HomeMy WebLinkAbout01-23-2007 Council Economic Development Committee
AGENDA
City of Iowa City
City Council Economic Development Committee
Tuesday, January 23,2007
9:00 a.m.
City Hall
Lobby Conference Room
410 East Washington Street
1. Call to Order
2. Approval of Minutes of December 12,2006 Economic Development Committee
meeting
3. Status of BIOWA application for Community Development Funds through
IDEO
4. Final Draft: Economic Development Strategies, 2007-2008
5. Committee Time
6. Adjournment
NEXT REGULAR MEETING DATE: February 9, 2007
MINUTES
CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
December 12,2006
LOBBY CONFERENCE ROOM
Preliminary
Members Present:
Members Absent:
Staff Present:
Others Present:
Regenia Bailey, Connie Champion, Bob Elliot
NONE
Karin Franklin, Wendy Ford
Nancy Quellhorst, Joe Raso, Tim Kenyon, Irvin Pfab
RECOMMENDATIONS TO CITY COUNCIL:
None
CALL MEETING TO ORDER
Chairperson Regenia Bailey called the meeting to order at 9:01 AM.
APPROVAL OF MINUTES - NOV. 13.2006 ECONOMIC DEVELOPMENT COMMITTEE MEETING
MOTION: Bailey moved to approve the November 13,2006 minutes as submitted. Elliot seconded
the motion. The motion passed 3:0.
ACTIVITY REPORT - Economic DeveloDment Coordinator - WENDY FORD
Ford informed the committee of an initiative of the University of Iowa Obermann Center designed to get
Graduate Students involved in the community. The initiative was made possible in part by Linda
Schreiber of ICAD and a gathering of community leaders with Jennifer New of the Center. One element of
the initiative will be an event at the Public Library Tuesday, January 9th at 6:30pm. This will provide the
public with an opportunity to "network" with local graduate students. Sylvia Gail, a University of Texas
scholar and activist will give a talk about how universities and communities can collaborate effectively.
The Economic Development department marketing/advertising budget has provided a $100 sponsorship
for the event.
Ford noted that she has been attending meetings and events and gave a presentation on Iowa City's use
of TIF at the Iowa City Roundtable on Dec. 5. The presentation gives updates and enhances information
about local TIF projects. Chairperson Elliot commented on his presence at the round table and on the
good reception of Ford's presentation. Chairperson Bailey asked for a copy of the presentation. Ford
responded that she is working on getting that information loaded to the website. Nancy asked that the
information be sent to Dana Englebert for the Chamber of Commerce website as well.
Ford mentioned that she has been working on TIF debt certification. In the process of this Ford mentioned
that she has learned a lot about each active city TIF agreement. She provided a head-up that United
Natural Foods may not meet required employment thresholds by June, 2007 in order to qualify for their
100% rebate. In that event, they will receive less than a 100% rebate, the exact amount of which will be
determined by the "clawback" provision written into the agreement, which states $1667 per full time
(FTE) equivalent SHORT of the 300 FTE target will be deducted from the 100% amount.
Reauest For ProDosal document for Downtown Market Niche Analvsis
Ford described the request for proposals as collaboration between the City, the DTA, and the Chamber of
Commerce as each organization has strong interest in the market analysis for their individual purposes.
Ford described the scope as a three-part analysis of the downtown area to a) gain an understanding of
the current market conditions consisting of a business and building inventory, b) identify market
opportunities by sector and c) provide conclusions and recommendations for business retention and
recruitment, niche recommendations, space utilization, and marketing.
Bailey asked if a business and building database that already exists. Ford answered that there is a
database containing some of the information. The complete database will be useful to each of the
organizations. Elliot mentioned that input from entrepreneurs might useful to learn what they need -- such
as guidance and information. Franklin added that "tools for entrepreneurs to nurture new businesses"
should be included in the study.
Elliot asked if labor force surveys currently exist. Raso said that he has that information.
Economic Development Committee Minutes
December 12,2006
Page 2
Bailey stressed that we do not want a cookie cutter analysis and that ensuring the Iowa City authenticity
as an element of the analysis is important. Discussion ensued about possible outcomes, such as the
recommendation of creation of new events. Raso cautioned that basic "clean and safe" necessities of
downtowns tend to be pushed aside when cities look at ways to draw people to the downtowns. The
basics need to be covered first and then the higher-end features can be implemented.
Elliot inquired about who decides which consultant gets the contract. Franklin said that if the contract is
for less than $25,000 then the Economic Development Committee may decide and then the city manager
can sign the contract. If the cost is more than $25,000, a recommendation from the Economic
Development Committee must go through the city council. Elliot mentioned that he would like the council
"on board" anyway.
Bailey would like the top choices of consultants to give interview presentations. Bailey thinks it is
important to have a thorough understanding of the analysis from the contractor prior to making
recommendations.
In discussion about the end of the analysis process, Ford recommended there be an initial presentation
for discussion of the findings to the ED Committee, Chamber and DTA partners and another after initial
questions have been addressed. Franklin mentioned that the consultant should present to the Committee
who would then present the consultant's findings to the City Council. A public meeting regarding the
recommendations should also be held at the library between the two presentations given by the
consultant. To cut down on the cost of multiple presentations, Franklin suggested that one of the
meetings be for the Council and for the boards of the partnering organizations.
Raso suggested Ford ask Mainstreet Iowa about consultants they recommend to whom we could send
the RFP.
Community Development Fund (CDF) Application for BIOWA
BIOWA is a Trade Association working on building a database to link buyers for the waste stream
products of bio-based industries. They seek the City's support in the form of administration of a state
grant. No grant money would come from the City. In describing how the data base could work, Ford
shared the example of eggshell waste from one company used by another to produce skin care products.
Ford explained that she discussed the preliminary application with Cali Beals at the IDED. Beals'
reservations regarded the clarity of the cash match from BIOWA, but she said that the project is likely to
be funded as it is proceeding in the correct direction. The only commitment on the part of Iowa City is to
monitor the project; the funds are from the State. Bailey wants more information and assurance that staff
time for monitoring the project does not get out of hand though she is supportive of the project.
Raso mentioned that he had managed one of these types of projects and it did not require much staff
time. He said that there have been similar projects before and mentioned one that he thought was
through ISU, matching up waste streams but not necessarily bio-based. Ford said that Beals mentioned
this too, but sounds as though it had failed giving rise to some skepticism for the BIOWA project. Ford will
do further research on the other database in question.
Bailey inquired if the Committee was in agreement on giving Ford the go ahead to provide a letter of
support for the project contingent on receiving the necessary clarifications. The committee agreed to
allow Ford to provide a letter of intent to support the project, after which the council will vote on a
resolution to formally support the application. Franklin inquired about how the project will continue after
the year for which this application is to provide funding. Ford explained the CDF is designed to support
one-year projects, though the life of the database is expected to be ongoing and will be supported by
BIOWA.
ADJOURNMENT
The meeting adjourned at 9:53 A.M.
Economic Development Committee Minutes
December 12, 2006
Page 3
NEXT MEETING DATE: January 23,2007
Minutes submitted by John Dawson.
s/pcd/minutes/ecdev/2006/11-12-06.doc
Council Economic Development Committee
Attendance Record
2006
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2007
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CITY OF IOWA CITY
MEMORANDUM
Date:
To:
From:
Re:
December 29, 2006
Economic Development Committee (EDC)
Wendy Ford, Economic Development Coordinator
Community Development Fund Grant Application (IDED)
Following this memo you will find:
. a letter from BIOWA Executive Director further explaining the project
. a letter of intent from the City to support BIOWA's application to the state for a Community
Development Funds grant.
The letter of intent was submitted to the state with the application as per your contingent
approval at the Dec. 12 EDC meeting. Should the application be awarded grant funds from the
state, the award will be contingent on Council's approval for support of the application. A
resolution approving support of the application will be on the agenda of the January 23, 2007
Council Meeting. Mike Ott, Executive Director of BIOWA also plans to attend that meeting.
At the last EDC meeting, you agreed to support the application contingent upon BIOWA's
clarification of the finances and the use of grant funds requested. The applicant has provided
the necessary financial clarity for the project and has reworked and presented the budget and
financials as such.
Also, at the last EDC meeting, and following it with other City staff, there was some concern
about a duplication of efforts between BIOWA's database and the Iowa Waste Exchange
program. I have explored these differences and noted them below. Additionally, I have
emphasized to the applicant that the City is particularly interested in their cooperation with the
staff and directors at the Iowa Waste Exchange program to avoid any such duplication.
The chief differences between the BIOWA and IWE databases are:
. The greater level of chemical detail included in the BIOWA database
. The ease of usability and interface with the software in the BIOWA database
· The narrow focus on biobased waste streams and input needs that will enable staff to
focus on one industry segment and compile a useful database.
ITEM and COMMENT for January 23, 2007
CONSIDER A RESOLUTION SUPPORTING THE APPLICATION FOR A $48,000 GRANT
FROM THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT FOR BIOWA.
Comment: At its December 12, 2006 meeting, the Economic Development Committee
recommended the Council support an application on behalf of BIOWA, a biobased trade
association, for a grant of $48,000 in Community Development Funds through the Iowa
Department of Economic Development. The City's only role is to serve as grant administrator,
which will be done by the Economic Development Coordinator.
BI
WA™
BlOW A
325 E. Washington St.
Iowa City, IA 52240
Phone: (319) 621-8580
GROWING THE BIOECONOMY
December 21, 2006
Wendy Ford
Economic Coordinator
City of Iowa City
Dear Wendy,
BlOW A is excited to work with the City ofIowa City to obtain funds for an input/output matching
database through the Community Development Fund managed by the Iowa Department of
Economic Development. This letter will give you information on BlOW A, the proposed project
and budget, and the City ofIowa City's role.
BlOW A is a trade association for biobased products, headquartered in Iowa City. BlOW A has 70+
members, including stakeholders from all aspects of the bioeconomy such as research institutions,
farmers, biotechnology companies, commodity manufacturers and investors. Its mission is to grow
the bioeconomy, specifically to support the development ofbiobased businesses. It does so by
creating partnerships among local companies to increase their profitability. One tool which will
help create these partnerships is the input/output database.
This project will create a dynamic input-output database that will match waste streams with input
streams. This database has a level of specificity and manageability which goes far beyond any other
current project. The initial target market is companies focused on biobased products, with a
planned expansion to advanced manufacturing and other industries. BlOW A has a captive audience
with a need for this product and a drive to see this project succeed. BlOW A members are willing to
share information previously held confidential because of the opportunities which will be created.
Members will donate their time to assist in data gathering.
Data collected will be organized by both quantity and quality and can be updated instantaneously.
This makes a database that becomes exponentially more valuable as the data pool grows. This
forward thinking approach will make this project successful for BlOW A, its members and the state
of Iowa.
BlOW A would appreciate the support of the City of Iowa City and its willingness to serve as a
vehicle to bring state funds to our local community. Please contact me at (319) 621-8580 if you
have further questions.
Sincerely,
Michael Ott
Executive Director
The BIOWA Development Association is a non-profit organization dedicated to growing the bioeconomy in Iowa. It is
governed by a nine-member board of directors with representatives from various segments of industry including
biobased chemicals, biobased materials, biobasedfuels and energy, agricultural production, Iowa's Regents
Universities, investment banking and venture capital, and environmental and conservation. Please visit the BIOWA Web
site for more information at www.biowa.us.
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CITY OF IOWA CITY
Iowa Department of Economic Development
Attention: Susan Drake, CDF
200 E. Grand Ave.
Des Moines, IA 50309-1819
410 East Washington Street
Iowa City. Iowa 52240-1826
(319) 356-5000
(319) 356-5009 FAX
www.icgov.org
December 22, 2006
Dear Ms. Drake;
This letter is to document the City of Iowa City's intent to support BIOWA's grant application
for Community Development Funds. The Economic Development Committee of the City Council
discussed the application and will be recommending that the Council approve support of the
application at its January 23, 2007 meeting. Upon approval by council, The City of Iowa City will
serve as the fiscal agent for the project and will provide in-kind services to administer the grant.
The City is aware of apparent similarities in goals between the BIOWA database project and the
Iowa Waste Exchange (lWE) program, and would like to see the BIOWA project complement
IWE. In particular, we support the BIOWA project:
. Because the focus on bio-based waste and raw material needs allows for concentrated
efforts in gathering data on one of the Iowa Department of Economic Development's top
three most desired new segments of the Iowa economy.
. Because of the highly detailed chemical information the database will provide as a rich
source of raw material information for other and future bio-based manufacturers.
. Because of the grant, the database the State of Iowa will own the database and information
in it. As such, improvements or additions to existing databases, such as Iowa Waste
Exchange, may be gained because the development of the BIOWA database.
For the greatest benefit to Iowa, the City of Iowa City encourages strong communication
between BIOWA and the Iowa Waste Exchange program. This will ensure a minimum
duplication of efforts and help to create a source of waste stream information that is especially
rich in bio-based materials.
We will forward the council's resolution of support for the project as soon as it is recorded.
Sincerely,
Wendy Ford
Economic Development Coordinator
DRAF,.
City of Iowa City
Economic Development Policies
(initially adopted 8-29-95)
1. Diversify and increase the property tax base by 1) encouraging the retention and
expansion of existing industry and 2) attracting industries that have growth
potential and are compatible with existing businesses and industries.
2. Increase employment opportunities consistent with the available labor force.
3. Provide and protect areas suitable for future industrial and commercial
development.
4. Continue to cooperate with existing local and regional organizations to promote
economic development within Iowa City.
5. Improve the environmental and economic health of the community through the
efficient use of resources.
6. Consider financial incentive and programs to facilitate achieving the above.
City of Iowa City (January, 2007)
Economic Development Strategies (Calendar Year 2007-2008)
VISION
Iowa City aspires to be a global community defined by the creativity, diversity and
innovation of it citizens and businesses
MISSION/GOAL
To achieve a vibrant local economy.
OBJECTIVES (Areas of focus)
1. Foster the retention and expansion of primary sectorl existing business and
attract new business to Iowa City.
Measurables: 2 expansions; 2 new businesses; 0 business losses (of those we have
assisted); create/update marketing materials.
STRATEGIES
a. Have ability to respond as needed to infrastructure needs
. Plan and budget for Economic Development infrastructure in Capital
Improvement Plan, including roads, utilities, telecommunications, water and
sewer.
. Apply for RISE (Revitalize Iowa's Sound Economy) and other financial
opportunities for assistance
b. Market new and existing land for development and redevelopment
I See list following Objectives and Strategies.
DRAF,.
. Fully utilize LOIS (Location One Info System) system to post information on
the community, buildings and sites in the market
c. Design comprehensive marketing and presentation package in concert with ICAD
. Updated Community Profile
. Updated "How to do Business in Iowa City" pamphlet, to market Iowa City
. Updated Financial Assistance package information
. Zoning map and available land
d. Develop system of regular communications about business in Iowa City
. Maintain positive relationships with existing businesses with public
recognition of accomplishments including long term business in Iowa City,
good corporate citizens in Iowa City, permanent full time employee
. Act upon ICAD's annual retention surveys and gather information to evaluate
satisfaction with governmental and area support services.
. Build confidence of land owners for planning of commercial/industrial and
office growth
. Respond to selected set of targeted business leads through ICAD (Iowa City
Area Development Group)
. Through local media about positive economic climate in Iowa City
. Through city's Economic Development web pages
e. Review use of tax and other incentives to increase tax base through construction
of new facilities and/or additions to existing improvements
. Review, refine and improve program policies
. Review, refine and improve program application processes
f. Propose redevelopment plans and/or invest in public spaces in areas ofthe
community, such as South Riverside Drive, Towncrest, South Gilbert Street,
North Dodge Street and MuscatinelFirst Ave. Mormon Trek Extension, Aviation
Commerce Park commercial areas
g. Develop local, regional and state business network by active involvement and
presence with
. Chamber, Chamber government affairs committee, ICAD, CVB, IDED, PDI
. University of Iowa departments
. Mid-American energy
2. Support the Development of Downtown to ensure a healthy mix of retail,
services, entertainment, office, residential, lodging, and nightlife
Measurables: Begin implementation of program of marketing to commercial tenants;
retain existing retailers, gain 5 new businesses.
STRATEGIES
a. Facilitate market niche analysis for downtown
. Use as guide for implementing program of marketing available commercial
property
b. Create a fayade renovation incentive program
c. Explore development of creative business incubator
d. Capitalize on the Cultural district designation
1. Assist in the development of Entrepreneurial Businesses in Iowa City
2
DRAF.,
Measurables: support 10 new businesses
STRATEGIES
a. Market financial assistance programs via bankers, the web, & community
outreach
b. Explore possibilities of incubator development
c. Develop relationships with TIC businesses and opportunities for their expansion
in Iowa City
d. Collaborate with the Chamber's SEED program to initiate a small business
coaching system
e. Vse $250,OOO/year in CDBG funds to assist new businesses
4. Workforce Development
(Measurables: ensure workforcellaborshed data is shared with targeted industries,
benchmark Iowa City based companies' use of Expo at VI Career Center,
complete annual PR on permanent employment programs)
STRATEGIES
a. Be a partner in communicating the workforce business resources of the Cedar
Rapids I Iowa City Technology Corridor™ to business and industry.
b. Encourage and advocate local industries' use of VI Career Center EXPO for
internship and full time job po stings to attract/employ young professionals to
Iowa City
c. Create recognition program/positive PR opportunity for companies employing
permanent full time employees
d. Reserve dollars from City's CDBG funds for job training through companies'
career development programs (if allowable)
e. Maintain information about and actively support workforce development
strategies of Kirkwood Community College, ICAD and Priority One.
3
DRAF7
City of Iowa City Primary Sector
Industries and Technologies Opportunity List
This list identifies industries and technology groups that are compatible with the Iowa
City community.
The purpose of the list is to focus the City's proactive economic development activities
and ICAD's efforts on behalf of the City ofIowa City.
The focus of the City's proactive economic development activities will use this as its
preferred industry and technology list:
. to focus efforts on retention or expansion of existing businesses,
. to focus efforts on attracting potential business,
. and focus on locating new businesses and expanding businesses as permitted under
current zoning,
. as a guide for considering the offer of financial assistance,
. and will not discourage other industries and companies from seeking assistance.
The list includes these industries and technologies
1. Biocatalysis and Bioprocessing Research and Development
2. Communications Services
3. Computer Software Development/Computer Simulations of Complex Systems
4. Drugs/Pharmaceutical
5. Educational Services
6. Electronic and Other Electrical Equipment
7. Environmental Technologies and Energy Resource Alternatives Research and
Development
8. Insurance Services
9. Human Health and Medicine (Alternative Health Care Systems)
10. Light Manufacturing
11. Medical Instruments/Instruments and Measuring Devices
12. Music Recording Studios/Audio-Visual Production
13. Printing and Publishing (Public Relations/Graphic Arts/Design)
14. Value Added Agricultural Products
4
Using a Balanced Scorecard
to Measure Your Economic
Development Strategy
By Athar Osama, Ph,D. A common adage goes: "What gets measured, gets
done." Finding actionable and meaningful measures
for assessing economic development performance has long been a par-
ticularly challenging puzzle. Much of what happens in our regional
economies is a result of complex interactions among numerous actors
that are not understood comprehensively enough to permit well-
informed strategic planning. Our inability to measure the success or
failure of our economic develoPlnent strategies further denies us the
possibility to fine-tune, adapt and learn from them.
Senior
Executive,
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Yet we must not only engage in regional economic develop-
ment planning but also follow through with implementation
of our plans, often at great expense to taxpayers. We must
also continually evaluate our efforts and justify them by
demonstrating value to our communities. A well-function-
ing performance measurement system that could provide
credible, meaningful and actionable insights into the success
of our economic development strategies (or lack thereof)
would be a welcome addition to the economic development
professional's toolkit.
The measurement problem
The issues in performance measurement hover around two
key elements: namely, the performance metrics themselves
and the overall framework that holds them together. While
the choice of the right set of metrics is important - and is
partly determined by a host of technical and political factors
- the difficulty of constructing an overall framework in
which these metrics must be organized to present a coherent
story about a region's economic development strategy is vast-
ly under appreciated.
Setting up such a framework requires answering ques-
tions such as:
. What constitutes success in economic development,
and how should it be measured?
· Do simple metrics suffice, or should composite meas-
ures be developed?
. How should these metrics be organized into a system of
measurement that provides actionable guidance to key
stakeholders?
* * * 26 Economic Development America FA L L 2 0 0 6
. How should the information gleaned from such a per-
formance measurement system be used?
. How should various kinds of metrics (e.g., leading
indicators vs. lagging indicators, qualitative measures
vs. quantitative measures, hard financial measures vs.
soft measures and tangibles vs. intangibles) be bal-
anced?
Such choices continue to challenge the profession, and
thus undermine the successful implementation of even the
most carefully constructed strategies.
In a 2004 survey of economic development organizations
(EDOs) conducted by Brigham Young University, 93 percent
of respondents indicated that they were likely to increase
their use of performance measures in decision-making, yet
only 20 percent thought that performance measures were
effective in increasing awareness of program results, setting
strategies and improving programs. It is worth noting here
that we are not yet introducing the performance measure-
ment framework, only the performance measures them-
selves!
This lack of perceived utility of performance measure-
ment may be explained partly by the absence of an organiz-
ing framework that transforms a bundle of performance
metrics (data) into insightful and actionable guidance (infor-
mation), and leads to learning about the region's economy
and the multi-faceted relationships among various actors in
the economy (knowledge).
Practitioners often do not understand many of the intri-
cate relationships among various political, social and eco-
nomic actors that intervene between their actions (causes)
and the results (effects). Performance evaluation must, there-
fore, generate knowledge as it consumes information and
iteratively improves our understanding of how our
economies respond to our actions.
The good news is that there is a strategic planning and
performance measurement approach that provides coverage
for most of the critical ingredients of a comprehensive per-
formance measurement system.
Introducing the Balanced Scorecard
The Balanced Scorecard originated in a 1992 Harvard
Business Review article by a Harvard professor, Dr. Robert S.
Kaplan, and a consultant, David P. Norton, titled "The
Balanced Scorecard - Measures That Drive Performance."
The problem that these individuals were trying to address
was the predominance of financial metrics in measuring
organizational performance. Organizational performance,
the authors argued, must be measured in a balanced manner
that takes into account the additional dimensions of per-
formance critical to an organization's success. The original
Balanced Scorecard used four dimensions (referred to as per-
formance perspectives) to assess an organization's perform-
ance: financial, customer, internal business process, and
learning and growth.
./ Financial ~
Perspective
00 ~ Internal
Customer. Process
r~ Perspectiv~ Perspective
I
~ Learning & ./
Growth
{
Perspective
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Figure: A Traditional Balanced Scorecard
The Balanced Scorecard itself has undergone major trans-
formations through customer-driven innovation. Over the
last decade, it has evolved from a system of key performance
indicators to a communication system that provides strategy
awareness and focus throughout an organization, to becom-
ing the focal point of an organization's strategic planning
and performance measurement activities.
In the process, the Balanced Scorecard has become a new
management paradigm in the corporate world. According to
one estimate, over 50 percent of all Fortune 500 companies
have implemented a Balanced Scorecard. A Balanced
Scorecard "Hall of Fame" has been established by Kaplan and
Norton to recognize those organizations that have imple-
mented the Balanced Scorecard in its true spirit and have
achieved breakthrough results. In addition to its use in cor-
porate settings, the Balanced Scorecard has been used across
the entire spectrum of organizational types, including gov-
ernment, non-profit, healthcare, academia, research and
development, and education sectors.
Creating an Economic Development Balanced Scorecard
The process of creating a Balanced Scorecard begins with
understanding the key dimensions of organizational per-
formance. As Balanced Scorecards have been implemented
across different organizational types, they have been modi-
fied to incorporate the reality of those organizations. For
example, while the financial perspective may represent the
bottom line for corporate entities, it does not represent the
objective of organizational performance in mission-driven
public sector agencies. Consequently, proponents have intro-
duced organizational mission as the overarching goal in these
circumstances. EDOs fit this model.
While the precise structure of each EDO's Balanced
Scorecard may vary, a generic architecture could comprise
the following dimensions of performance
. Organizational Mission - An EDO's mission, rather
than financial profitability, represents the bottom line
for its performance. EDOs differ in terms of what they
are expected to achieve. Some are charged with creating
jobs and attracting businesses to a particular region,
FA L L 2 0 0 6 Economic Development America 27 * * *
others are tasked with making investments in human
capital, and still others have multi-dimensional mis-
sions. Whatever the mission of an EDO is, it must be
adequately defined and measured in the organization's
Balanced Scorecard. Everything else that an organiza-
tion does - and measures - must directly support its
overall mission.
. Customer (Stakeholders') Perspective - While it may
be possible to objectively measure how well an organi-
zation is achieving its mission, customer satisfaction is
often a leading indicator of how well an organization is
performing. An EDO must deal with a number of dif-
ferent kinds of customers, ranging from the general
population to businesses in the region to the govern-
ments that provide legitimacy to its work. Each of these
types of customers - or stakeholders - must be satisfied
if the organization is to adequately achieve its mission
and continue to exist.
. Financial Perspective - While non-financial measures
may represent an EDO's overall success (e.g., number
of jobs created, rather than profitability achieved),
financial performance is still important to an EDO's
ability to carry out its task. For one, it must raise
money against competing demands, complete its proj-
ects within budget and bring money into the economy.
Many of these factors are both a cause and an effect of
an EDO's ability to satisfy its customers, but they must
also be measured independently within the financial
perspective.
. Internal Process Perspective - In order to achieve its
mission and deliver on its customer and financial goals,
an EDO must execute a set of internal processes. They
may include prospecting for potential corporate candi-
dates, running training programs for its own staff,
making calls on corporate leaders to understand their
issues, and managing a "one-stop-shop" for business
support. These processes are important ingredients of
the cause-and-effect chains that link organizational
inputs (investments and activities) with outputs and
outcomes.
. Learning and Growth Perspective - The learning and
growth perspective represents the foundation on which
an EDO's performance is built. It includes staffing,
infrastructure and technology that go into executing
internal processes. For example, an EDO might hire
new staff or create an internship program to develop its
capability to carry out an initiative that may in turn
enhance its ability to carry out its mission. Alternative-
ly, it might make an investment in its staff by providing
new technology (such as a mobile communications
device) to improve their productivity, which may in
turn lead to better performance. In essence, it is making
investments in certain inputs which are then consumed
in the internal process in order to generate results for
the organization. These inputs form the foundation on
which an organization's performance is built, and must
be measured in the learning and growth perspective.
* * * 28 Economic Development America FA L L 2 0 0 6
(
EOO's
Mission
)
Customer
pe'rspective
Financial
PerSpective
,
'---
~
Internal
Process
Perspective
l
Learning &
Growth
Perspective
Figure: Balanced Scorecard for an EOO
The Balanced Scorecard's perspectives provide a lens
through which the leadership looks at objectives, strategy,
processes, and capabilities. It relies on a participatory process
to identify and discuss strategic objectives; identify relevant
stakeholder segments and develop specialized strategies for
each segment; review and implement organizational process-
es to implement these strategies; and develop the various
capabilities, skills, equipment, and infrastructure to enable
the organization to implement these processes. These activi-
ties are linked by a chain of causality that runs from organi-
zational capabilities to internal process to stakeholder satis-
faction to financial results, and finally to the achievement of
the organization's mission.
Often as a result of the process of putting together a
Balanced Scorecard, performance measurement and data col-
lection systems are put in place to measure the strategy itself.
i This metric makes the organizational strategy the centerpiece
of its performance measurement system, helping to avert
misalignment between what an organization is designed to
achieve and what gets measured.
Scaling the strategy down - or up
Once the top-level strategy has been developed and agreed
upon, each organizational sub-unit creates its own strategy
for achieving its obligations towards the larger organizational
strategy. As the process cascades down the hierarchy with
multiple levels of Balanced Scorecards being developed and
deployed, the goals of various sub-units and that of the larg-
er organization are aligned. A similar effect can be achieved
throughout an economy when an EDO's Balanced Scorecard
is scaled up into city, regional and state Balanced Scorecards.
Once this process of strategy-making and scorecard
development has taken place, each sub-unit's actual perform-
ance is measured against its own targets and is monitored on
a regular basis. The Balanced Scorecard thus becomes a
means to focus energies toward what is important. It is often
claimed that the Balanced Scorecard simplifies and commu-
nicates the strategy and brings laser-like focus to an organi-
zation's goals, thus making strategy everyone's job. Balanced
Scorecards also are used as a communications tool at man-
agement and board meetings, helping focus discussion on
measuring progress toward the organizational strategy.
This process also leads to learning across the organization
- detecting discrepancies between achieved and targeted per-
formance, analyzing their causes, and suggesting possible
remedial actions. Using metrics to support a cause-and-effect
model of organizational performance, the leadership can
also, over time, test hypothesized relationships between
inputs, process and outcomes, and update their own mental
models of organizational performance.
A Balanced Scorecard may seem like a simple way of
organizing an EDO's strategy and performance activities, but
it is not simplistic. Over half of the organizations that claim
to implement a Balanced Scorecard do not do so in both let-
ter and spirit. They do not, therefore, achieve the benefits
that are available. Understanding the intricacies and nuances
of the various steps that go into the construction of a well-
functioning Balanced Scorecard is critical to implementation.
Thinking through the underlying philosophy of the Balanced
Scorecard as it applies to commercial entities and adapting it
to EDOs is an even more important consideration. * * *
ANGLE Technology Group (www.angletechnologyus.com) is an
international technology-based economic development and
technology commercialization cconsulting, management, and
venture capital company. For more information and comments,
contact the author at athar.osama@angletec.com.
FA L L 2 0 0 6 Economic Development America 29 * * *