Everyone wants to be successful. Individuals and businesses alike spend long hours and much effort pursuing success. Success is often a never-ending chase, as the goalposts tend to move when one accomplishment is achieved.
So how do we measure success related to the goal of regional “economic development” efforts? There are a number of tangible performance measures that we hope to achieve with the implementation of the 2014 Eagle County Economic Development Plan (a copy of which can be found at vailvalleypartnership.com).
Here are some of the measurements that will help us define success:
Eagle County was 22 percent below the statewide average weekly wage in 2012 and 17 percent below the statewide average earnings per job in 2011. Given the relatively high cost of living in the county, the imbalance on these two interrelated metrics is unsustainable and erodes the local community fabric. The five-year trend has shown that the year-to-year gap between Eagle County and the state on these measures has increased steadily between 2008 and 2012. Although the Eagle County average weekly wage has had positive growth since 2011, local growth was still less than statewide. Therefore, reversing the trend seen in the growth gap so that local figures begin to converge with state figures is the first step in trying to close the overall disparity seen in average weekly wage. A three-year goal to do so is ambitious, but critical for overall health. Exceeding the state year-to-year growth rate by 0.5 percent in each year thereafter is realistic and necessary to bring local average weekly wage and average earnings per job up to state levels over time.
Increase Number of Jobs
Eagle County saw significant losses in the number of jobs between 2008 and 2010, but this trend reversed between 2010 and 2011. In 2011, there were 7 percent fewer jobs than in 2008. Therefore, increasing the number of new jobs by 1.5 percent each year over the next five years will result in the desired outcome of returning to the 2008 number of jobs in Eagle County. It is important to note that quality of new jobs is an important related factor that is part of the business heath indicator.
Increase sales tax revenue: Eagle County saw significant losses in sales tax revenue between 2008 and 2010, with a single year loss of 20 percent between 2008 and 2009. Although this trend reversed between 2010 and 2011, in 2012 there was still 17 percent less sales tax collected than in 2008. Therefore, increasing this revenue by 3.8 percent in each year over the next five years will result in the desired outcome of returning to the sales tax revenue collected in 2008.
Setting an annual population growth target of 2 percent per year for the 25-59 year old age category would represent slow, but steady growth. Maintaining this level of growth in this segment of the population, along with realizing the desired growth on the other indicators, would ensure that this year-to-year increase would largely be driven by key desirable subgroups of the populations (i.e., individuals with self-sustaining jobs).
In 2012, Eagle County had an unemployment rate that was over double the 2008 rate. In 2003-2007, annual unemployment rate varied from a low of 2.9 percent to a high of 4.8 percent. Holding the labor force size constant and reducing the unemployment rate by 10 percent per year will result in an annual unemployment rate of less than 5 percent within five years.
An additional metric for understanding business health is an Economic Stress Indicator, which looks at year-to-year changes in both the number of individuals in the labor force and the number of individuals employed. The year-to-year growth ratio in the labor force is subtracted from the year-to-year growth ratio in employment. Positive values indicate a more favorable year-to-year growth balance on the two combined factors. Increasing the labor force by 2 percent per year while holding Economic Stress Indicator at positive .005 or greater would reflect strengthening business health and would result, within five years, in an overall number of jobs similar to what was seen in 2008.
In sum, successful local economic growth in the context of an economic development plan means:
• Strong, sustainable growth of individual incomes and sales tax revenues
• Healthy population growth
• Increased business longevity
• Diversification of industry for year-round availability
• Job opportunities with promotional potential
• Viable business opportunities for entrepreneurs
Stay tuned for more on our economic development plan and future efforts in the coming weeks as we review what’s happening at a regional and state level – and how it ties to our efforts to achieve success at a local level.
Chris Romer is the president and CEO of the Vail Valley Partnership.