Evaluation of Washington’s Evaluation of Washington’s Economic Development Economic Development

SystemSystemWEDA Winter ConferenceWEDA Winter Conference

February 12, 2013

Spencer CohenSenior Policy Advisor

Washington Economic Development Commission

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Legislation (SB 5741)

• Establish standards for data collection and maintenance for providers in the economic development system, including core data to be collected by each entity.

• Establish minimum common standards and metrics for program evaluation.

• Periodically administer scientifically based outcome evaluations of the state economic development system.

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Overview

1) Review of Washington’s economic performance.

2) Benchmarking3) Economic development budget.4) Evaluation practices.5) Survey of businesses innovation

practices.

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4Data source: U.S. Bureau of Labor Statistics

Jobs RecoverySeasonally adjusted non-farm employment, based on 3mma

5Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics.

Change in Non-Farm Employment by Metro AreaNovember 2012 year-over-year, based on 3mma, seasonally adjusted

6Data source: U.S. Bureau of Labor Statistics, Census of Employment and Wages; author’s calculations.

Largest Manufacturing Sectors, 2011By employment, based on 4-digit NAICS

BenchmarkingAssessments based on state-by-state comparisons

Pillar Strengths Weaknesses

I. Talent & Human Capital Above average education attainment among resident population, particularly STEM.

Constrained educational and talent production capacity.

II. Investment in Entrepreneurship and Small Business

High patent production; large share of federal funding support.

Decline in venture capital (though 2012 uptick)

III. Infrastructure Reliability. No data for state-by-state comparisons of long-term economic impacts.

IV. International Business Exports continue to be strong; 6.4% increase in non-aerospace, non-agriculture exports.

Only 4.0% of state covered employment in FDI firms.

V. Regulatory Environment No reliable data for state-by-state comparisons.

State Auditor’s Office found highly fragmented and incomplete system for information dissemination.

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04/20/23 8

Dept of Commerce18 Programs

Governor’s OfficeStrategic Reserve Account

Employment Security

Department15 Programs

Dept. of Agriculture5 Programs

Dept. of Social & Health Service

3 Programs

WSDOT2 Programs

Associate Development Organizations

OSPI /Early Learning

3Programs

WA SBCTC10 Programs

Workforce Training Board

2 Programs

Washington State University

5 Programs

University of WA6 Programs

36 other state economic programs

Recreation & Conservation Office

14 Programs

Innovate WA8 Programs

Trade AssociationsEconomic

Development Councils

Innovation Partnership

Zones

City & County Government

Federal Labs

SBA

Dept. of Agriculture

SBIR/STTR

Dept. of Defense

Business and Local Economic Development Organizations

FederalPrograms

Dept of Commerce

Economic Development System Inventory

II. Budget—State Economic Development Program Expenditures by Activity

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Distribution of State Economic Development Program Expenditures by Targeted Demographic

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III. Evaluation Practices—Key Findings

• Lack of resources for economic development evaluation.

• Outdated, unsophisticated systems for tracking client data.

• Lack of standardized and robust methods for validating data.

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Evaluation Practices—RecommendationsData Standards and Guiding Principles

• Market failure your program is designed to address? • Primary outcome(s) associated your program? • Is the outcome measurable?• If “no,” what is the intermediate output you directly impact?• How do you measure this impact?• How do you validate the data being tracked to measure

impact? Is it standardized to allow for year-over-year comparisons?

• Average amount of time it takes from program intervention to observable outcome? Are you metrics aligned with this timeframe?

• To what extent do you collaborate with other state, federal, and non-profit programs? [Qualitative response.] 12

Evaluation Practices—Recommendations

• Implement a unified statewide client relations management system

• Require programs to use administrative 3rd party data whenever possible

• Redefine Government Management, Accountability, and Performance (GMAP)

• Invest in rigorous analysis of long-term net impacts of transportation investments

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IV. Survey of Businesses Innovation PracticesKey Findings, Program Awareness %

• Innovation-based activities within firms tend towards productivity improvements and marketing.

• Major sources of innovation are from customers, followed by internally from employees and industry.

• Based on our sample, most important areas of state improvement are: 1) tax system; 2) access to capital for small businesses and start-ups; 3) regulatory environment; and 4) K-12 system.

• Among the programs reviewed, general awareness tends to be low.

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Survey of BusinessesRecommendations

• Evaluate agency methods in implementing marketing programs and effectiveness in reaching target clients.

• Assess awareness among program managers of other programs that focus on the same business demographic.

• Direct agency directors to implement joint marketing and coordination of service delivery (e.g. concierge service)

• Assess feasibility to expand customer relations management system (CRM) to manage delivery of state services (e.g. Commerce Salesforce CRM)

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V. Plan Going Forward

• Apply “guiding principles” to develop a rigorous data collection process [Winter and Spring 2013].– Develop of program-specific logic models.– Sign MOUs with ESD, DOR, and L&I for data-sharing system.

• Implement better system for inter-program service delivery.– Propose shared CRM system [Spring 2013] – Convene sector- and activity-focused meetings among ALL programs

[Summer 2013]

• Work with Commerce and Economic and Revenue Forecast Council for collaborative data analysis and reporting [Summer 2013].

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APPENDIX

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WEDC 2.0 18Data source: Washington State Employment Security Department.

Largest Absolute Changes in EmploymentOctober 2012 year-over-year, based on 3 month moving average