posted by Michael J. Doherty on Monday, November 20, 2023
A lot of people know that Decision Innovation Solutions is an economic analytics firm based in Des Moines with expertise in ag-related economics and agribusiness analysis. What is less well-known is the expertise DIS has gained in broader economic development projects for municipalities.
From tax revenues to infrastructure costs, DIS is well known for its work in using IMPLAN to create fine-tuned studies that analyze income and job creation at the local and state levels for a variety of industries and economic impacts. On its own or combined with its expertise in using the IMPLAN computer model, DIS has developed capacity for guiding strategic decisions and allocating scarce resources by public entities. In some projects, DIS has helped create an overall economic development plant that combines agribusiness development with other development projects within a single county.
There are two distinct models that DIS has refined over time: “economic impact” analysis and “economic contribution” analysis. These types of studies are used to assess the economic effects of a specific activity, project, industry, or event on the economy. However, “economic impact” focuses on different aspects and provides distinct perspectives than does “economic contribution”.
An economic impact study includes direct, indirect, and induced economic effects. Direct effects are the immediate economic changes resulting from the activity or new entity, while indirect effects are the changes in other industries that supply goods and services to the directly affected industry. Induced effects are the changes in spending patterns by households as a result of changes in income. An economic contribution study examines and estimates the direct economic contributions of a particular industry or large firm spread across a geographical area. An economic impact study is more likely to include tax revenues and secondary effects on other industries, whereas an economic contribution study is more likely to focus on job creation and overall economic values generated.
IMPLAN is the most commonly used economic impact data and analytical software in the US and is often the software of choice by land grant universities. IMPLAN is used by regional planning commissions, executive directors, directors of planning, board members, and other decision makers to understand their regions and win approval from stakeholders.
IMPLAN uses over 90 different government sources to update their annual dataset, which gives users the ability to analyze impacts at the national, state, county, zip code, and legislative district geo-levels. This massive dataset will soon be updated to include the year 2022 numbers.
An example “impact study” by DIS was one undertaken in Poweshiek County for the City of Grinnell, Iowa, to project the economic impact of a soybean crushing facility. This impact included a list of associated impacts on the local soybean prices, job creation in the local area, increases in tax revenues, benefits to supporting service businesses in the area, and others.
Sapphire Lake was also a project in Poweshiek County. The project was a proposed public access lake and housing development. DIS provided an analysis to quantify the total economic impact of the lake for all major aspects of the development. Also, Tax Increment Financing (TIF) had been identified as the best option for financing the project, so a significant portion of the DIS analysis included a base case scenario for stakeholder consideration.
This is but one of several examples of DIS capabilities to provide multiple-project analysis for an overall economic development plan for a community, or to work with engineering firms as partners, to provide the economic analysis called for in a broader development project.