Evidence-Based Decision Making. OMAFRA s Analyst Tool for Economic Development Professionals

Transcription

1 Evidence-Based Decision Making OMAFRA s Analyst Tool for Economic Development Professionals Regional Economic Development Branch, Ontario Ministry of Agriculture, Food and Rural Affairs EDCO Spring Symposium May 17, 2017

2 Learning Objectives Understanding REDB Services and why this program is offered How to navigate Analyst to access the information your organization needs An overview of economic modelling and its connection to economic base theory An introduction to Analyst s newest feature: input-output modelling Uses, considerations and limitations of input-output modelling How to access Analyst 2

3 Agenda First Half 1. Introduction to Evidence-Based Decision making: REDB Services & Analyst 2. Navigating Through Analyst

4 1. INTRODUCTION TO EVIDENCE- BASED DECISION MAKING: REDB SERVICES & ANALYST

5 What REDB does: Develop and deliver leading edge economic development resources that support thriving rural, agriculture, and food economies Rural Economic Development and Agriculture Economic Development We develop and maintain a suite of economic development programs, resources and tools. We enable economic development in rural economies, and agriculture and food sectors through facilitating, coordinating and delivery of appropriate advisory services, resources, programs and information to our clients. 5

6 REDB s Approach to Service Delivery Targeted client and program delivery approach Team based approach that focuses on collaboration Regional service delivery network, providing the Ministry with efficient geographic coverage Measure outcomes Research & Develop Support evidencebased planning Coach & Training 6

7 Our Programs, Services & Resources Support clients in the planning and implementation of their economic development activities Programs & Resources CED 101 Workshops Lower Capacity Higher Capacity Strategic Planning First Impressions Community Exchange Community Immigration Retention in Rural Ontario Regional Advisor Services 7

8 Our Programs, Services & Resources Support clients in the planning and implementation of their economic development activities Programs & Resources Business Retention & Expansion Economic Development Analysis Resources Lower Capacity Higher Capacity Performance Measurement Downtown Revitalization Rural Economic Development Program* 8

9 Benefits of Data and Research for Economic Development Data analysis is the foundation for understanding a regional economy: Identify the local assets and potential liabilities that will affect local/regional economic development Project local economic trends Market the community effectively Monitor economic performance over time 9

10 What does an Evidence Based Approach mean? A Common Approach Opinion/perception rule Limited context for decisionmaking Subjective personal policy preferences Accountability under-valued An Evidence Based Approach Based on facts Understanding of regional economies Analysis informs strategies Actions monitored and evaluated 10

11 Data in the Decision Making Process 11

12 Methods to Analyze Your Local Economy: Expert Judgement Description Advantages Assumes certain sectors (e.g. manufacturing, mining, agriculture) are driving exports, and assumes all employment in those sectors is basic. Relatively simple and inexpensive Relies on readily available data Disadvantages Requires local knowledge to allocate employment Does not account for industries serving local and external markets May be influenced by incorrect perceptions 12

13 Methods to Analyze Your Local Economy: Location Quotient Description Advantages Determine if a region has a greater share of industry than the provincial or national economy. Highly flexible variables and reference geographies Calculated with readily available data Disadvantages Sensitive to the size of the region Sensitive to the level of industry Does not reflect productivity well 13

14 What is Analyst?

15 How can Analyst Help a Community or Region? Analyst provides insight into local, regional, provincial and national workforces: What are the occupations in high demand by industries? How many local jobs are filled by commuters versus local residents? In what industries are specific occupations growing and/or projected to grow? Which are declining?

16 How can Analyst Help a Community or Region? Analyst provides insight into local, regional, provincial and national industries: Which industries are largest sources of jobs and income? Which industries are growing? Which are declining? Which industries is the region highly competitive for?

17 About EMSI Data EMSI uses multiple Stats Canada resources to create a single, complete picture of regional economies: National Household Survey (2011) Canadian business patterns (CBP)/Canadian business counts (CBC) (June June 2016) Labour Force Survey (LFS) ( ) Survey of Employment, Payrolls and Hours (SEPH) ( ) Census (2001, and 2006) Canadian Socio-Economic Information Management Demographics (CANSIM) ( ) Canadian Occupation Projection System National Symmetric Input-Output Tables (2011) 17

18 2. NAVIGATING THROUGH ANALYST

19 Overview of Data in Analyst Location size distribution (Statistics Canada, Canada Business Patterns) Labour flows Industry employment Occupation employment Staffing patterns Demographics (population by age and gender) Education data

20 What is Located on the Homepage Task Cards

21 What the Toolbar Can Do The toolbar manages five major things: Home page button (Ontario logo) Reports Groups Support Search bar Account details

22 How to Search for Data (Search Bar) You can choose from industries, occupations, and programs that relate to what you typed in

23 Industries Contains: Industry Overview Industry Table Industries by Location (GIS) Economy Overview Highest Ranked Industries Other Reports (e.g. lowest/highest ranked, Regional Comparison, Industry by Location Size, Staffing Patterns)

24 Industry Table When you click the Industry Table, you get the industry employment data table Industries classified using NAICS Select Industries allows to you to control the level of NAICS detail All Available Limit by Industry Browse Groups Search Box (click in and type what you are looking for)

25 Industry Table Select a Region Data is available for all municipalities in Ontario and Canada Users can create their own custom regions Browse Groups Search Box (click in and type what you are looking for) Select the data you would like to display Jobs & Growth Location Quotient Shift Share Custom Data Selection (Jobs, % Change, Earnings, LQ, Shift Share) Once you have the parameters that you want click run

26 Industry Table Timeframe Lets you change the report period by selecting different start and end years Class of Worker Employees, Self-Employed (wage data does not exist for the selfemployed, and Complete NAICS detail All levels, 2-Digit, 3-Digit, 4-Digit Filter Filter industries based on user defined criteria

27 Export Function Export button gives option to export data to Excel, Word, or PDF Scissor icon allows user to clip specific reports

28 Economy Overview Contains industry overviews for a region Clicking on light boxes will get you data in a light box without sending you away from the page The Jump to button brings you to a new table with a more complete perspective on each piece of data

29 Overview of Data in Analyst Groups: Richard Florida s Creative Class super creative class creative class working class Fishing/farming/forestry Purdue University Regional Clusters 22 industry groups

30 Working with Analyst to Answer a Question Examples of the types of questions we can easily answer using industry tables: Which industries are growing the fastest? Which industries are declining the fastest? Which industries have the highest wages? Which industries employ the most workers? Which industries are most heavily concentrated in a region? Then we can ask variations on these questions, as well as mix and match them so we can answer questions like: What are the fastest growing industries with above average wages?

31 Working with Data: Demonstration From the Analyst homepage we can get to the Industry Table by clicking on the research industries box, then by clicking Industry Table Select Industries All Available Set your Region Select the data you would like to display (Jobs & Growth, Location Quotient) Custom Data Selection Click Run Earnings: Current Total Earnings Timeframe ( ), class of worker: employees Set the NAICS industry detail to 4 digit

32 Manipulating the Data Table Simply click any of the column headings and the table will sort in descending order by that column Click the same column again, it will now be sorted by ascending order What are the fastest growing industries for ? If you click the change column and wait for the table to re-load, you get the industries with the most growth sorted in descending order

33 QUESTIONS

34 BREAK 10 MINUTES

35 Agenda Second Half 1. Input-Output Modeling Basics & Describing the Regional Economy 2. Predicting the Regional Economy, Applications and Limitations of Input-Output, and How to Access Analyst

36 3A. INPUT-OUTPUT MODELING BASICS

37 Why OMAFRA has Invested in Economic Modelling Ontario s economic development organizations do not have cost effective access to economic modelling tools, which provide better understanding of your economy lead to better informed decision-making with regards to resource allocation support the attraction and retention of highquality jobs communicate the impact of investments in your community 37

38 How can Input-Output Modelling Support Economic Development Describes the characteristics of a regional economy (e.g. economic base) Predicts the total impact of a change in the regional economy 38

39 Economic Base Theory Basic/Export (new $) Non-basic/Local (recycled $) Examples Manufacturing Tourism Some hospitals Regional shopping malls Social Security income Examples Auto repair services Small convenience retail Outpatient medical Personal services like barbers Print and copy shops 39

40 Input-Output Analysis: Basics Description Advantages Looks at the flow of money from all sources in a regional economy to determine how much of an industry is export-oriented, and how its impact multiplies across the economy. Captures interconnectedness of industries, consumers, government, and investment Disadvantages Data is an estimation Model can over- or under-state impacts 40

41 41 Input-Output Modelling: A Simple Explanation

42 What is a multiplier? Multiplier ratio of total impact on regional economy to initial change (e.g., X:1 OR multiplier of 3.75) Multipliers recognize inter-industry linkages Multipliers provide an estimating tool for projecting overall economic impacts Multipliers are different depending upon method used (e.g. LQ vs. I-O) 42

43 Multiplier Effects (Jobs Example) Direct New jobs created from increased input purchases (i.e. supply chain) Indirect New jobs created among suppliers as a result of direct change Induced New jobs resulting from increased wages, spending, and investment 43

44 QUESTIONS

45 3B. DESCRIBING THE LOCAL ECONOMY THROUGH ECONOMIC MODELING 45

46 46 Analyst: Descriptive Report Options

47 Creating a Region in Analyst Select a Region Drive time Radius from address Browse Groups Once geography chosen, click Run 47

48 Regional Jobs, Wages, Sales Report View the jobs, wages and sales estimates for all industries that are the basis for EMSI s input-output model JOBS: annual job averages; both full- and parttime jobs are included and counted equally, WAGES: employee compensation only SALES: industry s total annual sales both to industries and consumers. 48

49 49 Regional Jobs, Wages, Sales

50 Regional Requirements Report Quantify the goods and services that a region requires from each industry, as well as the degree to which those requirements are met within the region DEMAND MET IN-REGION: amount spent on an industry by all business and population in the given region met within the regional economy DEMAND MET BY IMPORTS: amount spent on an industry by all business and population in the given region met outside the regional economy 50

51 51 Regional Requirements

52 Export Table Report View the amount of money generated by each industry from exporting the goods they provide outside of the region EXPORTS: money received in the region through foreign and external domestic sources from both goods and services moving across the regional boundaries. Takes into account wages paid moving across the boundaries; flow of taxes, and; transfer payments related to government services. 52

53 53 Exports Table

54 Industry Supply Chain Report View the regional requirements of an industry, along with whether that supply chain is inside or outside a region IN-REGION PURCHASES: value of selected industry purchases from the respective industry in the value chain that originates within the regional boundary IMPORTED PURCHASES: value of selected industry purchases from the respective industry in the value chain that originates beyond the regional boundary 54

55 55 Industry Supply Chain

56 QUESTIONS

57 4A. PREDICTING CHANGES TO THE REGIONAL ECONOMY, STRENGTHS & LIMITATIONS INPUT-OUTPUT MODELING 57

58 58 Analyst: Predictive Report Options

59 Regional Multipliers Report View the jobs, wages, and sales multipliers for all industries that are derived from EMSI s input-output model Gives indication of where a change in jobs, wages and sales have the greatest potential effect on a regional economy How purchases made by one industry multiply and ripple out and effect industries in a given regional economy Allows user to analyze which industries are worth retaining, recruiting or attracting based on multiplier effects 59

60 Regional Multipliers: Direct DIRECT: The effect of new input purchases by the initially changed industries. 60

61 Regional Multipliers: Indirect INDIRECT: The subsequent ripple effect in further supply chains resulting from the direct change. 61

62 Regional Multipliers: Induced INDUCED: This change is due to the impact of the new earnings created by the initial, direct, and indirect changes. 62

63 Regional Multipliers: Total Total: Includes INITIAL plus direct, indirect and induced multiplier into an aggregated value 63

64 Input-Output Scenario Report Using EMSI s Input-Output tool, measure the ripple effects of economic change in a region by adding or removing jobs, wages and sales Give the ability to shock an economy and measure the impacts 64

65 What Data You Need for Effective Input-Output Scenario Generation Define Your Region Define Industries Impacted Choose the Correct Metric 65

66 Input-Output Scenario: Defining a Region Should be an economic region Beware of Thin Economies Works best in: o o large metro areas rural/small/northern communities 66

67 Input-Output Scenario: Define Industries Impacted Example: Industries involved in a Paper Mill construction: Electricians HVAC Installers Plumbers General Construction Engineers 67

68 Input-Output Scenario: Choose the Correct Metric Jobs Sales Wages 68

69 69 Input-Output Scenario: Lakehead University

70 Input-Output Scenario: Lakehead University Assumptions Construction services procured in-region Workers commute an average of 60 minutes to location Build phase: Engineering (NAICS 5413): $5 million General Contractors (NAICS 2362): $10 million Site Prep (NAICS 2389) : $8.1 million Online phase: Universities (NAICS 6113): 20 jobs created 70

71 General Limitations of Input-Output Works best in functional economic regions Requires detailed knowledge about inputs Data based on estimates, rather than observations 71

72 General Limitations: Understatement of Impacts I-O Models based on fixed point in time New business attracted not reflected 72

73 General Limitations: Overstatement of Impacts 100 new jobs in meat manufacturing = 1,000 new jobs in meat manufacturing = 73

74 Considerations for EMSI Canadian Regional Input-Output Model Use Data derived from national model Data from smaller regions can not be rolledup to (or subtracted from) larger regions Detailed multipliers (direct, indirect, and induced) are provided 74

75 QUESTIONS

76 76 HOW TO ACCESS ANALYST

77 Accessing Analyst for Your Organization Access to Analyst is available to economic development organizations through the Ministry at no charge for a period of one month and begins the first working day of each month If your organization requires access to Analyst after the initial one month period (for an ongoing project) you must send an request to edar@ontario.ca (you will not have to complete a new Terms of Conditions Agreement) 77

78 Steps to Access Analyst 1. Complete and submit the online request form: 2. Upon submitting the request form you will be ed the Terms and Conditions Agreement. The agreement outlines the terms and conditions related to the use of Analyst 3. Read, sign and return the agreement back to the Ministry by to or by fax to (519) no later than five business days prior to the end of the month. Analyst is provided for one month at a time and begins the first working day of each month 78

79 Support for Analyst: Advisors In Northern Ontario, please contact your local Ministry of Northern Development and Mines (MNDM) Officer/Advisor if you have any Analyst questions 79

80 Support for Analyst: Knowledge Base 15 videos available to help organizations use Analyst Bank of definitions and tutorials 80

81 To Access Analyst or for more Information ontario.ca/b9ok

82 QUESTIONS

83 Ministry of Agriculture, Food and Rural Affairs Ministère de l Agriculture, de l Alimentation et des Affaires rurales Myles Buck, Ec.D Economic Development Specialist myles.buck@ontario.ca Rian Omollo Economic Development Specialist rian.omollo@ontario.ca