Measuring Economic Progress in Rural Regions
As we think about measuring success for economic development in rural areas, we are realizing the goal posts are not only moving, but morphing. Jason Vangalis and Ashley Scray of Ady Advantage, explained the shift after attending the International Economic Development Council's 2017 Annual Conference and Strategic Planning Workshop in Toronto. Read more of their insights from the Conference at http://adyadvantage.com/takeaways-2017-iedc-annual-conference.
Among the Ady's team reflections on the Conference, the item that stood out for me was the growth of the gig economy. A gig economy is a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.
"The gig economy will continue to grow. These jobs form an important part of the local economy but are not always easy to count as traditional jobs. As more individuals work outside of the traditional employment paradigm, it will be difficult to track job growth and employment impact in any given region with today's methods. Additionally, it will be more challenging to apply traditional incentives policies to induce job growth. Productivity and impact on the local economy will be more important metrics as the gig economy grows."
Looking at the amount of capital investment and the number of full-time employees is no longer enough. Productivity and impact on the local economic data can today be perceived as fuzzy math.
As a "gig worker" for over 30 years, I can say with confidence that it is difficult to measure success in small businesses. Is increasing full-time employees a good metric? Many times small businesses use contractors until they hire their first full-time employees. Is profit a good measurement? While you can measure profit in a small business, sometimes business owners really do need to take a paycheck!
In NW Illinois Economic Development's Build it - Grow it business program we measure increase in sales quarter-over-quarter. If you have increasing sales and manage the growth well, hopefully you should experience some profit. Profit and cash flow are so important to all businesses, not just gig businesses. In Build it - Grow it, we learned to measure what makes sense to measure for small businesses. What are you measuring with your small businesses?