State economic development leaders exchanged ideas on incentive program impact and evaluation practices at the Workshop on Incentive Return on Investment in Washington, DC. Topics included evaluation design and objectives, ROI analysis, expanding the menu of metrics, and tools and techniques for communicating evaluation results.
Here are our top ten takeaways (in no particular order):
- States need to commit resources to the evaluation effort to generate good results. Quality evaluations require time, resources, and a skilled team to manage the effort.
- Evaluation is a process, not an event or a special project.
- Program evaluations should begin with a clear statement of goals and objectives. Metrics should be aligned with those goals and objectives.
- Distinguish between outputs (activities or deliverables) and outcomes (measures tied to program objectives). Evaluations should focus on outcomes.
- Jobs, wages and investment are the main metrics for most incentive programs – but aren’t necessarily the most appropriate. Community development, workforce and innovation/entrepreneurship programs require different measures to determine effectiveness.
- Data collection and management will be a challenge, but we have made great progress figuring out how to do this better.
- Be prepared to use a variety of methods to collect data and build metrics to conduct the evaluation. Most state economic development organizations administer dozens of incentive programs with multiple goals – there won’t be a one-size-fits-all solution.
- Use outside experts and researchers to help. They can bring specialized skills and experience to solve data and analysis challenges.
- Evaluations should be part of a dialogue with policymakers and other stakeholders that focuses on program improvement and achieving shared economic development goals.
- Use evaluations to help tell your story. Keep in mind the interests of your different audiences and adjust the message to provide them information they want.
The Workshop on Incentive Return on Investment was the third in a three-part series created as part of the Business Incentives Initiative, which is designed to “improve decision-makers’ ability to craft policies that deliver the strongest results at the lowest possible cost” by identifying better ways to assess and report on incentive programs. The first workshop on Business Incentives Data Collection and Management was held in Portland, OR, in June 2015. The second workshop addressing Business Incentives Project Accountability & Transparency took place in Minneapolis, MN, in July 2015.
The Business Incentives Initiative is a joint project of the Center for Regional Economic Competitiveness (CREC) and the Pew Charitable Trusts. Smart Incentives is pleased to be part of the CREC team working on this effort.