Measuring economic development success in Spokane

EDC looks for better ways to track jobs it has recruited to
area

When Mark Turner
took over as
president of the
Spokane Area
Economic
Development
Council in 1998,
the agency was
having a pretty
good year.

Tom Sowa – Spokesman Review Staff writer

For an
organization charged with recruiting good jobs to the
region, 1998 had some front-page successes.

Aerospace giant Goodrich announced it would bring
250 jobs to town over the next three years.

Travelers Casualty of Hartford, Conn., said it would
expand its Spokane service center, adding 300 jobs
to the 500 it had already announced.

Now four years later, the number of jobs recruited in
1998 hasn’t matched the EDC’s projections.

The nonprofit EDC recruited nine companies in 1998
that promised a total of 698 new jobs by 2001.

Today, only 211 jobs have been created by those
companies, based on recent phone surveys and
interviews.

Insurance provider Travelers has 230 full-time jobs
here and no immediate plans to expand.

And Goodrich, hamstrung by the recession, has
added just 100 jobs at its West Plains jet brake
assembly plant.

The shortfall illustrates the EDC’s quandary: It uses
company projections to measure its own success as
a job-recruitment agency.

And quite often, company projections are off the
mark.

Turner acknowledges that the EDC produces a
yearly tally of projected new jobs, but devotes few
resources to tracking whether those jobs actually
materialize.

Now Turner and other economic development
officials are eager to find a different method for
measuring success.

"Numbers are not the best determinant of what goes
on within a community," Turner said.

"Companies grow, don’t grow, or fail, subject to
factors that are often totally outside the influence of
this community."

The EDC’s approach of using yearly job tallies is
imperfect, Turner said, but widely used by most
development agencies nationwide.

It’s also the way the Spokane EDC has done things
for more than a dozen years.

He agrees with others across the country who say
counting jobs is important, but it’s not the sole criteria
for a community’s economic well-being.

One alternative yardstick is to calculate the ongoing
benefits a community gets from the companies it
recruits.

That’s the method Jobs Plus of North Idaho uses,
said its director Bob Potter.

Potter’s two-person economic development operation
takes a yearly survey of the 70 companies it has
recruited to North Idaho since 1987.

Potter then produces annual figures tracking the
cumulative impact of those companies in terms of
salaries, capital spending, number of full-time
employees and amount of occupied building space.

Potter said the method takes into account negative
growth, job losses and business reductions.

“You’ve got to take into account your losses. That’s
a tough thing to do, but you end up with real
numbers that mean something,” he said.

Potter’s 2001 survey found that the recession and
other factors played a hand in job losses here.
Twenty of the North Idaho firms Jobs Plus recruited
have reported losing jobs during 2001, Potter said.

If Spokane’s EDC used the same method to track the
companies it recruited between 1994 and 1999, it
would show mixed results.

During those years, the EDC announced the
recruitment of 3,608 full-time jobs. In actuality, those
companies — some of which no longer do business
here — created a total of 2,787 jobs.

Between 1994 and 1999, 24 of the 62 recruited
companies made their job targets. The best year was
1995, when eight firms reached their goal.

In 1998, the only firm to reach its target was DCI
Engineers. It has 15 Spokane employees and
expected to have five.

Other firms that missed their targets were Harmon
Industries, Apollo College, Washington’s Employment
Security Department, Global Tactics, Borin-Halbich
and Nordan Distributors.

By February 2002, the 2,787 jobs had eroded to
2,574 due to recession, relocation or other business
decisions, a phone survey showed.

Spokane County Commissioner Kate McCaslin said
critics call the numbers a half-empty glass. She
prefers the positive view.

“That number (2,574) means we’ve gained 70 to 75
percent of the jobs they projected,” McCaslin said.

“Any organization that can get 70 percent results is
doing pretty good in these times and considering the
local economy.”

McCaslin is a strong advocate of economic
development efforts, and said the county should
continue investing about $300,000 per year in the
Spokane EDC.

The drop in the number of real jobs versus the EDC’s
projections is not unusual, said Donald Epley, a
professor at Washington State University Spokane.
Epley, who has been compiling growth data on
Spokane and Kootenai counties, said projections are
just that — an educated guess.

Epley also said the EDC’s goal of shedding a
jobs-only measurement is occurring across the
country.

“This is not a Spokane phenomenon. It’s a national
concern,” said Epley, fueled by debates on growth
management and economic vitality.

“More and more community groups are raising the
question of how one best measures their successes,”
Epley said.

Beyond simply trotting out numbers, development
groups need to ask if they’re recruiting the right kinds
of jobs, he added.

“I don’t know much about the (2,574) jobs recruited
here. But some jobs are more important than others.
You want jobs that pay people enough that they can
buy homes, or a car,” he said.

Spokane’s EDC hasn’t generated enough data yet to
determine the quality of those jobs. The recruitment
agency also needs to better establish how many jobs
really came from its efforts, Epley said.

“It’s worth asking how many of those jobs (between
1994 and 1999) would have come here anyway,” he
said.

State job data, for instance, shows that between
1994 and 1999, Spokane County’s nonfarm jobs
increased by 11,000 per year, on average.

“It’s difficult to document what proportion of those
jobs were created by one agency without details on
individual firm employment,” Epley said.

What’s the best way to measure how the EDC
performs?

Epley admits he has no simple answer. He advocates
the creation of data that tracks more indicators — not
just job growth, but home ownership, income levels
and building permits.

The result would be a measurement matrix that
includes social and environmental factors, not just
business statistics, Epley said.

He also contends that the EDC needs to be more
accountable for the money it spends.

“We citizens have a right to say, `We’ve given you a
lot of money. Why can’t you give us good data that
lets us measure the impact of your work?”’

EDC officials would embrace a broader, more
inclusive way “to track the health and wealth of this
community,” Turner said.

In the future, the EDC hopes to be a key partner in
defining a comprehensive economic development
plan, Turner said.

The EDC has moved beyond focusing on recruitment
of jobs, Turner said. It’s added job retention and
business support, helping existing companies expand
or at least survive hard times.

Turner also agreed that measuring job growth misses
other critical community indicators.

In late 2000, he addressed the Spokane City Council
to summarize recruitment successes and plead for
more funding.

He was feeling good about the EDC’s work.

“People in our business would give their right arm to
repeat the year we had just had,” Turner recalled.

He then sat down and listened as city Human
Services officials told the council about the growing
number of impoverished people in Spokane without
shelter.

“That meeting demonstrated how wrong I was
assuming there’s a strong link between job growth
and reduction in poverty,” said Turner.

http://www.spokesmanreview.com/news-story.asp?date=040702&ID=s1128458&cat=section.business