Friday, August 02, 2013

Economic Development Value for Loudoun and the Board of Supervisors

A currently evolving initiative of the Loudoun Board of Supervisors is to explore additional, or different ways to derive value from the current Economic Development Commission. The EDC is a non-partisan, volunteer group of very experienced Loudoun business owners and leaders, representing most business sectors, who are appointed by the BOS to directly advise them (collaborating with the Department of Economic Development, or DED) on topics regarding Loudoun's business economy.

The EDC is effectively the "unfiltered, expert voice of the entire Loudoun business community" for the BOS to draw upon - when considering or analyzing topics that impact Loudoun's economic development. This voice persists across BOS election cycles, economic conditions and Loudoun's growth and diversity of its business segments. This voice is fully public and transparent, accepting of all relevant input. It's not the only voice, but others such as the Loudoun Chamber, the SBDC/MEC, and the LCVA are more focused on the needs of the membership or participants (by design), or are otherwise self-limiting in terms of constituents.

The EDC is not only the active "voice", but the "persistent steward" of Loudoun's collective business community interests, strategy and brand. (Point of note - the Loudoun business community had zero online, Internet social media, brand or collective economic development/marketing value or stewardship up until 3-4 years ago, when the EDC's Marketing and Business Retention Committee (MBRC) began providing the BOS and DED with the knowledge, strategic input and tactical direction required to make this happen.)

At the heart of the conversation is the concept of "value" - of the EDC, for the BOS. So far, the EDC's "value" has in fact not been adequately expressed or shared with the BOS or the general public, nor has the BOS clearly expressed their requests or concerns in terms of "value". How should and can the EDC's value be expressed?

There is, of course, all manner of unquantifiable but professionally-acknowledged value derived from the EDC, directly and indirectly by the BOS. Business leaders (new and established; young and old; small and large; profit, non-profit or academic) actually have a balanced forum to find ways to add value, and be recognized for it (thereby encouraging more). Professional, relevant, sage advice and perspectives that the elected BOS does not have (neither individually nor collectively), and in many cases doesn't exist within the County Government, is readily available - and offered proactively. Real-time awareness, intelligence and feedback concerning the broader context of Loudoun's economic development opportunities is provided - including regional, national and international perspectives and experience.

This world-class advice is freely given and professionally packaged, with no expectations of personal gain or influence. It's quite unlike most of the rest of Washington, where the pervasive lobbying, business development and special interest organizations feed at the trough. The Loudoun BOS and their constituents are privileged to have such an asset, if only considering the "qualitative" value it generates. Without the EDC, Loudoun's political leadership would be far busier attracting and engaging with those peddling special interest influence - and therefore far less productive or capable, particularly from a strategic perspective.

EDC value can, in fact, be quantitatively categorized and measured as well - though this hasn't yet been attempted. Simply categorizing the types of value delivered, however, completely overcomes any of the simplistic, absurdly-shortsighted assessments of "excessive costs" the BOS has put forward to challenge the EDC's value - for example that County Staff spend about 46 hours a month directly supporting the EDC. At, for example, $60/hr., this is less than $3,000 cost.

The EDC value delivered comes in two basic flavors - "benefits" and "cost savings". The list of EDC benefits is long, including increased exposure, reputation, "in-kind" services, and actual new business for Loudoun. We'll not focus on these here, but on cost savings (a broad type of value that's been generally ignored to date) - which are harder to measure in a tangible way, but of no less value. Here are some example categories, examples and rough orders of magnitude of "value" that can become more quantifiable (given access to data and analytical resources):

Direct Cost Savings - EDC committee members, in particular, provide free information, analysis and guidance to county staff and BOS members, that they would otherwise have to pay for. Value can be measured in terms of hours multiplied by market value (per role), or simply market value (or "in-kind" value) of the information product.

Indirect Cost Savings - By independently researching, analyzing and packaging information for use by the BOS and DED, the EDC saves the County costs it would otherwise have to train its staff, hours spent gaining the requisite experience and access to resources, and hours spent developing productive industry relationships.

Shared Savings - Some output and relationship-based assets of the EDC are equally applicable to other segments of County Governance and BOS responsibilities - for example, transportation-related information developed to inform business development strategies is critical input as well to the Board of Education and to the County's Public Safety and Homeland Security mission.

Direct Cost Avoidance - Through its proactive, expert, collaborative assessments, analysis, expertise identification and published output (either in writing or recorded meeting minutes), the EDC enables the BOS to ask less of county staff in a reactive mode, therefore incurring overtime additional expenses - when a new or unplanned issue arises. Call it the avoidance of "startup" costs to address new issues. It's also the avoidance of known or unplanned costs due to mistakes, errors or other mis-steps - in other, "public sector" words, this is "government risk mitigation".

Indirect or Collateral Cost Avoidance - Through the diverse activities and representation of the EDC members in economic development-related areas, potential BOS work and expense can be avoided essentially by the "proxy" labor of the EDC members. For example, delivery to the DED of interactive marketing strategies can help avoid future expense to deal with PR or communications issues the BOS finds itself addressing. Participation of EDC members in economic development-driven analysis regarding STEM-related education and workforce development, helps the BOS avoid additional costs it would otherwise expend along with the Board of Education in responding to STEM requirements. Feedback and analysis published by the EDC (or available from its members) may be critical input to address future challenges or changes to things like the Strategic Plan, the County IT Strategy (which is another whole discussion), etc. - for example possible future impact assessments of the rapid growth of Data Center facilities, that while helpful and attractive from a taxes (high) and services utilization (low) perspective, may not necessarily offer what's necessary to accommodate future local resident and business community demands.

It's important to note that "lost opportunities" (i.e. loss of access and influence in attracting and retaining new commercial revenue sources), result in direct or collateral future costs (in re-starting, or duplicating the effort) that can and should be avoided.

Very back-of-the-napkin calculations using simple hours spent by EDC members - resulting in these Value Categories, yield orders of magnitude value BOTH in terms of benefits (i.e. new commercial tax revenue), and cost savings/avoidance.

Value that can be estimated and measured in tens to hundreds of thousands of dollars, if not millions (in recursive or compound value, over time). Value that comes from no other source, is utterly indispensable, and in fact demanded by the BOS electorate - whether as a direct or indirect beneficiary of the proven economic development results.

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