Steamboat Springs There is renewed interest in focusing city and county government resources (time and money) on improving the condition of the local economy through targeted economic development efforts. This focus is welcomed. The challenge in the near-term becomes what should be done and how to assess whether the efforts will be effective.
The Dec. 8 editorial in the Steamboat Today (“City, county should focus on jobs”) appealed to city and county public officials to focus on the local economy. This appeal was in anticipation of an update to the Steamboat Springs Area Community Plan. Before there is a rush into “trying stuff” in the name of economic development, we first need to take the time to understand where the local economy is and where we want it to go. By doing this first, we can hopefully avoid the “ready-fire-aim” scenario that often accompanies things done in the name of economic development.
There is a shared countywide vision to have a local economy that is diverse and vibrant. This sentiment is echoed in the community plan, Vision 2030 and the mission statement of the Steamboat Springs Economic Development Council, and it is posted in City Council chambers. The challenge is defining what constitutes diverse and vibrant. We also need to go beyond the definition to clearly identify how vibrancy and diversity are going to be routinely and objectively measured. Focusing on how success is measured shifts the spotlight from specific actions to targeted outcomes.
In conjunction with the Routt County Livability Index, the Routt County Economic Development Cooperative has defined economic diversity and vibrancy in a way that can be objectively and routinely measured. This helps keep the intention of any effort done in the name of economic development clearly focused on whether it can reasonably be expected to contribute to a desired outcome.
The Economic Development Cooperative has developed three measurements of economic diversity and vibrancy. The first two measure the diversification of sources of personal income and employment. In Routt County, when the top three private industry sectors are the sources of 45 percent or less of employment and personal income, diversity has been achieved or is being maintained. The third measurement uses per capita income to assess vibrancy. Economic vibrancy is being achieved in Routt County if per capita income is increasing at a rate faster than inflation.
All three measurements can be easily updated annually using county-level data from the Bureau of Economic Analysis, whose source data comes from income tax filings of Routt County residents. This data is free for the asking.
Having this type of well-defined outcome measurement provides local government officials a metric to determine if a specific economic development action moves the local economy toward or away from the desired outcome.
For example, it is reasonable to expect that the $40,000 in tax incentives being discussed by City Council to support an expansion at ACZ Laboratories likely will increase diversity and vibrancy? This is because ACZ Laboratories is not in the top three industry sectors and it is proposing paying wages/salaries that are above the Routt County median income. Will the impact of this effort be huge? No, but it moves the local economy in the right direction of diversity and vibrancy, even if only incrementally. Therefore it meets the criteria of an economic development action that moves toward the desired outcome.
I would encourage county and city officials to use the measurement criteria developed by the Economic Development Cooperative when assessing any proposed action being done in the name of economic development. There is an old adage, “Measure twice and cut once.” This is practical advice for carpet layers, tailors and carpenters. It is practical advice for government officials, as well, when it comes to assessing their efforts done in the name of economic development. The Economic Development Cooperative has developed a useful tape measure for this very purpose.
Ford is the director of the Routt County Economic Development Cooperative.