Measuring Success

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).