Measuring success in economic development

I write a lot.  Three to four columns a week.  At least that many blogs and in my day job I am always writing.

As a result people have a lot of opportunity to read my stuff and read into my stuff exactly what they want to see/hear.

So, I get an email this morning after my TJ column asking why I don’t like BNB.

There is nothing in there about BNB with the exception of the set up mentioning the bad loans and the calls for the elimination of ‘economic development agencies’.

My concerns around focus, accountability and measurement are targeted at the system not just BNB.

In reality, I don’t know much about BNB.  I have never done any consulting work for the department.  I used to know 80% of the folks there 10 years ago but now I wouldn’t even know more than a handful.

I want the conversation to be about how we do economic development in the province and that is a whole bevy of agencies and departments (itself a concern).

The other point in the email was that it would be impossible to show what I am calling a return on taxpayer investment for BNB efforts.  Too much of what they do, I was told, cannot be measured in a quantifiable way.

I have heard this argument a thousand times.  If there is no tax-based reason for economic development (i.e. $1 in = $2 out over time), they how do we measure success?   Jobs created?  No, I am told, because much of the work is business counselling and support that doesn’t end up with new jobs or taxes.

Then why do it?

I fear we get back to the same old debate I have been fighting for 20 years.  Economic development is about keeping things from getting worse.  We inject a couple of hundred million in taxpayer dollars into the economy through direct economic development agency spending and loans/grants to companies and then we say without it, companies would have went under or had to lay off workers.

I don’t buy this vision of economic development.  I think that reinforces the view of those calling for the elimination of economic development efforts because they would say even if companies went under or lost jobs, the economic loss to the province would be less than the cost of propping up that activity.

My vision for economic development involves smart people representing industry, government and other stakeholders collaborating to grow export-based sectors of the economy creating incremental economic activity, employment and taxes.

Under my model, if you say you have aerospace and defence as a ‘growth sector’, and you pour tens of millions into ‘growing’ the sector over a decade, you should see growth.  Maybe that doesn’t seem practical to some but it seems eminently logical to me.


2 thoughts on “Measuring success in economic development

  1. I for one agree wholeheartedly in supporting growth & development but these efforts must be measured. I am actually shocked that nobody is calculating ROI and that this is the overarching attitude in a program that coaches new business. These businesses need to understand the importance of measuring & accountability or their success will be impacted.

    In successful business, almost everything must be measured. When an effort isn’t producing a return, you make adjustments. If the effort still isn’t producing a return, you stop wasting resources on that effort. Common sense?

    Imagine if I told my employer that what I did could not be quantified. Ha! He is not in business just to be a nice guy. At the end of the day, there is no prize in a popularity contest & popularity doesn’t pay the bills. Our Province deserves better.

  2. “If there is no tax-based reason for economic development (i.e. $1 in = $2 out over time), they how do we measure success?”

    I *think* we are supposed to measure it in the number of Bricklins?

    Sorry, I am a believer of: if a thing is worth doing than it can stand, or fall, on it’s own merits. We are talking business here, not “the arts”, there is too much room in the system, as it now stands, for “backhanders” (“the system” being almost all visible government programs).

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