Your Regional Knowledge Economy Strategy: Is it Succeeding? (cont.)

How to develop a new metrics model

As economic development organizations already track metrics, in some cases, just reorganizing the process is needed. For others, a new approach may be required. Generally, starting from the beginning, the steps are:

1. Define your region correctly. The definition of your region will be the basis for tracking statistics (including benchmarks) and reporting accomplishments for a long time horizon. It is thus important to get widespread buyin to the definition of what constitutes your region. This may be a metropolitan statistical area or a defined group of counties.

2. Develop a comprehensive regional strategy. It is much harder to define outcome metrics properly if you lack a clear focus on what you seek to accomplish. A welldefined regional strategy includes priorities for knowledge economy market targets and internal regional asset cultivation.

3. Define your model, with selected input and outcome metrics. Input metrics measure progress in building your regional assets (competitiveness). Depending upon elements of your regional strategy, these may include metrics for population, workforce, education, research funding, student enrollments and venture capital. Outcome metrics measure your progress in increasing economic prosperity. They are driven by elements of your region’s strategy and targets, and can include measures such as per capita or household income, employment, numbers of establishments (in certain business segments) and new company formations (in target segments).

4. Create a process, including report format, baseline data for the metrics in your model, and report intervals. Evaluation requires a process, format, schedule for reporting updates, and baseline data.Make the report format as user-friendly as possible, with graphics and simplified explanations, as it should be a routine report with a relatively broad audience. Determine if there are a few peer regions to which you want to benchmark consistently and consider possibilities for including international peer regions, if data for benchmarking to them exists. Determine what is reported at which time intervals.

5. Educate your audiences. Economic development professionals know more about metrics than their public and private stakeholders know. Since many elected and appointed officials may still think in terms of counting jobs created, it is important to cultivate understanding among decision-makers of the new metrics model and why it is important. Educating local media also can be helpful.

6. Stay with it. The future may dictate changes in regional strategy or in standard comparative data sources. Either could lead to altering your model, but the overall goal is to see progress on the same metrics over a long-term period.

A word about qualitative measures

This discussion has focused on quantifiable, data-driven metrics. But to complete the story, it is clear from observation of successful strategies that there are unquantifiable, “soft” factors that are critical to economic outcomes. Three intangible but critical success factors are:

• A comprehensive, long-term strategy;
• Stakeholder buy-in and collaboration; and
• Effective leadership.

In this analysis, it is assumed that public, private and academic stakeholders in your region have come together to articulate a vision for long-term economic growth, as well as specific targeting strategies and immediate action tactics for next-stage investments. (In fact, if that is the case, you may skip steps 1 and 2 above.) Thus, the first qualitative measure of success is whether or not a regional strategy of this nature exists.

A beautiful strategy document – even prepared by a top consultant – that has not achieved sincere commitment by local leaders is of little value; metrics will not matter. Thus, true buy-in to the common vision, strategies, and tactics by the many stakeholder organizations that must collaborate in its implementation is the second qualitative success factor.

Finally, it is easy to observe that some regions progress faster than others because a leader or champion exists who not only is committed to the vision, but who also possesses sufficient stature and credibility to influence and mobilize others. There is something elusive but quite real about the leadership factor. Continuity of strong leadership, by one individual or by a small influential group, can make a major difference in success – often overriding other factors and even real obstacles.

Conclusions

To achieve future prosperity, one must accept that old approaches to improving a regional economy no longer suffice. While announcements of new plant openings make everyone feel good, long, slow asset-building efforts and cultivation of globally competitive competencies are more important. Today, we must nurture entrepreneurship and we must help existing industry to innovate. The knowledge workforce (from technician to PhD) is essential to success, as is a working system that supports the region’s innovation efforts, from research to commercialization.

None of this is cultivated quickly. And almost none of it can be accomplished without a collaborative approach that engages many organizations over a long time horizon.

For these reasons, the new metrics are far more complex, incorporating measures that only individual organizations cared about in the past, but which now are part of the region’s common, big-picture agenda. New input metrics must include measures of human capital, innovation capacity and regional competence. New outcome metrics must include measures of wealth, high-quality employment and business growth.

The world has become far more complicated and competitive. Thus, a well-defined strategy, collaborative stakeholder buy-in, and steady, effective leadership are important additional, intangible factors to which statistics cannot be applied.

Eva Klein & Associates assists universities and economic development agencies in creating strategies for the global knowledge economy. IDEA Partnerships partners with institutions to develop new places and communities in the knowledge economy. For more information, visit www.evakleinassociates.com or www.ideapartnerships.com.

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