inputs our households and economies need . From the perspective of most readers , these are not controversial claims .
But some interviewees ( none working in economic development I should add ) saw little or no value in collecting and analysing economic data for anything relating to quality of life or well-being . This was because either they :
• Did not think local governments could influence economic metrics , so saw no reason to expend resources collecting data about the economy , and / or
• Did not believe that economic factors were related to personal or community well-being , so there was no point in measuring them .
It is true local governments cannot overly influence macroeconomic factors like GDP , interest rates or , for the most part , the number and types of jobs in the region . Although , it is equally true that local government EDOs can and do present data to lobby those who can more directly influence these factors .
However , these macro measures are arguably not what matters to local governments when deciding on economic development policies and initiatives . Consider GDP . We should all know by now that it is not only a generally pointless metric , but it can also actually be a misleading metric . That ’ s why international bodies have been actively talking about “ Beyond GDP ” for several years now . The UN has a strong commitment to try and drive global thinking beyond GDP so that international and national economic policies strive to achieve goals other than GDP growth .
As for whether economic conditions relate to personal or community well-being ; well , of course they do . I can appreciate what motivates the resistance to putting an economic lens on well-being . We risk making it all about money and not about people and life satisfaction . But without some baseline of economic security , no household or community is going to be particularly satisfied .
It is worth pointing out that all of the sceptics were from Australia where local governments do have a somewhat constrained role in economic development compared to , say , the US or Canada . Nonetheless , it was quite a surprise to hear the rejection of economic metrics as valid and useful inputs to local government decision-making .
SO WHAT MEASURES DO MATTER ? Economic prosperity matters . Economic resilience matters and economic selfsufficiency matter . But which indicators ? I ’ ve put a few together into the table below .
INDICATOR / METRIC
Unemployment rate by cohort
The income distribution of your community
Median household income
The proportion of income spent on discretionary goods and services
The depth of the labour and job market in ( or proximate to ) your municipality
The diversity of the job mix of both residents and local jobs by occupation and industry
The jobs or skills deficits
The proportion of residents employed by one or a few employers
The proportion of your workforce that is highly skilled
RATIONALE / COMMENT ECONOMIC PROSPERITY
One of the most important and simple metrics to tell us whether a community is prosperous or not .
Higher inequality indicates a disproportionate distribution of access to jobs , services and other aspects of quality of life . I ’ d recommend using something like the Palma Ratio to measure this .
A baseline understanding of local wealth
This shows the capacity to spend on non-essential things like holidays and a night out ).
ECONOMIC RESILIENCE
This tells you whether you have viable career pathways for workers in your area .
More diversity means less vulnerability to industry specific downturns , or automation of jobs .
The gap between the local skills required / available and local jobs sought / available ). This tells you whether you match local skills and jobs well .
A high-risk option if they go bust .
A better mix and level of skills means a more employable local workforce and one employers will seek out .
The ease of starting a business Job growth can be rapid in new businesses .
The proportion of your workforce employed in or running an SME
The ratio of local jobs to local workers
The overall economic health of the local main street
Whether a major event sponsored by a local government brought in visitor dollars that were spent with local businesses
Whether residents spend with local retailers or go elsewhere or even online
This is where most innovation is derived .
ECONOMIC SELF-SUFFICIENCY
The UN has a strong commitment to try and drive global thinking beyond GDP so that international and national economic policies strive to achieve goals other than GDP growth .
A high self-sufficiency ratio not only means you ’ ll have a robust - and therefore resilient - job market , it also means many residents will not have to commute too far for work .
A thriving main street does more than provide a space for commerce , but a main street does need commerce to thrive .
Local spending over and above what would normally be spent means you have a positive return on investment . If it goes into local cash registers , it means any inconvenience to local traders ( like traffic congestion ) is offset .
The great escape spend challenge . Encouraging your residents to spend locally is important for economic prosperity . It ’ s important , therefore , to know whether your initiatives are working .
ECONOMIC DEVELOPMENT JOURNAL VOL 17 NO 1 2024 27