North Tulsa Targeted Economic Development

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TARGETED ECONOMIC DEVELOPMENT TOOLS AND
TECHNIQUES
Mike D. Woods Oklahoma State University February
2003
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Lincoln County Targeted Economic
DevelopmentResults
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Table of Contents

• Introduction
• Definitions
• Applications
• Study Area
• Results
• Weighting System
• Lincoln County Response
• Site Selection Factors
• State Target List
• How to Use the TED List

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Introduction

• Definitions
• Applications

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What is Targeted Economic Development (TED)?

• A systemized approach to analyzing a community or
  regional economy to identify potential options
  for creation, attraction, retention, or expansion
  of job/income opportunities and economic growth.
• Analytical tools and community planning tools are
  utilized to enhance community decision making and
  incorporate local desires and ideas.

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Targeted Economic Development (TED) Includes
Several Methodologies Including

• Target Industry Analysis
• Cluster Analysis
• Community Assessment and Planning

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What is Target Industry Analysis?

• A method of local community economic analysis
  which produces a list of business sectors which
  have a moderate-to-strong likelihood of
  containing companies that might be interested in
  expanding and/or locating in the community under
  study.

Source Doescher
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Target Industry Analysis Techniques

• Econometrics (probability)
• Leatherman-Kansas
• Barkley-South Carolina
• Location Quotients
• Bradshaw-California
• Input-Output
• Lamie-Virginia
• Johnson-Missouri
• Holland-USDA

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What is Cluster Analysis?

• Industrial clusters are defined as interconnected
  sets of firms in a region that have national or
  global competitive advantage because they share
  common infrastructure including university
  research, labor market, specialized suppliers,
  and collective marketing.

Source Bradshaw, 2000
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What is Community Assessment and Planning?

• Community assessment and planning is an organized
  process to follow through community assessment,
  development of a strategic plan, community
  involvement, implementation of the plan, and
  evaluation of results.

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Community Development
(1) Begin/ Continue the Process
(10) Create an Ongoing Process
(2) Engage the Community and Legitimize the
Process
(3) Form an Organized Structure
(9) Celebrate Success
(8) Evaluate the Effort
(4) Conduct Community Assessment(s)
(5) Develop a Strategic Plan
(7) Implement the Plan
One tool to accomplish this is Targeted
Economic Development
(6) Seek Community Feedback and Commitment
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How is Targeted Economic Development (TED) used?

• Target industry analysis can be used in both
  business recruitment AND retention or expansion
  of existing business.
• Success depends on the way your community uses
  this information in their economic development
  efforts.

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Basic Industry
Your Community
Local Stores
Households
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Study Area
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Lincoln Pottawatomie County Study Area
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Lincoln County Population
Source ODOC
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Lincoln County Aggregated Employment
Source IMPLAN
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Lincoln County Top 10 Employers
There are 12,037 jobs in Lincoln County. The top
10 employers account for 5,497 jobs, 45.7 of all
jobs in the region. All other employers account
for 6,540 jobs, 54.3 of all jobs.
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Lincoln County Per Capita Personal Income
Source ODOC
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Results
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Targeted Strategies for Economic Development

• Export Enhancement
• Import Substitution

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Export Enhancement

• Export Enhancement is expanding the volume of
  goods and services your region sells to the rest
  of the world.

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Export Enhancement

• Community Exports
• Domestic Exports
• Foreign Exports.
• Export base includes all goods and services that
  are sold to businesses or persons outside the
  region.

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Lincoln Pottawatomie County Top 10 Exports
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Import Substitution
Import Substitution is replacing items purchased
outside the region with local production
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Import Substitution

• Commodities produced in one region often use
  goods and services (inputs) imported from outside
  the region.
• Import Substitution refers to replacing
  imported goods and services with goods and
  services produced in the local community.

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Lincoln Pottawatomie County Top 10 Imports
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Weighting System
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Evaluation Criterion for Export Industries

• What is important to your community?
• Total Employment
• Total Employee Compensation
• Direct Compensation per Employee
• Employment Growth

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Total Employment

• Total number of people employed directly by the
  initial industry, as well as those employed
  indirectly due to the multiplier effect.

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Total Employee Compensation

• Total payroll for all persons employed directly
  by the initial industry, as well as those
  employed indirectly due to the multiplier effect.

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Direct Compensation per Employee

• Average wage paid to each direct employee.

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Employment Growth

• Percentage change in the number of people
  employed in the United States from 1996 to 1997.

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Lincoln Pottawatomie Community Exports with
Equal Weights
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Weighting System

• Assign each criterion a value based on the
  following scale. You may use each value more
  than once.

• 0 Unimportant- A criterion that the community
  feels has no value to their development
  objectives.
• 1 Some Importance- A criterion that the
  community feels will contribute only a small
  amount to achieving the community objectives.
• 2 Moderate Importance- Experience and judgment
  slightly favor this criterion over the others.
• 3 Essential or Strong Importance- Experience
  and judgment strongly favor this criterion over
  the others.

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Change Weighting
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LincolnPottawatomie Community Exports with
Community Weights
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Evaluation Criterion for Import Industries

• What is important to your community?
• Total Employment
• Total Employee Compensation
• Direct Compensation per Employee
• Employment Growth

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Lincoln Pottawatomie Community Imports with
Equal Weights
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Lincoln County Response to Community Preparedness
Checklist
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Lincoln County Response Diversity and
Participation
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Lincoln County Response Resource Availability
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Lincoln County Response Networks and Information
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Lincoln County Response Public Infrastructure
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Lincoln County Response Human Resources
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Site Selection Factors based on a National Survey

• Combined ratings of 1999 site selection factors
  are percentages and are all the total of very
  important and important ratings of the Area
  Development site selection survey.

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Combined Ratings of 1999 Site Selection Factors

• Availability of skilled labor 95.8
• Highway accessibility 94.6
• Labor costs 93.8
• State and local incentives 90.3
• Occupancy or construction costs 87.5
• Tax exemptions 85.9
• Energy availability and costs 85.2
• Availability of telecommunications services 85.1

Source Area Development, 1999
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Combined Ratings of 1999 Site Selection Factors

• Availability of land 85.0
• Cost of land 80.9
• Low union profile 79.5
• Environmental regulations 79.0
• Availability of unskilled labor 77.3
• Nearness to major markets 75.6
• Right-to-work states 67.7
• Availability of long-term financing 64.2

Source Area Development, 1999
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Combined Ratings of 1999 Site Selection Factors

• Worker/technical programs 63.7
• Nearness to suppliers 59.3
• Raw materials availability 58.7
• Accessibility to major airport 57.2
• Near technical university 31.1
• Railroad services 31.0
• Waterway or ocean port accessibility 13.2

Source Area Development, 1999
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Combined Ratings of 1999 Quality-of-Life Factors

• Low crime rate 79.9
• Ratings of public schools 72.4
• Health facilities 70.4
• Housing availability 70.1
• Housing costs 69.1

Source Area Development, 1999
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Combined Ratings of 1999 Quality-of-Life Factors

• Recreational opportunities 57.6
• Climate 58.8
• Cultural opportunities 52.5
• Colleges and universities in area 52.4

Source Area Development, 1999
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Oklahoma State Target List
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State Targeted Industries

• Aerospace
• Motor Vehicles Parts/Accessories
• Business Services (Finance, Insurance,
  Dot.Com/Internet)
• Communications/Telecommunications (Fixed/Wireless)

• Electronics/components and related high tech
  industry
• Food Processing
• Plastics and Rubber
• Distribution Warehousing
• General Manufacturing
• Health

Source ODOC, 2000
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How to Use the TED List
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How to use the Targeted Economic Development List

• 1) Identify local organization and local contact
  person.
• 2) Complete Community Preparedness Checklist
  and confer with community development
  professionals from OCES.
• 3) Review targeted industry list and confirm
  region of study.
• 4) Review targeted list of industries. Do they
  make sense? Do you have questions?

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How to use the Targeted Economic Development List

• 5) Evaluation criteria include jobs, wages, wage
  rates, and employment growth rates. How do you
  rate these criteria?
• 6) Begin to identify the top 10 industries to
  focus on for recruitment efforts.
• 7) Begin to identify the top 10 industries on
  focus on for retention/expansion efforts.
• 8) Consider in-depth analysis of these
  industries. Utilize the U.S. Industrial Outlook
  and others.

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How to use the Targeted Economic Development List

• 9) Build a recruitment program including
• Target List
• Marketing Material
• Mail Campaign
• Personal Contracts

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How to use the Targeted Economic Development List

• 10) Build a retention/expansion program
  including
• Visitation
• Appreciation Efforts
• Expansion Needs
• Local Support

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How to use the Targeted Economic Development List

• 11) Remember the key role of your allies and
  resources!
• 12) Build your strategy for development with
  CARE. Balance optimism with realism and insure
  you have the resources to accomplish the goals
  you set.

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Thank you!
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Lincoln County Targeted Economic
DevelopmentResults

• Monday, September 28, 2009