News from the Tennessee Valley State, Local and National news
SUNDAY, MAY 20, 2007

Where do we go from here?
Looking for measurements to gauge area’s economic development

By Eric Fleischauer · 340-2435

Where do we want Decatur to go, and how do we get there from here?

Measurement is the key, explained Jeff S. Thompson, senior business adviser with the Office for Economic Development at The University of Alabama in Huntsville.

Thompson does not pretend to know how residents would describe the perfect Decatur, but he has information on how to measure progress once residents decide what Decatur should be.

Thompson would like to see Decatur — preferably in conjunction with communities in Morgan, Limestone and Madison counties — develop an economic performance index. The index would track numerous measurements that are significant to Decatur or the region. By tracking measurable data, it would be a springboard to strategies for improvement and a tool for measuring the success of those strategies.

Thompson pulled together some cursory data to explain the concept. Some of the data is disturbing. Decatur’s work force is shrinking as the elderly retire at a faster rate than new workers take jobs. Our population rate is flat while neighboring communities grow.

The average wage for Decatur workers, adjusted for inflation, has been sinking for years.

Those metrics suggest that wherever it is we want to go, we’re not headed there.

Measurements don’t always present a picture of our community that we like, Thompson explained, but they give us the ability to make targeted change.

Measurements also give us the ability to determine whether our changes have been effective.

Thompson pulled some easily available data on Decatur to explain how indexing economic performance works.

  • Since 1997, the number of building permits issued in Decatur has trended upward.

  • Eighth-graders in Decatur City Schools scored lower on standardized math and reading tests than many school systems in the region, but those scores are increasing.

  • Home values in Morgan County increased 13 percent between 2000 and 2005, compared to 30 percent during the
    same time period in Madison County.

    By choosing indicators the community finds important and tracking them over time, the community can embark on improvement strategies.

    Just as importantly, it can measure the success of those strategies.

    Thompson uses a narrow example.

    Ways to success

    “There are two strategies for economic success,” Thompson said. “You can add more people employed at the same level each year and you’ll grow your economy even though everybody’s making the same amount of money. The other strategy is to keep the same number of people — a steady population and labor force — and increase your wages.”

    Decatur, though, is doing neither. Its labor force is flat, suggesting that what slight population increases it is experiencing reflect an increased rate of elderly people leaving the work force.

    Its wages are declining relative to inflation.

    How to correct the problem? There are numerous approaches, almost all of which are susceptible to some form of measurement.

    Thompson suggests, for example, that Decatur might need to make a more concerted effort at attracting industry that
    complements Huntsville’s concentration in research and design.

    That might mean developing an industrial park designed to attract a pharmaceutical company, or to attract defense contractors.

    “If Decatur ignores what’s happening in Huntsville and doesn’t benefit from it, it’s missing an opportunity.”

    Thompson said he would ideally like to see a collaborative effort that included Morgan, Limestone and Madison counties. Measuring the economic interaction between the counties, and using complementary strategies, could benefit all three.

    Tracking particular economic indicators also may militate against actions that at first glance seem promising.

    “If you have 100 new jobs coming in that pay $15 per hour, but your current per capita wage is $16 per hour, it may sound good in a press release,” Thompson said. “But you’ve just zapped your economy.”

    Providing economic incentives to a prospective employer that will reduce the average wage, therefore, probably is a bad idea.

    Job growth vs. wages

    “An easy way to measure success is to look at job growth and compare it to your average wage. If you’re growing at the high end, over your average wage, then your economy is moving ahead,” Thompson said. “If your growth is in minimum-wage jobs, then it’s not.”

    Thompson was troubled by various state-supplied measurements of educational progress in school systems throughout Morgan County, which he said suffered in comparison to Madison County schools.

    This is a major economic development issue because of the demographics of the labor force. Only about a third of the population has school-age children at any given time, which would seem to reduce the economic significance of educational opportunities.

    The problem: The third of the population with children overlaps almost entirely with the labor force.

    Thus, he said, improving student test scores is more than an educational issue. It’s an issue of economic growth, especially for a city trying to attract and fill higher paying jobs.

    Thompson said another measurement some cities use is sewer mileage. Because the measurement is closely linked to the rate of residential development, it can be a useful
    measurement of economic progress.

    In a city like Decatur, he said, measuring recreational opportunities also may be wise. How clean is the river from year to year? How many boat slips are available?

    Understanding the index

    The easiest way to understand the economic performance index concept that Thompson proposes is to look at an existing one.

    The Silicon Valley has the Cadillac of economic measurement tools, and leaders attribute the region’s success in large part to the sustained effort, which began in 1992.

    Every year, Silicon Valley Joint Venture publishes a catalog of data showing advances and declines in dozens of measurements.

    It evaluates the success of strategies based upon these measurements, and the measurements become the foundation of other strategies.

    While the Silicon Valley group measures the basics — unemployment rates, population, average wage and the like — it does much more.

    The entire report is available online at www.jointventure .org.

    Among the measurements reported annually: patents issued to residents; employment and pay rates by industry cluster; graduation rates; child-care availability; immunization rates; crime rates; mileage of bike lanes; charitable contributions and even voting participation.

    None of these is a dispositive measure of a community’s success, explained Thompson, but all provide ways of measuring a community’s progress toward given goals.

    Pick another city

    A good starting point, Thompson said, would be to decide on another city, preferably in another state, that while
    similar to Decatur has characteristics that we wish to emulate.

    He provides no proposals,
    but he suggests some guidelines. The city should be on an inland river or lake, as is Decatur.

    It should be within 50 miles of a larger city, as Decatur is adjacent to Huntsville.

    Maybe his best advice on selecting this starting point comes as an aside.

    “I have a 12-year-old daughter and odds are she will not be in this area when she grows up,” Thompson said.

    “I would like to make it so that she has an opportunity to choose to stay here.”

    What city has basic similarities to Decatur, but would be more attractive as a future home for our children? That city, whatever and wherever it is, can provide a loose model for a Decatur makeover.

    Can we measure ourselves to a better Decatur? Thompson thinks so.

    “Decatur should be proud of itself,” Thompson said.

    “Whatever it wants to be, it can be. I think it’s proven that. Unfortunately, that does not necessarily carry into the future.”

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