Traditionally, policymakers and practitioners measured the success of incentive through two key indicators:
- the number of jobs created, or
- the amount of private dollars invested/leveraged.
Economic development practitioners provide services to prospects that expressed an interest in their community but have not yet made a commitment. This work is vital in the process of leveraging an investment, but not every prospect will ultimately say yes to the community and so measuring the effectiveness of these efforts through job creation or investment leverage indicators is not appropriate.
The metrics selected must reflect thoughtful efforts that are responsive to prospect needs. These often relate to three sets of activities that reflect common practice:
- Prepare the community to receive prospects
- Customize information about area benefits to the prospect’s questions
- Connect prospects to familiar faces and resources
This section identifies common metrics associated with the activities related to these common practices number of companies engaged. The figure below illustrates how different outputs are tied to each strategy for providing transaction support services to prospects.
FDI Prospect Support Service Practice and Most Common Metrics
Outcome metrics reflect broader policy goals and should improve based on the results from the activities (even if the improvements are often so small that they are difficult to discern).
Desired Outcomes from FDI:
• Total new-to-region FDI (value and number of deals).
• Total investment by international investors (value and number of deals).
• Value of mergers & acquisitions involving international firms (number and value of deals).
• Benchmark value of increased FDI to regional economy (e.g., GDP).
Key Outputs by Category of Common Practices
Metrics benchmark performance and drive improvements in the activities that a community undertakes. Following are the most common output metrics used to measure results for key categories of activities. Practitioners may use these as a starting point to guide the selection of metrics that matter for their efforts.
Community Preparation Indicators
- # of firms (or firm executives) that take advantage of these services
Information Customization Indicators
- Customer satisfaction with referrals to partners who can address prospect-identified issues
- Proposals and RFI responses submitted
Connecting Prospects to Resources Indicators
- # of firms (or firm executives) that take advantage of services
- Customer satisfaction level with services provided (or net promoter score)
Center for Regional Economic Competitiveness, Redefining Economic Development Performance Indicators for a Field in Transition (2017)
Center for Regional Economic Competitiveness, State Economic Development Performance Indicators White Paper: Guide to Selecting Indicators (2016)
These resources provide a framework for practitioners to select appropriate performance metrics in measuring project implementation.
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