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Survey: Government Economic Development Needs Improvement

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Posted by Heidi Schwartz

Most government leaders agree that the economic development of their state or municipality is increasing in importance, but 88 percent say their current economic development efforts are only somewhat effective or not effective at all, according to a recent survey. The study, published by Governing Institute and Crowe Horwath LLP, found that government leaders think their economic development processes could be improved by enhancing and updating business processes.

Economic development falls shortCrowe sponsored the research study, “Powering the Engine of Economic Development,” in which 168 senior state and local government officials were polled to assess the utilization, strategy and tools governments are using for economic development and job growth. Key findings include:

  • Overall, 82 percent of the respondents said that economic development is an area of increasing importance;
  • Seventy-four percent of the respondents thought there is a need to streamline business processes to enhance economic development;
  • Seventy-three percent of the respondents agreed with the statement, “We need to improve our reputation as an engine of economic growth and a good place to do business;”
  • Fifty-two percent of the participants said they believe their respective governments are prepared to offer incentives to lure other organizations; and
  • More than half of the respondents said that more modern technology systems would allow for more effective development.

In the study, government leaders revealed that the lack of modern technology and processes creates problems, such as uncoordinated strategies among departments and untracked or incorrectly tracked data.

“When individuals or departments within the same entity are unable to work easily with one another, it can lead to inconsistencies or even contradicting strategies,” said Bob Lazard, managing partner of Crowe government services. “The key is to find the right way to share data among disparate individuals and groups.”

For example, to monitor and record economic activities, governments can use automated tracking systems such as customer relationship management (CRM) systems, enterprise resource planning (ERP) systems and grant management systems (GMS). Despite the value of such systems, only 15 percent of the survey respondents have a CRM system and fewer than a third of the respondents have an ERP system.

“Tracking activities such as grants or tax incentives is vital to making decisions in government entities,” said Lazard. “It’s possible that wrong or ill-informed decisions will be made when leaders are unable to measure the efficiency or revenue of an activity.”

Without automated tracking systems, coordination and well-defined benchmarks, it also may be difficult for government entities to prove their return on investments or initiatives. This can make it hard for the organization to exhibit the need for an initiative when money is being allocated from an already tight budget.

In the study, government leaders revealed that the lack of modern technology and processes creates problems, such as uncoordinated strategies among departments and untracked or incorrectly tracked data.

“When individuals or departments within the same entity are unable to work easily with one another, it can lead to inconsistencies or even contradicting strategies,” said Bob Lazard, managing partner of Crowe government services. “The key is to find the right way to share data among disparate individuals and groups.”

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About The Author

Schwartz joined Group C Media in April 1989 as managing editor of Today's Facility Manager. In September 2012, she transitioned to a new role dedicated to developing online content for Business Facilities and Today's Facility Manager. Schwartz can be reached at [email protected]

Number of Entries : 613

Comments (2)

  • Will Tyler White

    Even with the best technology and data, if there is weak organizational leadership or lack of buy-in from each and every department staff member, the ED efforts are going to be hamstrung and unlikely to have much effect.

    Technology and data is a good place to start though!

    Reply
  • Bill demuth

    Will is correct regarding buy in and leadership. Technology is being used at most state organization s the challenge is finding prospects before they knock on the door for incentives. As far as return on investment do a break even analysis net new taxes divided by incentives. What you existing business tells a prospect is probably most important so do your best to keep the customer happy. May also want to pay attention to the community/area it is home for new business as well as existing business and current and new residents
    In summary it is not a secret what needs to be done it takes leadership and private money to get it done and sustain it. Oh a little luck never hurts.

    Reply

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