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An Initial Approach to Economic Development Impact Assessment

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Title: An Initial Approach to Economic Development Impact Assessment


1
SOUTH AFRICAN CITIES NETWORK THINK-TANK ON CITY
ECONOMIC DEVELOPMENT STRATEGIES
  • An Initial Approach to Economic Development
    Impact Assessment
  • City of Cape Town
  • Economic Development Tourism
  • Thursday, 21 November 2002
  • Carol Wright

2
  • OVERVIEW OF PRESENTATION
  • 1. Introduction
  • 2. What is impact assessment?
  • 3. Why do we need to measure impact?
  • 4. What do we need to measure evaluate?
  • 5. Type of tools we need
  • 6. Range of Economic Development Tourism impact
    assessments undertaken
  • 7. Financial Economic Impact of a Joint
    Marketing Strategy
  • 8. Job opportunities framework methodology
    01/02 - initial approach
  • 9. Overview

3
  • 1. INTRODUCTION - CONTEXT
  • Think-tank discussions have covered
  • - Economic Development strategy frameworks -
    setting direction...What?
  • - Strategy implementation - plans How?
  • Now brief focus on evaluating the impact of the
    strategy and implementation How well are we
    doing?
  • Legislative requirements
  • a) White paper on Local Government (1998) -
    steps to producing an IDP
  • The use of monitoring tools to measure impact
    and performance
  • b) Municipal Systems Act (32/2000 Chapters 5/6)
  • Develop a performance management
    system
  • (Note Cape Town part of National Pilot
    Project, Balanced Scorecard)
  • c) Government Gazette (No. 22605, 2001)
  • General key performance indicators prescribed
    in terms of

4
  • 2. WHAT IS IMPACT ASSESSMENT?
  • Indicators
  • Show/reflect conditions, but not linked to
    causes
  • Performance Management
  • Assesses more than outcomes
  • - Council
  • - Services/Directorates
  • - Individuals
  • Impact Assessment
  • Direct link between actions and outcomes

5
  • 3. WHY DO WE NEED TO MEASURE IMPACT?
  • Key objectives of impact assessment work
  • - evaluate/assess outcomes in terms of
    resources (expenditure, time,
  • skills) in relation to achieving strategy
    goals/aims
  • - assess impact on income and budgets (MTIEF)
  • - monitor sustainability
  • - understand interrelationships and
    dependencies, plus contributions
  • of delivery partners

6
  • Why do we need to measure impact? (continued)
  • Plus
  • - part of strategy process - informs/drives
    strategy (and business plan)
  • - allows more flexible response to changing
    conditions
  • - allows for tracking of the impact of work
    done
  • Informs
  • - service delivery improvements
  • - decision-making
  • - programme and project management

7
  • 4. WHAT DO WE NEED TO MEASURE/EVALUATE?
  • Strategy and implementation
  • Strategy
  • - Council
  • - Directorate Building competitiveness/reduci
    ng poverty
  • framework
  • Programmes
  • - Mega projects e.g. Convention Centre
  • - Specialised service focussed e.g. community
    based job creation
  • programme or major events
  • Projects
  • - large, small
  • - theme based e.g. job opportunities

8
  • 5. TYPE OF IMPACT ASSESSMENT TOOLS WE NEED
  • The process by which one determines what to
    measure, how to
  • measure and to use the measures is more
    important than the
  • product itself
  • Product
  • - set of tools (info tables, databases,
    models, systems and
  • reports)
  • - set of guidelines/principles
  • Tools to be
  • - easy to use, input/monitor and report on
  • - repeatable and reliable
  • - transparent unambiguous
  • - cost efficient (cost of measuring should match
    business
  • benefits)
  • - integrated with other processes

9
  • 6. RANGE OF ECONOMIC DEVELOPMENT TOURISM
  • IMPACT ASSESSMENTS UNDERTAKEN
  • Initial research (1998)
  • Economic and Social Impact Assessment -
    methods application
  • Strategy
  • - Inputs to Corporate Balanced Scorecard
    process
  • - Financial and Economic Impact of a Joint
    Marketing Strategy
  • - Business Review Assessment Framework
  • assessment of relative impact and
    sustainability of business
  • programmes (in progress)
  • Programmes
  • - Convention Centre Impact analysis
  • - Foreign direct investment (Wesgro)

10
Range of Economic Development Tourism Impact
Assessments undertaken (continued) - Major
Events Early pilots Navy week, Golden
Oldies Rugby Framework currently being
developed to measure economic environmental
social cultural impact Pilots Volvo Ocean
Yacht Race (in partnership) Cape Argus Pick n
Pay Cycle Tour - Evaluation of 26
community-based job creation and small business
projects (metropolitan and local impact)
- Community-based Tourism Development Fund
initial framework - Job Opportunities
framework
11
  • TWO EXAMPLES OF IMPACT ASSESSMENTS/FRAMEWORKS
  • Financial and Economic Impact of a
  • Joint Marketing Strategy
  • Job opportunities framework

12
  • 7. FINANCIAL ECONOMIC IMPACT OF A JOINT
  • MARKETING STRATEGY
  • Aim
  • To provide framework model to assess
    quantify a Joint Marketing
  • Strategy
  • Key objectives
  • To assess
  • - extent of increased marketing efforts
  • - increase in direct marketing impact
  • - macro-economic impact of joint marketing
    strategy
  • - broader economic impact of joint marketing
    strategy
  • Methodology
  • - scenario building approach - single possible
    hypothetical joint
  • marketing structure

13
  • Financial Economic Impact of a Joint Marketing
    Strategy
  • (continued)
  • Challenges
  • - Methodology model, especially evaluation
    of brand
  • - Evaluation of broader economic benefits -
    complex, qualitative
  • - Data availability and collection
  • - Data comparisons across sectors
  • Lessons
  • - Key strategic input business case driver of
    strategy
  • implementation
  • - Produced unexpected key leverage area
    stimulation between sectors

14
Financial Economic Impact of a Joint Marketing
Strategy (continued)
15
  • 8. JOB OPPORTUNITIES FRAMEWORK METHODOLOGY
  • - INITIAL APPROACH
  • Approach to Job Creation
  • Based on the White Paper on Local Government
    (1998), which states the
  • following
  • local government should take active steps
    to ensure that the overall economic and social
  • conditions of the locality are conducive to
    the creation of employment opportunities, rather
  • than directly creating jobs.
  • Cognisance is also taken of the National
    requirement for job creation indicators as
  • one key performance measure
  • General Performance Indicators 10(d)
  • Number of jobs created through a
    municipalitys LED initiatives, including capital
    projects
  • Government Gazette No. 22605 (24 August 2001)
    (Vol. 434)
  • Short Review
  • - No ready made tools which matched EDTs
    needs
  • - Complex casual and outcome effects make it
    challenging to accurately
  • assess the impact (direct or indirect) of the
    specialised services and

16
  • Job Opportunity Framework Methodology - Initial
    Approach (cont.)
  • Evaluation approach
  • Short term
  • to develop an initial EDT approach and
    methodology, to define job
  • opportunities and to capture the EDT
    information for the period
  • - accepted result would be high level
  • - use to inform refinement
  • Medium term
  • to develop a refined, robust approach,
    methodology and process to collect
  • and monitor EDT direct jobs and job
    opportunities
  • Methodology
  • a) Job opportunity defined
  • Working definition
  • - direct jobs created through the
    Councils funding of a specialised
  • economic development and/or
  • - indirect job opportunities created
    through access to training, advice
  • and mentoring programmes

17
Job Opportunity Framework Methodology - Initial
Approach (continued) b) EDT customer/stakeholde
r job opportunities performance targets
were set for 2001/2002 These were based on
an initial estimate - less than 7000 job
opportunities average contribution - more
than 7000-8000 job opportunities above average
contribution - more than 8000 job
opportunities outstanding contribution c) A
simple framework for recording the EDT 2001/2002
job opportunities performance targets was
set up All EDT business plan programmes
(and projects) which delivered either
direct jobs and/or job opportunities in 2001/2
were recorded under the following services
- Foreign Direct Investment - Wesgro -
Small Business Support - Tourism - Conventions,
Incentives Leisure - Tourism Development
- Cape of Great Events - City Improvement
Districts - Sector Support Initiatives -
Informal trading services markets - Mun
Tender Advice Services Corp Procurement

18
Job Opportunity Framework Methodology - Initial
Approach (continued) d) Simple EDT guidelines
or assumptions were developed to estimate
the number of direct jobs and job opportunities
of each EDT programme In the absence
of precedents or clear research-based guidelines,
the EDT staff directly involved in the
programmes and projects made inputs to the
assumptions and every attempt was made to
- consult programme/project/practitioners on the
ground for guidance in setting the
assumptions - develop and use conservative
assumptions and numbers - use existing
norms and job multipliers and - access
the most detailed current information
19
  • Job Opportunity Framework Methodology - Initial
    Approach (continued)
  • Examples of EDT job opportunities assumptions
  • SMALL BUSINESS SUPPORT
  • Direct Jobs
  • x number of placements/employed equals x number
    of direct jobs
  • 1 start up business supported equals 2 direct
    jobs
  • x hive occupied equals 2 direct jobs
  • Job Opportunities
  • 1 in 25 people provided with info equals x job
    opportunities
  • x number of trainees/course attendees/business
    advice equals
  • x number of job opportunities

20
Job Opportunity Framework Methodology - Initial
Approach (continued) e) The EDT job
opportunities, assumptions and numbers were
cross-checked and refined - over 50 000 direct
jobs and - over 180 000 job opportunities were
delivered Based on the programme/project
objectives, 90 of job opportunities were
created for historical-disadvantaged individuals
or affirmable small business enterprises
21
  • Job Opportunity Framework Methodology - Initial
    Approach (continued)
  • f) Challenges
  • Overall Approach
  • Any methodology to assess numbers of direct
    jobs/job opportunities
  • should be part of a broader methodology to
    evaluate and monitor the
  • impact of EDT services on overall the
    Directorate business performance
  • Ideally, an accessible model and tools should be
    developed to evaluate
  • the Directorates overall impact, service
    impact as well as programme
  • and project impacts
  • Appropriate tools and systems and training
    should be put in place to
  • support the development and monitoring of job
    opportunities information

22
  • Job Opportunity Framework Methodology - Initial
    Approach (continued)
  • Within EDT service programmes
  • The range and type of programmes within EDT
    service varies
  • considerably which makes the development of
    job opportunities
  • assumptions complex, difficult to compare and
    there may be overlaps.
  • E.g. within sector support initiatives,
    different job opportunity
  • assumptions apply to the IT sector and urban
    agriculture.
  • The exact impact of EDT programmes/projects in
    terms of job
  • opportunities is difficult to isolate - other
    stakeholders activities may
  • potentially also have an influence.
  • EDT programmes and projects objectives may have
    intended impacts
  • other than job opportunities. E.g. a number of
    EDT services and
  • programmes are aimed at providing a business
    and visitor friendly
  • environment.
  • EDT programmes and projects job opportunities
    impacts may not be
  • realised in a financial budget year and need to
    be monitored overtime to

23
  • Job Opportunity Framework Methodology - Initial
    Approach (continued)
  • Between EDT service programmes
  • There may be multiple knock-on impacts of EDT
    job opportunities
  • between service programmes which are difficult
    to identify and measure
  • There may be double counting between certain
    of the EDT services,
  • although this was carefully minimised
  • No prioritisation or weighting was made of job
    opportunities assumptions
  • or numbers between EDT service programmes
  • Other
  • Base line data is difficult to access

24
  • Job Opportunity Framework Methodology - Initial
    Approach (continued)
  • The initial tables and review produced are
    valuable as for the first time in
  • Council, a Directorate has grappled with the
    complexities and practical
  • implementation of a job opportunity framework
    and system.
  • Useful learnings and possible improvements will
    also inform the
  • development of a more focussed refined
    approach and methodology
  • - currently underway to be used by EDT in
    2002/3.

25
  • 9. OVERVIEW
  • Need to develop a framework to assess impact of
    strategy, programmes,
  • projects complex and challenging
  • Need to assess more than economic impacts.
    Social, cultural and
  • environmental impacts must be included
  • Need to integrate impact assessment work into
    all business processes
  • plus align measures and reports for Corporate
    Directorate use
  • Specialised skills and inputs are needed, plus
    all Economic Development
  • Councillors and Officials should have some
    exposure/capacity building in
  • impact analyses and evaluations
  • Ideally, full time dedicated resources needed
  • Base data and support systems need to be in
    place (definitions, data,
  • information, models, guidelines and systems
    for capturing, reporting etc.)

26
  • Overview (continued)
  • Impact assessment is an area of work which is
    critical to Economic
  • Development as a local government function
  • Impact assessment forms a critical part of the
    strategy framework and
  • implementation process
  • Some initial thinking and assessments have
    been undertaken but this
  • needs to be actively taken forward
  • An important area to share lessons, linkages
    and how evaluation works
  • in practice - the SA Cities Network can assist
    with this process
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