Five Tips To Aid In Benchmark Analysis For Economic Development

Five Tips To Aid In Benchmark Analysis For Economic Development

January 9th, 2019

by Ian Smith

As we saw over the past months especially with Amazon seeking a second location for its headquarters, bringing foreign direct investment dollars to a city is a daunting task.   Competing with other jurisdictions is a process that should not be taken for granted nor should be a reason to not obtain established objectives.

Similar to private sector entities. economic development agencies should take advantage of competitive analysis tools to obtain insights to make key decisions.  A strategic analysis tool that must be in an agency’s toolbox is a benchmarking exercise.

Here are five aspects about benchmarking that must be kept in mind before beginning the initiative.

1 –  Be clear on what you are attempting to measure

To avoid any confusion which may arise in the benchmarking exercise, it is wise to state clearly what your agency is attempting to measure.     Not only will it assist any in-house analysts in conducting the assessment but decision-makers will appreciate the clarity of the analysis when formulating strategies.   In addition, any research that has to be done will take less time if there are unambiguous questions surrounding the analysis mandate.

2  -   Use current data to perform your benchmarking analysis

One of the vital elements for a successful benchmarking analysis exercise is current data.     Utilizing data that is out of date will lead to inaccurate analysis.  To avoid this from happening, be sure to collect information that was published in the same year.  For example, if your agency wishes to benchmark your region or city with other regions or cities vying for the Amazon headquarters, you may want to download and save the offers that still remain online.

3 -   Conduct the exercise on a regular basis

Benchmarking analysis is an exercise that should be conducted on a regular basis in order to benefit the agency.  Performing the analysis is twofold.  Primarily, conducting the analysis annually allows the agency to evaluate how the region or city progressed over a 12-month period.   Conversely, the analysis will provide a year-by-year competitive overview of what other regions or cities are doing from an economic development perspective. 

4 -  Act upon the findings

The purpose of conducting the benchmarking analysis is to create actionable intelligence for economic development initiatives.  The last thing that an agency wants to do is to have intelligence and not improve their strategic position amongst competing cities.   Acting upon the findings may lead to adjusting marketing plans, re-allocating financial resources to other activities and or modify the agency’s objectives.

5 – Be objective

It is vital that the exercise be free from bias.   Be sure that the individual(s) is objective and understands the importance of being fair.   Providing inaccurate insights will only lead to misleading analysis and in the end, wrong decision making on the part of decision  makers.

Competition when it comes to bringing economic development initiative to a region or city is a reality that should be faced in a strategic manner.  Economic development agencies that choose to go head to head with other agencies for foreign direct investment opportunities should be prepared to take advantage of all analysis tools at its disposal to gain an edge to be successful.  Benchmarking analysis is a tool that allows agencies to measure how they are performing versus other agencies and elements of success that should be examined on a frequent basis.

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