Glossary of Terms
Community and economic development encompasses a broad array of dialogue. This resource area will be updated as additional terms are identified. Users may suggest and add their own terminology to Grow our Region via Peer Posts.
Abatement – Reduction or decrease in the amount, degree, intensity or worth. A tax abatement is an example of an incentive offer that might be made to an economic development prospect.
Accountability – The ownership of conferred responsibilities, combined with an obligation to report to a higher authority on the discharge of those responsibilities and the results obtained.
Accountability Framework – An accountability framework encompasses a broad range of related components of a transparent and accountable structure which includes performance-based planning, monitoring, performance based reporting, and feedback.
Action plans – ‘Ideas won’t keep, something must be done about them.’ Alfred North Whitehead. Action plans answer questions of: what do we do next? who does it? with what resources? Action minutes after meetings should ensure something happens, and clarify accountability.
Activities – Activities are the actions that are completed to fulfill an obligation outlined in an assigned mandate.
Affordable Housing – Refers to housing that costs no more than 30% of household income. It becomes a factor in economic development when the workforce businesses needs to hire cannot afford to live in the community where they will work.
Agreement in Principle – An document that outlines the basic “deal points” of an agreement before it is formalized into legal documents.
Aggregate demand – A measure of the real purchasing power of the community. Commonly referred to as the total effective demand or total expenditure, it normally comprises private consumption, private and public investment, government expenditure, plus net exports.
Aggregate growth model – Formal economic model describing growth of the economy in one or at most a few sectors and variables. Examples include Harrod-Domar and Solow models.
Angel Investor – An investor that are more individual in their interest, likely to be involved in financial support earlier in the process, and are less likely to impose management controls than a Venture Capital group.
Annexation – The process by which a municipality expands its jurisdiction to include lands previously outside the municipal boundaries.
Asset Based Community Development (ABCD) – ABCD is at the centre of a large and growing movement that considers local assets as the primary building blocks of sustainable community development. Building on the skills of local residents, the power of local associations, and the supportive functions of local institutions, asset-based community development draws upon existing community strengths to build stronger, more sustainable communities for the future.
Barriers to Entry – Refers to the obstacles facing potential newcomers to a market. Typical obstacles include: the high level of skills and/or investment required to enter the market, bureaucratic/regulatory obstacles, cultural/social obstacles,
action taken by established firms to discourage new-entrants etc.
Benchmarks – The standards against which performance will be measured.
Brainstorming – ‘Think sideways!’ Edward de Bono. Brainstorming is defined as ‘a means of getting a large number of ideas from a group of people in a short time’. It is one of the most widely used workshop techniques, and useful when partnerships are trying to shape their agenda and tackle problems creatively. See Brainstorming Techniques under Leadership.
Brand – A name, term, symbol, design or some combination used to identify a product and differentiate it from competitors.
Brownfield – An abandoned or under-utilized site that is contaminated or thought to be. Such sites, depending on their contamination status, sometimes become industrial sites.
Business Climate – The attitudes of government, local citizens, other businesses, and the local workforce toward business. Prospects look for a positive business climate and are typically very sensitive in perceiving less than positive attitudes.
Business Improvement Districts (BIDS) – Legally defined entities formed by property and business owners. Often, an assessment or a tax is levied for capital or operating improvements, as a means of supplementing city funding. The district is created by the public law or ordinance but is administered by an entity responsible to the district’s members or to the local governing body.
Business Recruitment (Attraction) – A fundamental activity of most economic development organizations, it involves attempting to attract businesses from outside the community and encourage them to relocate.
Business Retention and Expansion – A fundamental activity of most economic development organizations, it involves systematic efforts to meet the needs of existing business so effectively that they remain in the community. Most retention efforts are aimed at helping existing businesses: 1) increase sales/ profits, 2) decrease the cost of doing business, and 3) improve the business climate.
Capacity Building – Activities, resources and support that strengthen the skills, abilities and confidence of people and community groups to take effective action, and leading roles, in the development of their communities.
Capital – Wealth in the form of money or property owned by a person or business and human resources of economic value. Capital is the contribution to productive activity made by investment is physical capital (machinery, factories, tools and equipments) and human capital (eg general education, health). Capital is one of the three main factors of production other two are labour and natural resources.
Champions – Projects work because of people. You will need to find people prepared to champion initiatives within potential stakeholders and organizations and in the wider community. Value these allies, and bring them together in social as well as more formal events.
Clustering / Industry Clusters – A group of businesses having geographic proximity that rely on an active set of relationships among themselves for individual efficiency and competitiveness. These relationships generally fall into three categories.
Buyer-Supplier Relationships – Business with linkages of goods, services or raw materials critical to a particular industry.
Competitor and/or Collaborative Relationships – Businesses that produce the same or similar goods and services at a specific level in the value chain.
Shared Resource Relationships – Businesses that rely on the same sources of raw materials, technology, human resources, and information even though they may use these resources to produce goods and services for very different markets.
Community Cohesion – Describes a situation where there is a common vision and a sense of belonging; the diversity of people’s different backgrounds and circumstances is positively valued; people from different backgrounds have similar life opportunities and strong and positive relationships are being developed between people from different backgrounds in the workplace, in schools and within neighbourhoods.
Civil Society Organisations – These consist of a variety of different formal and informal organisations that represent the interests of various members of society. They may include, for example, community-based organisations, producer associations, unions, and NGOs.
Community Development – The act or process of engaging community members pro-actively understand and enhance the economic, social, political, environmental, cultural, physical, and educational aspects of a community through the adoption of vision statements, goals, objectives and implementation plans.
Community Economic Development – This term is used to describe a range of economic activity at a community level. Peter Kenyon describes it as “A sustained and united effort by the whole community to improve their local economy and quality of life by building their capacity to adapt and benefit from global economic changes…..Local people taking responsibility for their economic future”.
Community Empowerment – The state of affairs that exists when members of a community feel empowered to achieve their self-determined goals, with some measure of significant control over the processes, strategies, resources, enterprises and assets to attain these.
Community Engagement – Refers to how stakeholders in communities are engaged in determining their needs and/or ways of addressing these, particularly by those in a position to facilitate this by way of funding and/or other measures of assistance (eg. government agencies).
Community Enterprise – A social enterprise or initiative that is run by and for the benefit of a community.
Community Outreach – An effort to reach out from an organization with an offer of resources and/or services needed or wanted by a community. For example, an institution of higher education reaches out from its campus in a manner of community spirit into its service area. Community outreach may be a systematic attempt to provide resources and/or services, typically within an ally network, beyond conventional limits to places seeking economic development.
Community Profile – An accumulation of comprehensive data on a community important to a prospect during the evaluation of a business relocation or expansion. Examples include: location, geography, labor force, transportation, utilities, taxes, services, regulations, education, housing, recreation, education, health care, cultural opportunities, economic base information, business climate, weather, important contacts, etc.
Comprehensive Plan – An overall plan for a jurisdiction which includes many physical development guidelines such as: land use designations, thoroughfares, parks, trails, and utility systems.
Concept Plan – A technical exhibit showing in plan view the general layout intended for development of a site including the building shape, sidewalks, parking areas, landscape areas, and driveway connections to public streets. See Site Plan for contrast.
Consumer Price Index (CPI) – Initiated during world war one, it is a statistical measure of changes in prices of goods and services bought by urban wage earners. Also known as the cost of living index.
Consumption – the process of using inputs.
Corporate Social Responsibility (CSR) – This concept is based on the belief that private sector organisations have an obligation to consider the interests of customers, employees, shareholders, communities, and other ecological considerations in all aspects of their operations. This obligation is seen to extend beyond their statutory obligation to comply with legislation and generally manifests itself in a wide range of activities which are not those normally associated with generating profits for the enterprise.
Contingency Costs – Typically a cost estimate for a project will include a “contingency” amount which is generally reflected as a percentage of the construction costs. The purpose is to have funding set aside for unforeseen costs that arise during the construction of a project.
Cost Benefit Analysis (CBA) – A technique that assesses projects through a comparison between their costs and benefits, including social costs and benefits for a community, region or country. Depending on the project objectives and it’s the expected outputs, three types of CBA are generally recognised: financial; economic; and social. Generally cost-benefit analyses are comparative, i.e. they are used to compare alternative proposals. Cost-benefit analysis compares the costs and benefits of the situation with and without the project; the costs and benefits are considered over the life of the project.
Cost of Living – The overall cost to reside in an area. Often indexed against the national average (=100). Includes housing, taxes, utilities, transportation, food, goods and services and miscellaneous.
Critical Path Method (CPM) – A project management tool used to graphically identify the integral relationships and sequencing of events required to implement a project under desired time frames. Also see PERT Chart and Gantt Chart.
Development Costs – Major categories of cost to develop property are represented by the following.
Site Acquisition Costs – The actual cost of the land plus appraisals, legal and closing fees, surveys, title insurance, environmental assessments and broker’s commissions.
Planning and Design Costs – The fees of landscape architects, engineers, attorneys, environmental specialists, traffic engineers and any other costs necessary to obtain approved plans and permits for construction.
Soft Costs – Project administration, marketing, insurance, selling and leasing commissions, legal and accounting fees, property management, annual permit fees, etc.
Financing Costs – Costs of establishing financing, interest costs, etc.</p.
Direct investment – Foreign capital inflow in the form of investment by foreign-based companies into domestic based companies. Portfolio investment is foreign capital inflow by foreign investors into shares and financial securities. It is the ownership and management of production and/or marketing facilities in a foreign country.
Economic Appraisal / Analysis – Economic analysis is an essential tool in project and program appraisal. It involves the techniques of cost-benefit analysis which compares the total costs of the project/programme to the total stream of benefits flowing to society. It assesses whether the returns are sufficient to justify investing funds. It may also include financial appraisal which assesses the financial viability of the project/programme from the perspective of specific participants (e.g. whether the returns for individuals and businesses are sufficient incentive for their participation).
Economic Assessment – A component of the strategic planning process, an economic assessment includes both external and internal assessments.
External Assessment – (a.k.a. situational analysis or environmental scan) An assessment of economic trends and expectations outside of the local economy at regional, national, international, and global perspectives. Another input might include observations made by credible “futurists” particularly regarding socioeconomic trends.
Internal Assessment – An assessment of the strengths and weaknesses of a community and their ability to adequately anticipate opportunities and impacts identified via the external assessment. Also see SWOT Analysis.
Economic Base – The foundation of a community’s economy. It is composed primarily of basic industries (those that make products locally and export them bringing money into the community from the outside) and service industries that simply circulate money within a community.
Economic Base Analysis – An analysis comparing the basic and non-basic aspects of a jurisdiction’s economy.
Economic Development – The adopted IEDC definition was “the process of creating wealth through the mobilization of human, financial, capital, physical, and natural resources to generate marketable goods and services.”
Other definitions include:
The purposeful intervention into an economy to improve economic well-being.
The process that influences growth and restructuring of an economy to enhance the economic well being of a community.
The creation of jobs and wealth, and the improvement of quality of life.
Economic Gardening – A focus on growing local businesses by providing an enriched environment for entrepreneurs.
Economic Infrastructure – The underlying amount of physical and financial capital embodied in roads, railways, waterways, airways, and other forms of transportation and communication plus water supplies, financial institutions, electricity, and public services such as health and education. The level of infrastructural development in a country is a crucial factor determining the pace and diversity of economic development.
Economic Policy – A statement of objectives and the methods of achieving these objectives (policy instruments) by government, political party, business concern, etc. Some examples of government economic objectives are maintaining full employment, achieving a high rate of economic growth, reducing income inequalities and regional development inequalities, and maintaining price stability. Policy instruments include fiscal policy, monetary and financial policy, and legislative controls (e.g., price and wage control, rent control).
Economectric Modeling – A qualitative analysis method used to predict the effect of economic events or activities. For example, econometrics modeling can be used to determine the overall impact of recruiting a new business to the community or the effect of losing a business.
Economy – The ebb and flow of goods and services into, out of, and within a particular jurisdiction.
Basic Economy – Economic activity within a community with a predominant market that lies outside the local economy.
Non-Basic Economy – Elements of the economy whose predominant economic impacts are within the designated jurisdiction.
Economy of scale – An occurrence in which costs are reduced as amounts of increase. For example, in manufacturing the cost per part produced is less as the number of parts increases. In a service business, the larger the order of a given supply, the less each individual item in the order will cost. These are only two ways that the concept of economy of scale applies. There are many others.
Economic Sustainability – It is usually associated with the ability to maintain a given level of income and expenditure over time. It can be defined in relation to expenditure by individuals, households, projects, programmes, government departments, countries etc. Maintaining a given level of expenditure, necessarily requires that the income/revenue which supports that expenditure should also be sustainable over time. In the context of the livelihoods of the poor, economic sustainability is achieved if a minimum level of economic welfare can be achieved and sustained. Economic sustainability is one of a number of dimensions of sustainability that also include environmental sustainability, institutional sustainability and social sustainability.
Environmental Sustainability – Achieved when the productivity of life-supporting natural resources is conserved or enhanced for use by future generations. By productivity we mean its ability to produce a wide range of environmental services, such as the supply of food and water, flood protection, waste management etc. Environmental sustainability is one of a number of dimensions of sustainability that also include, institutional sustainability, economic sustainability and social sustainability.
Electric Power Terms – Following are basic electric power terms:
Demand – The greatest amount of power required at any single point in time, stated in peak KW demand.
Dual Feed – Electric power service from separate circuits within one substation or from separate substations and/or utility service providers. (aka redundant service)
KW / Kilowatt – Maximum demand from an electric company expressed in kilowatts. A KW is equal to 1,000 watts. Electric utilities often levy a demand charge. This will be based on a company’s KW demand.
KWH / Kilowatts Per Hour – A measure of consumption usually expressed on a monthly basis. kWh is a unit of energy or work equal to that done by one kilowatt acting for one hour. Utilities often bill customers a use charge based on kWh (in addition tothe demand charge).
Reliability Measures – Stability of electric power service measured by outages plus dips/surges/spikes in power supplied. System-wide reliability indices are often provided by electric power utilities.
Eminent Domain – The power granted to a public entity to ”take” property for a greater public purpose. Typically the public entity is required to pay “fair market value” for the property acquired.
Exit Strategy – In terms of a site or building purchaser, an exit strategy is an evaluation of the potential for selling or leasing the asset should this be required or desired in the future.
Exports – The value of all goods and nonfactor services sold to the rest of the world; they include merchandise, freight, insurance, travel, and other nonfactor services. The value of factor services (such as investment receipts and workers’ remittances from abroad) is excluded from this measure.
Export incentives – Public subsidies, tax rebates, and other kinds of financial and nonfinancial measures designed to promote a greater level of economic activity in export industries.
Externalities – A cost or benefit not accounted for in the price of goods or services. Often “externality” refers to the cost of pollution and other environmental impacts.
Factor Service – The input that a factor provides to the productive process, such as man-hours of labor, acre-months of land, etc.
Fair Market Value – The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable, and assuming the prices is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
Buyer and seller are typically motivated;
Both parties are well informed or well advised and each acting in what they consider their own best interest;
A reasonable time is allowed for exposure in the open market;
Payment is made in terms of cash or in terms of financial arrangements comparable thereto; and
The price represents the normal consideration for the property sold unaffected byspecial or creative financing or sales concessions granted by anyone associated with the sale.
Financial Analysis – The critical analysis of financial information on a company to evaluate its economic health. Also see Financial Ratios and Financial Statements. Steps include:
Obtain copies of financial statements from the company, preferably over the past 3-5 years.
Evaluate the quality of the statements provided, preferably being audited statements by a reputable accounting firm.
Examine and analyze at least the two primary statements, the balance sheet and the income statement.
Calculate and review all basic financial ratios.
Financing Methods – Examples include:
Traditional Financing Methods – Generally the use of long or short term loans from full service banks.
Non-Traditional Financing Methods – The use of Small Business Association loans, low interest loans, government subsidies, grants, and venture capital.
RLF / Revolving Loan Funds – Loans in which seed money is established, then loans are made out of and paid back into the same fund usually for a specified purpose.
TIF / Tax Increment Financing – The incremental difference in tax revenue generated between two points in time, typically a base reference and a targeted or subject point in time. This is used to measure the increased tax benefit of development on a particular parcel of land over a particular period of time. A form of financing improvements within a designated zone backed by the tax increment generated by the development. The tax increment is the difference between the ad valorum tax generated prior to development and after development.
Lease Purchase – A financial arrangement where the user pays a lease amount to the owner, some portion of which is dedicated towards an actual purchase of the asset at the end of the lease agreement.
Micro-Loans – Project specific investment such as loans or grants directly to a business.
Financial Ratios – Many financial ratios exist to evaluate the merits of a particular financial investment or the financial standing of a company. Financial ratio calculations serve at least three important purposes:
1. As a double check to ensure review of important items in the financial statements.
2. For comparison against similar company or industry standards.
3. As an indication of satisfactory or unsatisfactory financial condition.
Examples include:
Liquidity Ratios – Provides analytical information pertaining to the convertibility of the company assets into cash.
Current Ratio – The current assets divided by the current liabilities. A measure of financial strength, it indicates the relationship of current debt and the ability of the firm to meet it. A good standing ratio is approximately 2:1.
Quick Ratio / Acid Test Ratio / Liquidity Ratio – The quick assets (cash and accounts receivable) divided by the current liabilities. It is a good indicator of liquidity because it does not include inventories as a ”quick” asset. A minimum quick ratio of 1:1 is recommended.
Receivables Turnover – The annual net sales divided by average receivables. A ratio of four indicates that accounts receivable were paid or turned over four times during the year.
Inventory Turnover – Cost of goods sold divided by average inventory.
Day’s Receivable – Accounts receivable divided by (net sales times 360).
Day’s Payable – Accounts payable divided by (purchases times 360).
Solvency Ratios – Shows whether a company can pay all of it’s debts as they become due.
Debt to Net Worth Ratio / Debt to Equity Ratio – The total liabilities divided by net worth (assets minus liabilities). The most important test for solvency, it is used to measure the extent to which company’s operations are financed by borrowed funds, a measure of riskiness. Generally a satisfactory ratio is 2:3.
Profitability Ratios – Shows whether or not the amount of income is adequate.
Return on Sales – The net profit after taxes divided by net sales. It indicates the number of cents of profit the company made for each dollar of sales.
Return on Total Assets – Earnings before interest and taxes divided by average total assets.
Return on Investment / ROI / Net Profit to Net Worth Ratio – The net profit after taxes divided by the net worth. Represents the profit generated by the owners investment in the company showing cents of profit per dollar of investment.
Financial Statements / Summaries – Reports or summaries that are common to financial analysis professionals. Examples include:
Annual Report – A report generated once a year by a company that serves many purposes, primarily for the purposes of informing stockholders and analysts of the activities of the company over the past year, its current financial position, and intentions for the future.
Audited Statements – Statements which have been reviewed by an independent accounting firm and certified to meet industry requirements, with exceptions noted.
Balance Sheet – A summary showing what the company owns and what they owe at a particular point in time. A reflection of how strong their finances are.Cash Flow Statement – Describes the ebb and flow of cash over 3-5 years to include:
How much cash will be needed.
When it will be needed.
Whether or not the business should look for equity, debt, operating profits, or sale of fixed assets.
Where the cash will come from.
Pro-forma Budget – A document showing projected revenues and expenses over 1-5 years in order to evaluate the potential success of a business.
Income Statement – A moving picture of the income and expenses during the accounting period. Also called “Profit and Loss Statement” or “Statement of Earnings”.
Foreign direct investment (FDI) – Overseas investments by private corporations.
Gantt Chart – A horizontal bar chart developed as a production control tool in 1917 by Henry L. Gantt, an American engineer and social scientist. Frequently used in project management, a Gantt chart provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project.
,strong>Geographic information system (GIS) – A technology that integrate social, geographic, economic, and demographic information and presents it in a useful form. For example, a GIS system can produce a map that contains much more than just the typical geographic information. It might also contain demographic, social and economic information relating to the area in question. Those EDOs that use GIS have a great advantage in being able to give prospects so much relevant information in such a concise format.
Globalisation or Globalization – The process whereby trade is now being conducted on ever widening geographical boundaries. Countries now trade across continents and companies also trade all over the world.
Goal – Derived from the mission or vision statement, a goal is a specific statement of what an entity would like to be or what they would like to achieve. Goals should be clear and concise and are reached through the accomplishment of specific objectives. Goals are aspirations, objectives are targets. A single goal can give rise to several objectives.
Governance – This is the issue of ‘who is in charge — ultimately’. In an organisation, community or company it is clearly the management committee, Council or Board.
Greenfield Site – A site that currently is undeveloped and has no environmentally sensitive impacts due to current or historic use of the land. See Brownfield Site for contrast.
Gross domestic product (GDP) – The total of goods and services produced by a nation over a given period, usually 1 year. Gross Domestic Product measures the total output from all the resources located in a country, wherever the owners of the resources live.
Gross national product (GNP) – The value of all final goods and services produced within a nation in a given year, plus income earned by its citizens abroad, minus income earned by foreigners from domestic production. In certain countries net remittances from citizens working abroad may be important to national well being. GNP equals GDP plus net property income from abroad.
Highest and Best Use – The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.
Human Capital – Represents the skills, knowledge, capacity to work, and good health that together enable people to contribute to a project or community.
Impact – An intended or unintended consequence of policies, programs, services or products,which is either positive or negative.
Impact Analyses – Various models exist to analyze positive and negative impacts created by development projects. These include:
Computer Modeling – There are many analysis models varying in complexity from locally developed spreadsheets to comprehensive multi-faceted, several level “trickledown” models.
Cost-Benefit Analysis – An analysis of the cost of a project to a jurisdiction (fire, police, infrastructure, schools, etc.) with the benefits (tax revenue, jobs, community support, etc.).
Direct Analysis – A financial analysis that is limited to the direct revenues and costs of a project within a community, i.e. no multipliers, second generation, or “trickle-down” impacts are included.
Economic Impact Analysis – The projection of the total impact associated with growth to local jurisdiction(s) in which the growth is taking place.
EIS / Environmental Impact Statement – An analysis of the impacts of a project on the physical, chemical and biological components of the environment.
Import Substitution – A new locally made manufacturing line that replaces products being imported into the community.
Incentives – Any number of inducements that an agency/community/region might offer to a prospect to entice them to remain, expand, or locate within a preferred area. Examples in three major categories include:
Corporate Expenses – Several categories of expenses can be grouped and defined as follows:
Land Related – Free land, free rent, land write-downs, land leases, public infrastructure.
Financial – Tax increment financing, special assessment districts, IRB’s, cash grants, loan guarantees, subordinate financing, deferred payment mortgages, interest rate buy-down.
Operational – Equipment leasing, utility cost reduction and tax abatements.
Construction – Permit acceleration, fee reductions, non-strike agreements, contractor selection assistance, free office space during construction, dedicated inspection staffing.
Workforce Development Incentives – Pre-employment screening, on-the-job training programs, customized training programs, job training funds, and technology transfer programs. Also see Workforce Development.
Relocation Assistance Incentives – Community presentation visits at company location, spousal employment programs, temporary executive housing, transportation, children acclimation, childcare, discounts on home furnishings, moving cost.
Incentives Policy – A policy outlining the jurisdiction’s position regarding various incentives that might be utilized to attract or retain a business. Elements of a policy might include:
Applicability to all types of businesses.
Processes for quantifying costs and benefits to the community.
Pre-set guidelines for investment and required return.
Draws on benchmark research of business requirements and cost profiles.
Reflects a true understanding of competitive advantages and disadvantages.
Contains procedures for quick responses.
Exists before the prospect calls.
Allows the community to walk away from bad deals.
Contains safeguards to protect the community’s investment.
Incubator – A type of development, typically a single building, that houses many small businesses in flexible space at below-market rates who share common operation spaces such as meeting rooms, copying facilities, and receptionist duties. Often the purpose of these facilities is to help grow businesses in a community. (a.k.a. Enterprise Center, Business & Technology Center, Innovation Center).
Indicator – An indicator is a particular value or characteristic used to measure activities, outputs or outcomes. It is important that indicators are comparable. Comparable indicators are a specific set of common quantitative or qualitative data for the aspect of performance under consideration.
Industrial / Office Park – The assembly of land, under one continuing control, to provide facilities for business and industry consistent with a master plan and restrictions resulting in the creation of a physical environment achieving the following objectives. (aka Business Park)
Consistency within community goals
Efficient business and industrial operations
Human scale and values
Compatibility with natural environments
Achieving and sustaining highest land values.
In-Fill Development – The development of parcels of land that were not acquired or included in land compilation for earlier more comprehensive developments in the area. Typically the acreages are smaller and may need more flexibility in design standards due to the size of the parcel.
Influence / Indirect Power – The ability to sway people who are a part of the formal or informal power structure.
Infrastructure – Facilities and services needed to sustain industry, residential, commercial, retail, and all other land use activities. This can be divided into two categories of infrastructure:
Traditional Infrastructure – Includes such public works items as water supply systems,sanitary sewer collection systems, streets and roads, bridges, dams, railroads, drainage and flood control and other utilities.
Broader View Infrastructure – A broader view of infrastructure also includes such items as telecommunications technology, libraries, research institutes, colleges and universities, technical and vocational institutions, housing availability quality andcost, physical and mental health facilities, fire stations and parks.
Industry Cluster – Concentrations in one geographical region of similar, and often complementary businesses. For example, a region might have an industry cluster composed by technology companies and suppliers. Often local EDOs will base their recruiting strategies on targeting a given industry cluster.
Inflation – A period of above-normal price increases as reflected, for eample, in the consumer and wholesale price indexes.More generally, the phenomenon of rising prices.
Inputs – These are the resources used to carry out actions.
Input – Output Model / “I-O” Model – An analysis of the interaction of money as it flows between various industries. It identifies the resources utilized by an industry as a proportion of its output. Used to determine the impacts of particular types of developments on various aspects of an economy. It estimates the trickle-down impacts of changes in the local economy.
Iterative Process – A process involving the continual refinement of goals and objectives as new knowledge and questions generated by investigation and analysis feed back into the investigative cycle.
Intermodal Facility – A transportation linkage that typically provides an interface for different types of transport, i.e., rail, air service, and trucking.
Land Use Plan – A plan typically adopted by a city that shows the anticipated and desired longterm land use development patterns for all land in the jurisdiction. Typical land use categories include:
Industrial – Generally includes light and heavy industrial, distribution, warehousing, and manufacturing districts. Often subdivided into light industrial (I-1) and heavy industrial (I-2) districts.
Office – Generally includes all office districts, but can be further categorized as local and corporate office.
Residential – Generally low, medium, and high, density residential and can be further subdivided into single family and multi-family residential.
Retail – Generally includes various levels of retail development but can be further categorized as regional, community, and neighborhood retail.
Leakage – Leakage from the local economy occurs when local residents purchase goods and services outside the local economy.
Location Quotient – A basic analytical tool, measured on a simple numerical scale to yield a coefficient of how well represented a particular industry is within a local economy. A LQ of less than one indicates that a particular study region has less than its share of a particular industry, while a region study with an LQ greater than one indicates it has more than its share of an industry. It is determined by calculating the percentage of employment in an industry the jurisdiction to total employment in the jurisdiction as a ratio to the percentage of total employment in that industry nationally to total employment nationally.
* Formula = Local Industry Employment / Total Local Employment
National Industry Employment / Total National Employment
Macro-Economic Analysis – Provides insights into the impact of current macro policy on the livelihoods of different groups and the possible effects of proposed policy changes.
Measures – Provide specific information used when indicators are combined to assess the extent of accomplishment of results (activities/outputs/outcomes). Various types of measures are listed below:
Effectiveness Measures – The different ratios which tell if a planned result was accomplished. Example: cost per client.
Input Measures – Used to quantify the amount of resources used to complete the activity and produce the outputs. Example: human resources utilized to complete an activity or produce the outputs.
Outcome Measures – Used to provide qualitative and quantitative information indicating the degree to which an entity can be credited for the achievement of its planned objectives. There can be measures of well-being or process outcomes. Example of well-being: reduction in the number of citizens dependent upon income support compared with the total population. Example of process: number of cases settled compared with the number heard.
Output Measures – Used to tell the amount produced as a result of the inputs used in a program or service. Example: number of applications processed compared with the inputs.
Measures – There are three types of process measures designed to monitor the organization’s activities: efficiency measures, activity based and unit cost measures:
Activity-Based Measures – Used to quantify how busy an organization is and enable the organization to determine the use for a specific program or service. Example: phone calls handled per employee.
Efficiency Measures – Ratios of outputs to inputs. They tell how well the organization used its resources to produce the programs and services. Example: number of individuals ticketed per police officer.
Unit Costs – The ratios of outputs to input expenditures. Example: number of cases handled compared with fiscal investment.
Media Terminology
Microeconomic Analysis – Microeconomic analysis attempts to explain the behavior of individuals and organizations in a given economy.
Mission Statement – Is an outcome oriented statement which systematically diagrams the vision by answering the questions who, what and why. It is essential that it is realistic and achievable in 6 to 8 years (approximately 2 cycles of planning), tell the ultimate result of your work, answers who will do what and why they are striving to achieve this end, and is memorable.
Mobility Indicators – A measure of industry attractiveness that identifies the likelihood for growth,relocation or expansion. Factors typically include:
Historical and projected industry growth rate.
Number of establishments.
Capacity utilization rate.
Change in capacity utilization rate.
Moratorium – A temporary cessation of all activities, typically adopted by a community by ordinance, to allow time to address a particular issue. E.g. a six-month residential building permit moratorium to study sewer capacity would not allow the issuance of a residential building permit for a six-month period.
Multinational Corporation (MNC) – An international or transnational corporation with headquarters in one country but branch offices in a wide range of both developed and developing countries. Examples include General Motors, Coca-Cola, Firestone, Philips, Volkswagen, British Petroleum, Exxon, and ITT. Firms become multinational corporations when they perceive advantages to establishing production and other activities in foreign locations. Firms globalize their activities both to supply their home-country market more cheaply and to serve foreign markets more directly. Keeping foreign activities within the corporate structure lets firms avoid the costs inherent in arm’s-length dealings with separate entities while utilizing their own firm-specific knowledge such as advanced production techniques.
Multiplier – A number used to determine the impact of an event/project/industry on the economy. The ratio of total change in output or employment to the initial change (or direct change). For example, if an industry were to create 100 new jobs it would require materials and services from its supplying industries. If this increase in demand created 30 new jobs in the supplying industries, the employment multiplier would be 1.3 [i.e., 100 (direct) + 30 (spinoff)].
NAICS – The North American Industry Classification System (NAICS) is a classification system for organizing economic data. This system replaces separate standard classification systems used by Canada, the United States, and Mexico. It provides a common standard framework for the collection of economic and financial data for all three nations.
Objective – An objective is a measurable statement or incremental milestone which specifies a change or benefit that the entity hopes to achieve as it strives to achieve a specific goal. Success in meeting the objectives can be readily evaluated using qualitative and quantitative measures.
Outcome – An outcome is a change as a consequence of specific policies, programs and initiatives undertaken by entities. There are generally three types of outcomes: immediate, intermediate and long term. An immediate outcome could be a change in attitudes. An intermediate outcome could be a change in behavior. The long term would be a lower or higher incidence of a specific result (e.g. lower- disease, drop out rate, unemployment, accidents) (e.g. higher- year-around employment, literacy, retention of qualified workers, students completing career paths).
Outputs – The measurable results of projects or programmes — homes built, people who have completed training — and are dear to funders who want to know what they are getting for their money.
Participation Rate – Labour force expressed as a percentage of the population aged 15 years and over.
Performance – Refers to actual results measured against defined standards.
Performance Framework – This type of framework is used to define the steps of the process to be completed as a component of the planning process.
Performance Measurement – A quantitative and qualitative process to assess if the entity has completed its intended activities or achieved its desired outputs or outcomes in the most cost effective and timely manner possible.
Performance Report – A summary of the organizations activities, outputs or outcomes which provides a clear linkage between its plan and the results actually obtained using the specified performance measures.
Personal Disposable Income – Personal income that is actually available for consumption or saving. This is total or gross income minus income tax and social security contributions such as employment insurance and Canada Pension deductions.
Personal Income – Income received by residents or households in an area. This includes monies earned such as wages and salaries as well as transfer income such as employment insurance benefits and pension income.
PERT Chart – This project management tool used to schedule, organize, and coordinate tasks within a project. PERT stands for Program Evaluation Review Technique, a methodology developed by the U.S. Navy in the 1950s. A similar methodology, the Critical Path Method (CPM) was developed for project management in the private sector at about the same time. A PERT chart presents a graphic illustration of a project as a network diagram consisting of numbered nodes (either circles or rectangles) representing events, or milestones in the project linked by labelled vectors (directional lines) representing tasks in the project.
Physical Capital – This comprises the basic infrastructure and physical goods that support communities and economies. Infrastructure consists of changes to the physical environment that help people to meet their basic needs and to be more productive.
Key components of infrastructure include affordable transport systems, water supply and sanitation (of adequate quantity and quality), energy (that is both clean and affordable), good communications and access to information. Shelter (of adequate quality and durability) is considered by some to be infrastructure, while others would consider it to be a private physical asset and somewhat different from infrastructure.
Other components of physical capital include productive capital that enhances income (e.g. sewing machines, agricultural equipment), household goods and utensils and personal consumption items such as radios and refrigerators.
Policy – A policy enables or restricts actions as a means of specifying outputs, outcomes or parameters. It provides specific information about the ends the entity desires to achieve, direction for the CEO and staff, and governance/operational level processes.Process A process is a set of activities which are aimed at planned outputs.
Production Activity – A production activity is the process which transform inputs (resources) into outputs (usually services in the case of the public sector).
Program – A program is a set of projects, services or events intended to meet a public need.
Proxy Measures – Used when direct measurement of a specific outcome is not possible. They are a surrogate or substitute data used when costs, complexity or timeliness prevent a result from being measured directly. Example: obesity rates are not available for a certain geographical area of the province therefore body mass index is used.
Quality of Life – A generically used term representing variables that make a community enjoyable to live in including: education, housing, crime rates, weather, recreation, culture, health,religion, public safety, and community appearance, etc.
Regional Income Multiplier – The average number of times each dollar of inflow changes hands within the economy before it “leaks” from the local respending process in the form of savings, imports or taxes.
Shift-Share Analysis – An analysis of the causes of change for a particular industry within the studied region. It analyzes the reasons for competitive advantages or disadvantages to a region.
SIC Code / Standard Industrial Classification Code – A numerical coding system used to identify and classify all industries. A unified effort is being made to change to the NAICS classification system. Also see NAICS.
Site Plan – A detailed technical drawing showing in plan view the exact layout through dimensional control, the intended development of a site including the final building shape, sidewalks, parking areas, landscape areas, and driveway connections to public streets. See Concept Plan for contrast.
Site Selection Process – Although the site selection process varies considerably depending on the scale of the project and type of industry, a typical process for a manufacturing facility would include:
Defining the facility.
Analyze the market to be served.
Decide to do a site search.
Perform a freight cost analysis.
Define the site search area.
Do initial screening using “knockout” factors.
Second round screening of detailed information.
Site visits.
Ranking of alternatives.
Due diligence analysis of engineering, legal, and other technical factors.
Formal decision.
Start-up of new location or facility.
Site Selection Types – Generally there are three main types of site selection required by anorganization.
Expansion – This could mean either on-site or at a new location.
Relocation – The disposal of an existing location and re-establishment of the business atanother location.
Start-Up – A determination of where the business should be established. This might also include the establishment of formal presence by moving from a home-basedbusiness to a business district in the community.
Smart Growth – A development philosophy that includes many of the following aspects:
Planning compact, pedestrian-friendly development-mixed use, where people havetransportation choices.
Creative range of housing opportunities and choices.
Fostering distinctive, attractive places with a strong sense of place.
Preserving open space, farmland and critical environmental areas.
Strengthen and direct development towards existing communities.
Directing new highway transportation dollars to existing communities to improve safety for walkers, bikers and drivers, and to promote public transportation.
Social Audit – An independent review of the social and economic well-being of communities. It is a means of ensuring that government’s programs and policies are meeting people’s needs.
Social Capital – Defined as “features of social life -networks, norms and trust – that enable people to act together more effectively to pursue shared objectives.”
Social Economy – Made up of those organisations from the voluntary and community sector that generate income through trading. Social economy organisations are independent of the state, have primarily social objectives and their surpluses are reinvested for that purpose.
Social Enterprise – Businesses that trade for a social purpose. There are numerous definitions of social enterprise throughout the world and it is a much contested term. Social enterprises usually have the following characteristics:
explicit social aims
commercial orientation
social ownership
social accountability
socially entrepreneurial drive
use of profits for community benefit.
Social Finance – Includes finance and investment from non-traditional sources, with terms that are customised to meet the needs of community organisations.
Strategic Issue – The most significant internal and/or external change which the organization must manage to realize its vision and the capacity of the organization to effectively manage the impacts of those changes.
Strategic Planning Process – The process by which an organization or community envisions its future and develops the necessary procedures and operations to achieve that future. It can provide the means for facilitating the resolution of local economic problems within a consensus-building framework. A strategic plan should present a clear vision for the future activity of an organization, a set of goals to attain that vision, a set of strategies to achieve each goal, and a system for evaluating the results. Phases of the strategic planning process in sequential order include.
Strategy – A strategy is a systematic plan of action that an organization intends to take in order to achieve its objectives. Strategies are dynamic and may need to be modified based on new knowledge or changing circumstances.
SWOT Analysis – The analysis of Strengths, Weaknesses, Opportunities and Threats for an organization or community.
Team Building – The process of helping a group develop shared aims and objectives, values and a plan to put them into action. People working together are better able to get to know each other than, for example, members of a management committee meeting every month or two — so team-building workshops can be particularly important for partnerships. I suggest, if possible, bringing in a trainer who specialises in team building to plan a programme. If not, an ‘away day’ with a facilitator to work on simple techniques like Brainstorming and SWOT can achieve a lot.
Technology Transfer – The process of transferring a new technology from the lab to the marketplace by establishing links between the technological research outputs of universities and federal laboratories with applications of manufacturers.
Telecommuting – Employees working at home who send in their work electronically.
Terms of Reference – Any committee, group or team needs clear terms of reference covering:
The purpose and membership of the group.
Who services it. How often it meets — and for how long
The topics or issues the group covers.
The powers of the group to make decisions.
What funding it has, if any
The outcomes expected.
To whom it reports.
Timeline – ‘It takes time to save time.’ Joe Taylor. Everything takes longer than you think — even when you know it does. Drawing a timeline is a simple technique to set priorities among activities and events that must be completed in creating a partnership or carrying out programme.
Transaction Costs – The costs associated with making, monitoring and enforcing agreements/transactions/contracts etc. The agreements may be formal or informal and transaction costs may be incurred before and after an agreement is made. A large proportion of the costs are associated with acquiring information about the nature of an agreement (e.g. the quality of goods or services being transacted) and the reliability of other parties to the agreement. Transaction costs are incurred gaining information or commitments in order to reduce risks of loss in a transaction.
Trends – Involve changes that take place over a longer period of time than is the case with changes brought about by shocks or seasonality. Examples of trends include the following:
Population trends (e.g. increasing population pressure);
Resource trends (e.g. soil erosion, deforestation);
Economic trends (e.g. declining commodity prices, development of new markets);
Trends in governance/politics (e.g. increasing accountability); and
Technological trends (e.g. the development of more efficient production techniques.
Values – The fundamental principles, which can be described as actions that guide behaviour and decision making.
Venn Diagrams – Circular (often overlapping) areas used to represent relationships in a diagram. They are a useful means of showing the links between different types of groups, in a clear, graphic format. They can also be used to summarise the roles that different groups play and what people’s expectations are about how these groups will function.
Venture Capital – A financial means by which new (generally higher risk) businesses get started and existing businesses expand, retool and stay competitive. Investors usually require a role in the management of the firm and a substantial portion of the future profits. Also see Angel Investor.
Virtual Teams – Once people are online it is possible to form virtual teams — that is, groups who work together through the use of email and other Internet tools as well as phone and face to face.
Vision – A short statement describing the ideal state an organization is striving to achieve for its clients or the ideal state that an organization sees for society. It answers the question, “Whatis the outcome for the citizens of the province if the entity achieves its mandate?
Watershed – A watershed is an area of land whose boundaries are defined by the way water drains from it. All water within the boundaries of an individual watershed flows to the same point. Small watersheds can therefore exist inside larger watersheds. Because of the physical inter-linkages within a watershed, watersheds are useful units for managing soil and water resources.
Workforce Development – Efforts to support and enhance the skills, capabilities, and availability of qualified labor in a community. This might include such programs as pre-employment screening, customized training programs, job training funds, and on-the-job training.