Comparing Economic Regions a.k.a. What is Your Favorite Color

Last week I did some venting on how economic “rankings reports” very often miss the mark, or completely mislead the reader. Some people asked how we compare our economy to others if these reports are so flawed. The answer is: it depends…

First, consider the following question. What is your favorite color? Keep that color in mind. Now, what is your favorite color for a car? What is your favorite color for a shirt, or the walls in your house, or the case on your cell phone? I bet they are different. Just asking for somebody’s favorite color doesn’t really answer an intelligent question. This is what happened to me when I asked some economic developers to simply list our primary competitor markets.   

One economic developer/site selector returned the question with a question, by saying “competitor market for what?” The list of competitor states and metros is different if we are talking about attracting an industrial based company versus an office user. Then to complicate the question further, I was asked within industrial, are we talking about warehousing and distribution, or a manufacturing facility? Within manufacturing facilities, are we talking about high value add/high capital investment, or some lower value add operation? This went on for a while. 

My conclusion: we can no more generalize about our competitor markets (and rankings) than we can ask somebody about their favorite color being universally applicable. Each economic statistic or point of comparison depends on the issue that is being reviewed. This also means that we need to do more than explore a handful of statistics in a handful of communities. To be the smartest people at the table means we need to do a little more research.

Author’s note: If there is a particular economic or policy issue you would like covered in a later publication feel free to send your ideas and/or comments to [email protected]