California’s Assembly Committee on Jobs, Economic Development and the Economy (JEDE) held an informational hearing this week on Methods of Review for Economic Development Activities in preparation for upcoming oversight hearings of the Governor’s Office of Business and Economic Development. I had the opportunity to testify on features of program and organizational oversight, including methods for evaluating economic development activities. This post is a summary of my remarks.

1. Start with the big picture

Be clear on organizational goals and program objectives because this will determine what you want to measure. Too often, economic development goals “don’t exist, are too vague or are obsolete.” States are increasingly making sure that incentive programs, for example, explain their purpose and expectations for outcomes in order to facilitate evaluation.

2. Select evaluation metrics carefully

Metrics should be connected to the stated goals and strategies. Economic developers are increasingly looking beyond jobs and investment to capture how well their efforts address economic diversification, equity, and sustainability, among other goals beyond business development.

Be aware of data challenges when selecting metrics. Consider data availability, cost of obtaining data, data validity and quality, and timeframe.

3. Communicate findings

We are engaged in economic development because we care deeply about our communities and want to make them better places for residents to live, work and do business. It’s therefore important to communicate what we are doing and why. Evaluations can help tell this story. 

4. Approach evaluation and oversight with a collaborative attitude

Collaboration among the legislative and executive branches and the economic development organization will be critical for completing a quality evaluation as well as using the insights gained from the evaluation to improve economic development outcomes. The mindset should emphasize improvement – not punishment.

5. Devote resources to the effort

A high quality evaluation can’t be done in someone’s spare time. Create a team, give them time and resources (for data, analytical tools) and get outside expertise if it is needed.

I appreciated the opportunity to participate in this important conversation. More information on the JEDE Committee and its work is available here. Links to background reports and speaker bios from the March 1, 2016 hearing can be accessed here.