underway.
Within this field, a couple of interesting trends stand out. More communities are moving to the next level and integrating community indicator projects and performance measurement. This is the essential first step if weâ€™re truly serious about democratizing decision-making and improving our own performance as economic developers.
A second exciting trend is the emergence of specialized dashboards and data projects. These efforts typically target a specific set of issues or focus areas, such as locally-owned businesses, the impact of anchor institutions, or regional equity. These efforts all suggest that we are on the cusp of some exciting new directions that should help us all do better work and do a better job of engaging our communities.
Whatâ€™s New at EntreWorks Consulting?
We have added one new document and some related links to the EntreWorks library page. These materials all stem from a very interesting project sponsored by the Appalachian Regional Commission (ARC) that examines connections between regional economic diversity and regional prosperity. The full report, Economic Diversity in Appalachia: Statistics, Strategies, and Guides for Actions, is posted in the EntreWorks Library. Other project materials, including an excellent web tool for tracking regional economic diversity, can be accessed at the ARC website.
Erik Pages of EntreWorks will on the road this summer, working on projects for the state of Maryland, the Northwest Pennsylvania Commission, Berks County (PA), and the American Farm Bureau Federation. He will be teaching the North Carolina Basic Course in Chapel Hill on July 31 and participating in an interesting event in Clarion, PA , on July 15. This latter event will examine how the emergence of new shale energy resources can help create new opportunities for small manufacturers. If youâ€™d like to attend or learn more, send an email to info (at) entreworks.net. Registration details are available here.
We continue to provide more regular news and updates at the EntreWorks blog at http://entreworks.net/blog. Recent posts have looked at new metrics and performance measures, recent data on business start-up rates, and new approaches to attracting foreign direct investment. You can also access blog updates at our Facebook and LinkedIn pages.