Economic Impact Assessments + their value

What is an Economic Impact Assessment?

An economic impact assessment quantifies and qualifies the potential economic benefits which flow from an organisation’s operations.  This can be measured in terms of turnover, jobs created, value of output known as Gross Value Added or GVA, total monetary value, retail expenditure generated, development land brought into use, forecasts of potential supplier linkages and new firm formation.

These outputs / benefits allow funders and other decision makers to appraise the viability of a project based on their own criteria.  Thus in attempting to appreciate and estimate the scale of economic and business impact such activities might result in, an economic impact assessment represents a cost effective means of doing so, and a fundamental element of making a ‘business case’ for the intended project.

What is the value of an Economic Impact Assessment?

An economic impact assessment is useful for a whole range of purposes including the following:

  • Current and continuing operation – to make politicians, agencies and authorities, and other key stakeholders aware of the organisation or project’s presence, activities, and value, and how these activities ‘spin-off’ into the wider local, sub-regional, and national economy
  • Promotional mode – to emphasise the organisation or project’s value in ‘place-making’ or perhaps as a destination attracting business and leisure visitors and contributing to the local, sub-regional, and national tourism economy
  • Defensive mode – to emphasise the local, sub-regional, and national economic benefits potentially at risk of loss when or if the organisation or project is ‘under threat’ – demonstrating the ‘counter-factual’
  • Influence mode – to disseminate to the organisation’s staff, or project’s customers and users, and potentially funding bodies and others of influence, the range and value of the project and / or the business and its activities
  • Business opportunity mode – to emphasise the value of opportunities for other businesses to relate to or showcase their activities and services through the project, whether at specific events or indeed on a permanent basis, and through related supply chains
  • Expansion mode – to justify the need for funding support or assistance + building in local business partner support + potentially funding off-site infrastructure works
  • Developmental mode – to provide a compelling business case for development or expansion of facilities or services + particularly for the banks and other funders when either a new facility or indeed new location or site development is planned
  • Planning mode – used as supporting documentation to either accompany a planning application or to assist in the pre-application decision making process.

Thus an economic impact assessment can serve a number of purposes, but perhaps the most significant it is a means of quantifying and qualifying the potential economic benefits which might flow from a project proposal or from an organisation’s continuing operations or in defence of these ongoing operations. It can also be used as supporting documentation to accompany a planning application or assist in the overall development process should that be the organisation’s future intention or aspiration.

Keddie Consulting has undertaken numerous economic and socio-economic impact assessments as a core area of the firm’s work, and these span a wide spectrum of project and organisational types.  For more information please email [email protected].

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