Most people I know are pleased with the work being carried out by our region’s several economic development organizations. These organizations — both public and private — and their leadership teams are fairly visible in the community and the media. We are always glad to read that a new company is coming to Northwest Ohio or that an existing firm is expanding as a result of their work. We are interested to see how many new jobs will be created when the new company is up and running or the expansion of an existing business is complete. Every civic-minded member of our community is encouraged when he or she learns that unemployment is going down, even slightly.
But aside from the rate of unemployment, how do we measure the relative health of our regional economy? How do we know if our collective investments in “economic development” are giving us a positive return? What does a dollar invested in economic development produce by way of return? Do we get our dollar back and, if so, how much more? In what form was the return?
Beyond the return on our economic development investment, the larger and more important questions are, simply, how are we as a region doing economically? Are we going forward or backward, up or down? Is our regional economy getting better or worse? Or staying the same? And, what roles are our economic development organizations and professionals playing in the competitive struggle to strengthen the health and vitality of our regional economy?
These are not easy questions to answer and unfortunately, no one really knows for sure what our investment in economic development brings to our city and region. Has there been a discussion and agreement on what we want our economic development dollars to produce? If we wanted to measure the impact of our economic development investment, what would we measure?
This is not a question unique to Northwest Ohio. Increasingly, it is a question being asked by those footing the bill for economic development organizations and programs in communities and regions across the nation.
But, in addition to accountability, there is an even more important reason for asking such questions: Without articulating economic goals or objectives, how are we to know if they are being achieved? Is this a purely open-ended process or do we know what we are working to accomplish and what we want our city and region to become economically? Are we creating our future or are we allowing the future to create us?
The greater Toledo metropolitan region has reached such a level of capability and sophistication in economic development that we must now begin to measure our progress in terms of outcomes if we want to move forward. To do so means that we must move beyond describing our development solely in terms of contacts, presentations, visits, trips, fairs, size of budgets and number of staff, as important as these are. In strategic planning terms, these are “input metrics.” These are the necessary ingredients to economic development but they are not development, nor do they measure any aspect of our economy.
Now, more than ever, a regionwide, public-private, multiorganizational conversation is needed to reach a broad general consensus on regional economic goals, strategies for achieving these goals and objective data-based measures of progress toward success. By what metrics will we know we are making progress? How will we know if we are winning or losing in our competition with other regions or if we are even a real competitor in the game?
The Silicon Valley Index was initiated in 1995 with support from the Silicon Valley Community Foundation and has now become nationally recognized. It measures the health and strength of the region’s economy but, more importantly, it provides regional leaders and policy makers the essential data needed to make well-informed decisions.
The Silicon Valley Index is only one of several good examples of efforts to measure and report on the health of a region’s economy. It is now time for Northwest Ohio to follow one of economic development’s best practices and start measuring what we are doing and its impact on our communities and region.
Last week, I heard someone on NPR say, “If we aren’t measuring, we are guessing.” I remember thinking, “I wish I had said that.”
Dan Johnson is President Emeritus of the University of Toledo.