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Economic indicators - a tool for economic development

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Economic indicators - a tool for economic development
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Thomas, Kay-Bain
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English
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61 leaves : charts ; 28 cm

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Economic indicators ( lcsh )
Economic indicators -- Case studies -- Colorado -- Boulder ( lcsh )
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Colorado -- Boulder ( fast )
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Case studies. ( fast )
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bibliography ( marcgt )
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non-fiction ( marcgt )
Case studies ( fast )
Academic theses ( lcgft )

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Includes bibliographical references (pages 60-61).
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Submitted in partial fulfillment of the requirements for the degree, Master of Planning and Community Development, College of Design and Planning.
Statement of Responsibility:
by Kay-Bain Thomas.

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University of Colorado Denver
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LD1190.A78 1986 .T563 ( lcc )

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ECONOMIC INDICATORS-A TOOL FOR ECONOMIC DEVELOPMENT
BY
KAY-BAIN THOMAS
B.S., KANSAS STATE UNIVERSITY, 1966 B.S., GEOLOGY, MESA COLLEGE, 1982
A thesis submitted to the Faculty of the Planning and Community Development Program, College of Design end Planning of the University of Colorado at Denver In partial fulfillment of the requirements for the degree of Masters of Planning and Community Development May, 1986


This thesis for the Master of Planning and Community Development
degree by Kay Baln-Thomas has been approved for the
Department of Planning and Community Development
by
Robert Horn
Herbert Smith


This paper is dedicated to my parents,
L.R. and Leatha Bain who instilled In me a zest for living and who taught that the beat of the different drum was not out of step with life.


ACKNOWLEDGEMENTS
I would like to express my appreciation to the members of my thesis committee:
1. Robert Horn, for chairing the committee and providing guidance in the writing of the thesis, for combining the theoretical models of economic development with real world experiences.
2. Daniel Schler, Ph.D., for his constructive feetoack for evaluating this thesis, for his acceptance of contrary opinions in the field of community development.
3. Herbert Smith, for his knowledge of the planning process and proaction actions.
I would like to thank Richard Hadley and the staff of the Boulder Chamber of Commerce who provided me with the opportunity to develop these indicators.
I would also like to express thanks to my sisters, Barbara Bain and Cheryl Konitz , who offered constant encouragement.
And finally, to my family, Dick, Mandy, and Ashley, who tolerated my absences from family life and provided me with emotional support.


ABSTRACT
ECONOMIC INDICATORS-A TOOL FOR ECONOMIC DEVELOPMENT
KAY BAIN-THOMAS
Economic Indicators are readily available at the national and state levels but are more difficult to obtain at thelocal level. This.thesis proposes that they .are vital to a community in its economic development efforts and suggests a process to develop an economic indicator system using Boulder as a case stud/. In particular, economic indicators are necessary to the strategic planning process for economic development efforts by enabling a community to quantify Its assets and liabilities and to monitor changes in the local economy. Using an economic indicator system along with an other tools such as an economic profile, shift-share analysis, and location quotient model a comprehensive picture of the local economy can be obtained. Then intervention actions can be developed which can retain and/or expand existing firms, stimulate the indigenous creation process, or attract new firms to the community.
The proposed economic indicators were evaluated on the following criteria -clarity, current information, accuracy, and comprehensiveness. The criteria of comprehensiveness was based on indicators needed to measure the physical and built environment, human resources, financial services, consumer activity and locational pull.
Economic indicators can be presented in several forms such as text, tables, graphs, or mapping techniques. Formatting and the presentation of the data is one of the most important aspects of the indicator system.
ENVIRONMENTAL DESIGN
auraria library


A general planning process was used in developing the economic indicators. It can be developed by either a public or private organization. The Boulder Chamber of Commerce sponsored the indicators presented in this paper. Therefore, It is geared more to the business community and economic development efforts of the Chamber. A planning department could also collect the data but it would focus on changes on tax revenue more than a chamber of commerce.
The ultimate goal of the economic indicator system is to provide knowledge to business persons, policymakers, and the public so that actions, whether they be Interventlve or within the free enterprise system .will enable a community to have a stronger, healthier economy.


TABLE OF CONTENTS
Chapter 1 Introduction 1
Chapter 2 Economic Activities of Local Economies 4
Chapter 3 Economic Development 11
Chapter 4 16
Chapter 5 The Process of Developing Economic Indicators 20
Chapter 6 Summary 34
TABLES
1. Summary of Economic Indicators 21
2. Data Sources for Economic Indicators 25
3. Boulder County Employment and Wages 38
4. Geographic Distribution of Sales Tax Revenue, 1985 Summary 42
5. Geographic Distribution of Sales Tax Revenue, Jan. 1986 44
6. Migration of Boulder Business Firms 55
7. Cost of Living Index 56
8. Real Estate Transactions Summary for 1985 57
9. Boulder County Transaction Account Deposits 58
10. Gonsumer Price Index 58
11. Evaluation of the Boulder Chamber of Commerce
Economic Indicators 32


CHARTS
1. Distribution of Employment for Colorado, Metro
Denver & Boulder County 37
2. Boulder City Employment 39
3. Boulder County Employment 40
4. Boulder Sales Tax 1985 & 1986 43
5. Boulder Sales Tax 1984 & 1985 41
6. Gross Sales for Food Stores 45
7. Gross Sales for Eating Places 46
8. Gross Sales for General Merchandise 47
9. Gross Sales for Home Furnishings 48
10. Gross Sales for Apparel Stxes 49
11. Gross Sales for Automotive Trade 50
12. Gross Sales for Misc. Businesses 51
13. Boulder Accomodation Tax Revenue, 1984,1985 & 1986 52
14. Gross Sales for Motel/Hotel Accomodations 53
15. Value of New Construction Permits 54
16. Yalueof Residential and Nonresldential Permits 54


CHAPTER 1
INTRODUCTION
Economic Indicators are essential tools for the economic development effort of a community. They are essential because they provide information cm business conditions, tax revenue, and employment etc. By using this information business persons, policy makers, and the public can be proactive and more focused in their reactive efforts. Trends and relationships can be easily identified and problems better defined when changes and conditions are quantified. Economic indicators are also vital to the strategic planning process in economic development programs. Assessing an area's economic assets and liabilites is one of the first steps in the strategic planning process. For example, if an economic indicator shows that more firms are leaving an area than are being created or moving into the area, the economic development organization must identify reasons for this outmigration and establish an action plan to alleviate this problem. Economic indicators are then used for monitoring changes that are associated with these efforts. They provide a method for evaluating the effectiveness of the economic development action plan. The process of creating these Indicators require data collection from the city, county, state, and private sector. This thesis will examine, explore, develop and evaluate which economic indicators are most useful based on the criteria of comprehensiveness, clarity, accuracy, and current information.
The purpose of the study is to develop economic Indicators using Boulder as a case study.


2
This paper Is the outcome of work Initially begun during a PCD Internship with the Boulder Chamber of Commerce. It is intended that the process also be applicable to public sector agencies such as planning departments and economic development agencies in a variety of cities.
Local economic indicators fulfill a need for a common source of data for local information. Economic statistics are readily available at the state and national levels but the collection of local statistics is more difficult This is ironic because economic activity is a local phenomena and information describing and measuring this activity should be easily collected.
It is assumed that this process will be applied in a market setting in which the ultimate goal Is to improve a community’s economic health. Within this market framework, Intervention action may take the form of improving infrastructure, stimulating capital markets with lower interest and tax rates, joint efforts by the city and business community in attracting new industries, and retraining the unemployed and underemployed work force. Redistribution of income Is not a goal. Economic indicators are defined as measurements of the local economy that change more than once a year. They differ from an economic profile which describes long-term conditions and relationships. Therefore, this paper does not focus on economic development tools such as shift-share, input/output analysis, the economic base model and the location quotient model. Economic indicators are a reflection of changes in the local economy and these changes are measured more than onceavear. Another constraint of this stud/ is that it is developed for the economic development organizations with limited time and money resources.
The methodology is a descriptive approach based on literature review of local economies,


3
economic development, and community development Work done for the Boulder Chamber of Commerce was used as a case study. A rationale was developed to support the need for economic indicators and a matrix was developed for evaluating each indicator based on clarity, comprehensiveness, current information and accuracy. General planning procedures were used in the process of developing indicators.
In the chapters that follow I will first examine the process of local economies (Chapter 2). Then I shall describe the major activites of economic development (Chapter 3). Later I will discuss the need for indicators (Chapter 4) and finally I will examine the process of developing economic indicators (Chapter 5).


4
CHAPTER 2
ECONOMIC ACTIVITIES OF LOCAL ECONOMIES
A necessity in developing local economic indicators is to understand the local economy. What are the major forces driving the economy? The local economy exists within a geographical framework whether It be a small farming community or a metropolitan area Economic forces are both endogenous (within the community) and exogenous (outside forces). An example of an endogenous fores would be a change in policy of the city to limit growth by granting only a certain number of housing permits. An exogenous change would be the federal government lowering the discount rate which In turn would lower mortgage rates. Consequently, the number of homes sold could increase. In both these cases the number of deed transfers would fluctuate and the economic indicators would register these changes. Economic indicators must be sensitive to both external and internal economic forces.
Schumpeter 1 viewed economic life as a closed circular flow In which "sellers of commodities appear again as buyers in sufficient measure to acquire those goods which will maintain their consumption and their productive equipment in the next economic period*. He believed that economic activity could have any motive, even a sp ritual one, the ultimate purpose Is the satisfaction of wants (concept of utility).
Weber 2 defined the city as a place where "the market becomes an essential component of the livelihood of the settlers’ in which the inhabitants live primarily off trade and commerce rather than apiculture. He proposed the following economic roles for cities:
Market settlements-The market forms the economic center where specialization of


5
products enable both the non urban and urban population to exchange their wants and needs for articles of trade and commerce.
Consumer city-Economic opportunity is influenced by buying habits of consumers spending their incomes. These consumers can be either inhabitants of the city or purchasers from other areas.
Producer city—Cities act as suppliers to outside areas. This type has a high concentration of factories and manufacturers.
Commercial city-These cities are financial centers where banks, brokerages and other financial Institutions locate. Weber further claimed that one city Is not a pure form but a combination of all types.
Heilbruin 3 states that cities are open economies because they do not produce all that they consume nor consume all that they produce. Therefore, trade is essential. Cities export their manufactured goods to other regions. These export Industries are the basic Industries of a city and become the economic driving force of the local economy. Proceeds from these basic activities pay for goods and services that are not produced locally (imports). City economies are shaped by outside forces such as the demand for locally manufactured goods and the supply of imported goods and services. Hellbrun further states that the Internal economic structure of a city Is Influenced by the factors of production-land, labor, capital and entrepreneurship. These internal and external forces effect both the besic economic activities (goods produced for outside consumption) and the non basic economic forces (goods and services produced and consumed


6
locally).
Another Important economic factor proposed by Heilbrun Is linkages. This Is the movement of goods and communications between firms and business persons. It is the locational pull of one firm on another. For example, 'locational economies" are a clustering of firms of the same industry and "urbanization economies" are the attraction of firms from different industries. A city economy can have both.
Heilbrun notes that economic activity tends to concentrate geographically because transportation cost and/ or production costs are reduced by the process of agglomeration. Economic activities that ere dependent on materials or markets will locate where transportation costs are minimized. Economic activities in which labor, energy, or amenities are key factors will locate where production costs are minimized.
Harmston ^ views economic activity as developing within a geographical gramework which is influenced by natural resources, physical configuration and technological conditions. Households, stores, factories and government units are microunits of the community economic system. A system of exchange results when each microunit produces more of certain products or services than it consumes and it consumes more of other goods and services than it produces. These patterns of production and consumption change over time. Change and instability are inherent in the system. Community economic systems are complex trading economies that offer a distinoe economic advantage.
Jane Jacobs argues in Cities and the Wealth of Nations that not all cities have the same economic forces. She defines city region to those large areas where innovation and


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import-replacement are the dominant economic force. These two forces are lacking in other regions. She classifies regions as city regions, supply regions, abandoned and clearance regions with stagnating and declining cities in the later categories. Five great economic foreces are released when import-replacing becomes explosive in city regions; 5
1. Enlarged city markets for new and different imports.
2. Abrupt Increase In number and kinds of jobs
3. Increase transplants of city work Into non urban locations.
4. New US8S for technology.
5. Growth of city capital.
She further states that productive cities create a balanced mixed economy In their own area and shape stunted and unbalance economies in regions that do not have productive cities.
By encompassing the previous mentioned theories on city economies the major economic activities of communities are;
1. Human Resources- People are the most basic unit of any community's economy. The number of workers, their occupations and type of industry is critical in analyzing a local economy. Changes in the labor force is one of the most basic elements of an economic indicator system. Economic development efforts are usually targeted towards improving the human resource element of the community. There are many aspects of human resources that are difficult too quantify such as motivation and innovation. Surveys used in economic profiles could
address these issues.


8
2. Physical and Built Envlronment-The economic value and use of land aid real estate on that land Is an important economic activity in a community. Generally, a healthy real estate market is indicative of a healthy economy. Factors such as the number and market value of real estate transactions, number of units on the market versus those sold, vacancy rates and an Inventory of land uses (commercial, Industrial, and residential) are Important in focusing on land as an economic concept In rural communities, the agricultural use of land should be emphasized. This could include acreage under cultivation and crops produced. In natural resource areas indicators should reflect the market price of the mineral and tonnage or barrels mined.
3. Financial Services- There are three main financial areas-consumer, real estate, and commercial, industrial and agricultural. The flow of investment funds is facilitated by investment banks, capital venture funds, money center banks, and the federal, state, or local government Investment capital is quite difficult to track are] therefore difficult to include in an economic indicator system. Capital for large real estate loans usually originate outside communities. For smaller scale projects, the local commercial bank, thrifts and local government with bonds such as industrial revenue bonds are the major source of funds. Thrifts and commercial banks are main sources of consumer loans. Bank and thrift deposits are most easily to collect of all these financial service activities.


9
4. Consumer forces-Agglomerstlon of economic behavior which Include Individuals, companies, or governmental units Is an Important element in the dynamics of the local economy. Retail sales are good Indicators for consumer activity in local communities. Tourism is a major economic activity im many Colorado communities. It brings outside money into the local economy and consequently stimulates retail sales and service sector jobs such as ski lift operators, retail clerks, restaurant personnel, and hotel/motel personnel. The service sector is the fastest growing industrial sector in the U.S. and it is driven by consumer forces.
5. Locational Pull-The drawing power of a local economy is effected by the community's locational advantages. Locational pull can be based on transportation, geography or the actual linkages between industries (both similar and diverse industries). The locational pull of a community measures the vitality of the local economy.
6. Economic globillzotlon-Local economies are no longer self-sufficient and immune to the vicissitudes of the world economy. Today competition is a world-wide phenomena. Industries such as high tech, automotive, petroleum, tourism, and agriculture are greatly influenced by the world economy. Several Boulder County high tech firms have relocated the manufacturing and assembling operations offshore. As a consequence, high tech workers lost jobs.There has been a shift In labor Intensive Industries to locate in areas with lower wage rates. The labor markets of the Pacific Rim have been beneficiaries at the expense of the U.S. labor market
American farmers no longer have the competitive advantage of producing crops in the


10
world market The/ must compete with the lower prices of the emerging third world countries.
The strength of the American dollar directly affects the balance of trade. When It Is strong, foreign investors are less likely to purchase American made goods or travel in the U.S. When the dollar is weakened, purchases and tourism increase.
Communities must be able to anticipate, recognize and take advantage of global changes. Further research is needed in this area of developing economic indicators that are sensitive to global changes. Presently, these indicators are limited in the agricultural areas. The type and amount of a local area's imports and exports should be important elements of an economic profile if unavailable for an economic indicator system.
The profession of economic development analyzes these major economic actlvltes and takes interventive action to bring about purposive change to improve the local economy.


CHAPTER 3
ECONOMIC DEVELOPMENT
Economic development lies with the framework of community development It is on Intervention process that brings about social change within a community. Christenson and Robinson define community development as 6 ' A group of people in a community reaching a decision to intiate a social action process (planned intervention) to change their economic, social, cultural or environmental situation.' Economic development is a subclassification of community development It is an Intervention process that focuses on the local economy. Intervention occurs as efforts to expand or improve existing businesses, attracting new firms, and/or stimulating the creation of new firms.
Economic development is a vital growing profession. For many years the desire to Improve the economic health of a community has been a uniting force for community development Within the last 10 years there has been a renewed focus on economic development. Competition between communities has become keen. Cities and states are contributing more money to economic development activities. Economic improvement is the ultimate goal of these efforts.
There are three major strategies of economic development efforts. First, retention and expansion of existing firms and businesses Is a key activity. These efforts can include improving the infrastructure, offering technical and financial assistance .coordinating training programs, aiding In tax abatement, Improving the dialogue between government, Industry, and


12
academia, acting as omsbudsman for business interest and recognizing the outstanding contributions of the business community.7 Existing businesses are the core ot the local economy. When they contract or leave, the ripple effect takes hold and the entire local structure is weakened. Also, on unhealthy and unhappy existing business community can act as a detriment to attracting new industries.
The second type of economic development strategy is the creation of new indigenous firms. Research indicates that 90X ® of new jobs created come from new company start-ups and expansion of existing businesses. New firms and entrepreneurs usually come from a successful large firm or university setting. This spin-off effect Is quite pervasive In the high tech centers intheU.S. i.e., Silicon Valley, Route 128, Boulder, Research Triangle, and Austin. Economic development efforts used to stimulate indigenous business creations include improving access to capital venture companies and commercial banks, contributing to technology transferr by Increasing communication betweeen major corporations, government research centers and the entrepreneurs, encouraging networking between technical and professional services, providing or supporting training programs, recognizing local entrepreneurs, developing industrial incubators, and providing technical assistance such as guidance in preparing market plans, Inventory planning and contracting with suppliers.
The third category of economic development strategy is attracting new firms to the area. This strategy receives the most publicity but only accounts for 10X of the new jobs. Targeting is an important concept in attraction strategies. Communities identify a limited number of industries by matching the community locational attributes with the needs of a particular type


13
of Industry. Firms that are most likely to relocate are those that have experienced high growth rates. High growth firms can be found in many locations, sectors and industries. In 1979, David Birch 9 reported that small businesses had generated almost 2/3 of the new jobs in the economy. In the post decade, the Fortune 500 companies have not in aggregate added a single new job to the U.S. economy. 10 Most of the new jobs come from newer companies. Another important consideration when planning for business attraction efforts is that there has been a structural shift in the American economy from the manufacturing to the service sectors. Currently, 75% of the American workforce Is employed in sevice sectors. 11 It has been estimated that by the year 2000 these sectors will encompass 90* of the workforce. This growth will be related to information processing, telecommunications, food and food service industries, convention/lodging sectors and the do-it-yourself market.
The three major economic development strategies - retention and expansion of existing firms, creation of new Indigenous firms, and business attraction efforts are part of the long term dynamic process of bringing about economic changes to the local economy. M. Ross Boyle ^ has suggested an economic development strategic plannning process. A review of these steps reveal a basic consequential logic to the process. Models based on similar logic but containing a greater or lesser number of specific steps are equally valid The seven steps are:
1. Assessing an area’s economic assets and liabilities-economic audit.
2. Selecting target industry groups.
3. Setting economic development goals.
4. Identifying barriers to business Investment.


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5. Preparing an action plan.
6. Implementing the plan.
7. Reviewing and adjusting the plan.
Economic indicators are needed to quantifiably identify problems and adjust and evaluate the performance of an action plan. Therefore, they are critical to the first and seventh stage of the strategic planning process.
Economic Indicators aided Boulder in identifying and monitoring changes in the economy. Boulder County experienced massive layoffs beginning in the fall of 1984 and culminating in Jan. of 1985 (Chart 3). A major segment of this layoff was attributed to problems of Storage Tech. However, some of the unemployed workers were from firms that had moved out of Boulder. Some of these firms cited the reason that the cost-of-living was too high in Boulder (Chart 7). As a result of these layoffs, the real estate market became glutted. Outmigration was greater than inmigration of the population. The number of real estate deed transfers decreased significantly in 1985 (Tabled). New construction activity declined by 48.6* (Chart 15 and 16). Gross sales were flat for 1985 (Charts 6-12).
These economic indicators demonstrated to the Chamber of Commerce that intervention action to Improve the local economy was destreable. The Chamber responded by making economic development Its number one priority. An economic development council was created and an action plan adopted. The action plan consisted of several programs-Red Flag, Entrepreneur of the Year Award, Small Business Institute, andA New Leader in the Rockies (attracting new businesses). The Red Flag program is a plan to stop the outmigration of firms in Boulder.


15
Companies are contacted by the Chamber If they are seriously considering leaving Boulder. Reasons for their dissatisfaction are identified and alternative solutions sought The Small Business Institute has been created to help existing and newly formed small businesses by offering classes, and seminars and services of a Small Business Library. The Entrepreneur of the Year Award Is an effort to give community recognition to the Boulder entrepreneurial environment A New Leader in the Rockies is a program for attracting raw businesses. A part of this program is the targeted Industry study. This Is a consensus building process which examines a community's strength and weaknesses (transportation, labor, Infrastructure, quality of life and education) and matches these with deslreable Industries. The list of targeted industries Is then given to the committee that develops a plan to contact firms within these Industries. A marketing committee develops a program for advertising and promoting Boulder. The end result of all these efforts is to improve the unemployment problem. It is hoped that the trickle down effect will take hold and Improved economic health will permeate Into the banking, real estate, and retail sales areas. As a consequence, the tax base of Boulder will improve.
In the example above, economic indicators were used to identify and quantify problems.
In the months to follow, changes in these indicators may be associated with the effectiveness of the economic development program of the Boulder Chamber of Commerce.


CHAPTER 4
THE NEED FOR ECONOMIC INDICATORS
The most basic reason for developing economic Indicators is that they provide an economic picture of the community. They assist in identifying problem areas and areas of opportunity for new business ventures. Economic indicators enable a community to be proactive and more focused In Its reactive economic development efforts.
A local business person can use these Indicators In analyzing their business operation.
For example, a restaurant owner notices a decline in his Nov. revenues. By using information from Chart 7 she/he can observe that gross sales for restaurants in the entire city was off in Nov. The restaurant owner can also use Chart 7 for determining his market share of the total restaurant business In Boulder.
Chart 7 could also be utilized by persons interested in opening a new restaurant in Boulder. Information from this chart could be used for revenue projections. The chart also shows the monthly and seasonal changes. Opening a new restaurant at the end of spring might be more feasible than during the fall when the market becomes weaker. This would be a more proactive action.
More commonly, economic actions are reactive in nature. Since economic indicators are a measure of change, they can help narrow and focus reactive alternatives. First, they mcry be able to geographically or structurally pinpoint a problem area Sales tax revenue are down


17
(Table 4) in a certain area of the city such as the East Downtown area. Upon further examination it is found that stores in that area have a limited amount of parking and that traffic congestion make It undeslreable for the shopper. A coordinated effort between the shop owners and the city transportation department could alleviate the traffic problem and consequently sale proceeds and the tax revenue could increase. By analyzing changes in the amount of sales and tax proceeds a cost benefit analysis could be developed to demonstrate the cost of changing the parklng/trafflc pattern. In this case, the economic indicators are used to quantify problems and also used in a technical analysis study- Ultimately, the city and shop owners would benefit
Another way that economic indicators help narrow reactive efforts is that most are a measure of magnitude and direction. As a result, the business person/policy maker can modify his actions accordingly. A small change In the consumer price index (Table 10) may just require an recogiition of that change whereas a large jump in the Inflation factor may require a decision to build up of supplies.
A third factor that narrows reactive alternatives is that trends can be easity identified. The business person/policy maker can modify his behavior by assuming the trend will continue or that there will be a change. A homebuilder has observed an increasing number of new home permits granted by the city (Chart and Table 16). As a consequence, he may modify his constructions plans because he believes the market has peaked.
Economic indicators serve two basic roles. As an Information provider they can


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aid a community's self-help approach as a fact-gathering mechanism. Rothman's * 3 model of locality development would be an example of this enabler-catalyst role. Secondly, economic Indicators can be used In technical assistance. This social planning approach Involves the technical process of problem solving by rational controlled change (purposive). In other words, indicators can be used as input to technical analyses such as cost benefit studies( as in the previous mentioned traffic and parking problem example), correlation studies, and regression models.
In conclusion, economic indicators are important to the community's economic development efforts because:
1. They identify important changing elements of the economy. Strengths and weaknesses of the local economy can be determined.
2. They enable one to monitor these changes and target significant problem areas or opportunities.
3. They enable one to act proactively and in a more focused reactive manner.
4. Assocatlons and relationships can be Identified
5. Purposive change can occur through the provision of information used in a self-help or technical assistance model.
6. They provide a "snapshot picture" of the environment.
An economic Indicator system Is an essential tool for economic development efforts. But


19
they must be used with other tools such as economic profiles, shift-share analysis, and economic base analysis to provide a comprehensive picture of the local economy. They do have several limitations. Causal relations can not be determined by just using Indicators. Other statistical methods must be used. Indicators are descriptive and therefore do not take into consideration such factors as reasons for a decline in the sales tax revenue. Often valuable data such as income, exports and imports are published once a year. An economic profile is a more effective mechanism than economic Indicators for disseminating this Information. Economic Indicators must be used in conjunction with other economic development tools for a balanced approach of providing information on the local economy.


CHAPTER 5
THE PROCESS OF DEVELOPING ECONOMIC INDICATORS
This chapter will focus on the procedures for developing Indicators. The process developed for the Boulder Chamber of Commerce will be used as a case stud/. The Initial step in establishing economic indicators is the formulation of goals and guidelines. For Boulder the general goal was to provide a comprehensive description of the current business conditions.
This goal was then further refined by guidelines. The efforts of data collection and updating would not be all consuming due to limited time and money resources. Secondary data would be the primary source of information. The indicators would be geared toward the business person, those currently in business and potential members of the business community. The time frame of reporting would be on a quarterly basis to the members of the Boulder Chamber of Commerce.
After establishing these goals and guidelines a survey of other chambers of commerce indicators was completed. Table 1 summarizes these findings. Most of these indicators were 1 page summaries. The data were presented either in text or table for matt and it was difficult to grasp trends. Transportation, employment, and construction activity were most frequently used. The information was most commonly presented in aggregate form. It was determined that information should be disaggregated whenever possiblaFrom this inventory other areas of improvement were identifled-a need for a more comprehensive picture of the local economy and an increase use of charts and graphs to visually demonstrate trends.


TABLE 1 SUMMARY OF ECONOMIC HDCATORS
ORGANIZATION CONSTRUCTION SALES TAX COHERENCE/
REVENUE TOURISM
DENVER CHAPCER
OF COERCE X HOTEL VACANCY
MISSOULA, MT X
CHAIfJEROF
COMhCRCE
CASPER CHAMBER OF COMMERCE X X
DAHO FALLS CHAhCEROF com-erce X
BLLHGS,MT CHAPBEROF COMPERCE X
PARK CITY CHAMBER OF COMPERCE X X VISITOR NIGHT TALLES, TOURISM l-FACT
BAfK
DEPOSITS
X
EPFLOYT’CNT
WVTELEPHOfC AR SERVICE RETAL CONSUMER
ORUTEITES HANDOUT SALES PRCE HDEX
HOOKUP
X X x X X
VOOD PRODUCTS AND U S FOREST SERVICE, PUBLIC SCHOOLS, AND HOSPITAL PAYROLL AND ET-PLOYMENT
POSTAL
RECEPTS
X
X
X
X ICV BUS HESSES AG. PRICES
REQUEST FOR HFORMATKH FROM TIC CHAMBER
N>


I
22
The next step in the process wes to identify which parameters to use. By using concepts previously discussed In chapters 2 and 3 and Interviewing business persons a skelletal framework of the economy was devised.
There are four major anchors in the Boulder economy-Colorado University, the federal laboratories, the nucleus of high technology firms, and the non basic firms that provide services and trade to the area. The proximity to the Denver metro area and Stapleton International airport adds a fifth dimension to the economy. The federal laboratories- National Bureau of Standards, Environomental Research Laboratories (NQAA), National Center of Atmospheric Research, and the Telecommunications Institute and the Colorado University ore centers for research and development. As a result of their presence IBM, Ball ,and Beech Aircraft have been attracted to Boulder. Furthermore, these large firms have stimulated the indigenous creation of many small high tech firms. The city of Boulder is home to 36* of the state's software firms, 238 of the state's biotechnology firms, 15* for computers and 15* for microelectronic firms.1* The service sector, retail and wholesale trade, finance, insuranace, and real estate are a support and network system for the Boulder economy. The synergistic relationship that exist between the research centers and business is an important example of the locational pull phenomena that was previously discussed.
Parameters have been developed to measure each of the 6 major economic activities in a


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Ixal economy-human resources, the physical and built environment, financial services, locational pull, consumer forces, and globalization.
Human Resource can be measured by the number of workers In the labor force, employed and unemployed. The number of workers in each industrial classification and average wages can be obtained at the county level but is more difficult to get at the city level. Occupational information is important but many times this information does rat change yearly. (It would be important information for an economic profile but rat for an Indicator system.) It is important when disseminating local labor information to also give regional and national statistics. This enables the reader to compare the local statistics with the rest of the country.
Physical and the built environment parameters would focus on the real estate market and natural resources. Examples would Include real estate transactions, vacancy rates for office and apartments,and new building permits issued by the city. The amount of minerals mined, barrels of oil produced, amount of crops produced, and acreage under cultivation would be measures of the economic activity of the physical environment
Financial service parameters would measure the flow of money. Bank deposits, industrial revenue bonds, and capital venture activities would be indicative of this activity.
Locational pull can be measured by a list of in-migration and out-migration of firms. The expansion and indigenous creation process are also key elements of the locational pull. The cost-of-living index is an excellent way to demonstrate the geographical


23
advantages/disadvantages of living in the local area The indigenous creation process of new firms are the most difficult to obtain at the local level. However, new listing of business telephones, or the number of new incorporations could be used.
Consumer forces are the most easily obtained parameters. These could include such measures as gross retail sales revenue, sales tax revenue and gross sales from accomodation taxes (measure of tourism)and motel/hotel occupancy rates, and number of overnight visitors.
The effect of economic globalization is another difficult parameter to measure for the local area. Economic globalization affects the local economy and further research is needed to improve these parameters. A list of firms moving operations offshore and the number of jobs lost would be a valuable source of Information. As was previously mentioned, world consumer commodity prices on agricultural and minerals could be used. At this time there are few indicators for the economic globalization category.
Once the parameters have been identified, the next step is to locate the data sources and determine the reporting time frame. Secondary data from the city, county, and state are the primary sources of Information. The city collects Information on gross retail sales, sales tax revenue, accomodation sales and taxes, and new construction building permits. The county is another source of information. The county assessors office, county clerk and public trustee gather and analyze information dealing with real estate transactions, industrial revenue bonds, and foreclosures. The state gathers Information on employment, wages, and Incorporations.


24
Table 2 summarizes the Inventory of data sources. The federal government also collects useful economic statistics such as personal income and the consumer price index. Other sources of information may come from organizations such as chambers of commmerce, regional councils of governments, real estate companies, board of realtors, and private consulting firms.
The next phase of establishing economic indicators is the actual collection and systemization of the information. At this point a computer and a database software package are valuable tools. If this resource Is unavailable a notebook(s) with a section for each indicator is an alternative. Each worksheet should have the contact person, agency, phone number and date the information is availabla It does simplify the procedure if information can be sent to the researcher, otherwise, a phone call will suffice. Each worksheet should contain the raw data and all the needed calculations. Information can be given as raw data or a time series study which shows the change of the same parameter over time. This is useful for tracking trends. A cross-sectional study is a study conducted only at one point in time. It is a snapshot picture of many subjects. An example is the cost-of-living study that provides an average index for many categories such as housing, transportation, and utilities for over 200 cities in the U.S for a specific time period (Table 7). It can not be used as a time series because the 200 cities that make up the study change from one quarter to the next
There are two basic rules to follow In the collection process. Systemize anything repetitious and simplify that information which can not be systemIzed.


PAGE 25
TABLE 2 DATA SOURCES FOR ECONOMIC INDICATORS
PHYSICAL AND BUILT ENVIRONMENT
REAl£5TATLIBAN$ACTIQtl$.
County Assessors Office Board of Realtors
HOUSES ON THE MARKET VS. SOLD Board of Realtors
FORECLOSURES County Public Trustee
VACANCY RATES Commercial Realtors Apartment Assoc.
Private Consulting Gps.
CONSTRUCTION ACTIVITY City Building Dept
FINANCIAL SERVICES
BANK DEPOSITS
Federal Reserve Bank
University Business Research Centers
VENTURE CAPITAL Private Consulting Ops.
INDUSTRIAL REVENUE BONDS County Commissioners
LOCATIONAL PULL
LIST OF IN-OUT MIGRATION FIRMS Newspaper
Chamber of Commerce
COST-OF-LIVING INDEX Chamber of Commerce
BUSINESS STARTUPS/FAILURE Colorado Office of Secretary of State New business phone listings New business utility hookups
HUMAN RESOURCES
COUNTY WAGE AND SALARY EMPLOY. Colorado Division of Employment and Training
COUNTY LABOR FORCE. EMPLOYED Colorado Division of Employment and Training
UNEMPLOYMENT RATE Colorado Division of Employment and Training
CITY EMPLOYMENT Colorado Division of Employment are! Training
CONSUMER ACTIVITY
SALES TAX REVENUE City Sales Tax Office
GROSS RETAIL SALES City Sales Tax Office
ACCOMODATION TAX City Seles Tax Office
CONSUMER PRICE INDEX Colorado Division of Emp. and Training
EFFECTIVE BUYING INCOME SALES AND MARKETING MANAGEMENT SURVEY OF BUYING POWER


26
The next step in the indicator process is the actual formatting and presentation of data This is one of the most important aspect of the indicator system. To have an impact on the business community, policymakers and the public numbers must be effectively communicated. It is not only the accuracy of the numbers but also the way numbers are displayed that influence interpretation. There are four common methods of information transfer: * ®
1) Textual or verbal
2) Tabular
3) Graphing techniques
4) Mapping technique
The textual/verbal technique is the simpliest and most direct. It is most effective when comparing just a few statistics. A statistical table is useful for comparison of many numbers. Numbers are listed in some orderly fashion in which patterns, similarities, and differences can be easily observed.
Graphing techniques facilitate the communication of trends and nonspatial relationships. The graphs enable the user to quickly grasp the main idea They attract aid hold the user's attention. The most common types of graphs are column, bar, line, pie, area and scatter. Each expresses a relationship between two variables using the Cartesian coordinate system. The column chart is used to show variation in the value of an item at equal time intervals. Variations of several items can be demonstrated by plotting the value of each on the same chart


27
by either stacking the columns on top of each other or by placing side by side. When multiple columns are used the spacing between the groups, the amount of overlap and the order of plotting Influence the effectlvemess of the chart A bar chart looks like a horizontal column chart It compares different items at a specific point in time. It can also be stacked or overlapped. The advantage of a line graph is that it can show the trends and relationship of a large amount of numbers. The.fluctuation of the line indicates a variation in the trend. The distance of the line from the horizontal axis at any given point Indicates a quantity. Relationships can be observed by plotting several lines on the same graph. Pie charts are used to compare relative proportions of parts that make up a whole. The pie represents the totality while the size of each piece shows its share. How each piece is arranged is important in the comparison of all sectors as well as the whole Area charts are made by creating bands by shading In areas between lines. The thickness of the band at any one point indicates its value. Bands can be stacked on top of each other. The distance from the horizontal axis to the top of the bands show the sum of all the bands. The scatter chart is used to indicate the relationship between two variable by plotting points. Points which are scattered randomly suggest a weak association. Points which are arranged in a linear pattern show a stronger association.
The forth method of information transfer is mapping techniques. Maps communicate spatial techniques emphasizing distance, direction and areal patterns. Like graphs they are usually mere appealing than text and tables. They require mire time, effort and expertise In


28
creating them.
The time frame of publication is another critical factor. For this stud/, indicators hove been defined es those parameters which are measured more than once a year. Therefore, publication could range from daily to twice a year. The more comprehensive indicators will require a longer time period between publications in order to allow adequate time for collection and analysis. A quarterly publication offers the advantage of providing current information and allowing adequate time for collection and analysis. Readership is determlnlned by who receives copies of the indicators. Many times this is done through the membership of the organization publishing the economic indicators. It is critical that the information in the indicators be usefulto the ultimate reader.
The final stage of developing economic indicators is the constant evaluation and review of the economic indicators and the system which they attempt to measure. During the first year of publication it is important to get feedback from the users and researchers in the community. In Boulder, the City Budget Director, the City Director of Research and Evaluation, C.U. Business Research Center Director, and the Directory of the Private Industry Program and the Executive Director of the Chamber of Commerce reviewed the proposed economic indicators.
In evaluating the economic indicators the following points should be considered:
Comprehensive-Do they reflect the major economic activities of the local economy? In reality, this effort towards a comprehensive picture must be tempered with the time and money


29
resource capability of the organization. The major categories of land, labor, capital, consumer activity, locational pull should each have on Indicator.
Current-Is the most up-to-date Information used? Frequently .there can be a lag period of serveral months In many of the state level agencies. Therefore, the most current information will be a measure of several months past Consistent updating of information is an important element in the economic indicator process. Often critical decisions are based on the most current economic information available.
Accurate-Are the sources reliable and the data points accurate? If secondary data is given , it is important for the researcher to know how the information was collected and the limitations of the data.
Clear-Are the facts and figures presented effectively? Appropriate methods of transferring data must be used-text, tables, graphs, or maps. Trends and relationships must be easily communicated.
Using the above criteria, economic indicators (located in the Appendix) developed for the Boulder Chamber of Commerce were evaluated. Table 11 summarizes these findings.
Comprehensive-All the major categories are represented except economic globalization.
There are adequate measures of consumer activity, human resources, financial services, and the
\
physical and built environment. The indicators could include more information on vacancy rates, occupancy rates, and new business Incorporations.


30
Current- The most current information has been used. However, some indicators have several months lag between collection and reporting.
Accurate-The secondary data are from reliable sources.
Clear-The use of the many graphs effectively communicate the trends and relationships of a large amount of data The tables below the graphs enable the user to obtain more detailed information.
From these economic Indicators a picture of the local economy can be given. Boulder County’s employment is unique when comparing it to the state and the metro area The manufacturing sector is by far the most dominant sector (Chart 1). Wholesale trade and tranportation and utilities are sectors not represented as strongly in comparison to the metro area and the state. Table 3 shows that the workers in the federal government have the highest average wages while the retail trade area has the lowest. There are more service companies in Boulder County than any other type. Unemployment for the City of Boulder is increasing (Chart 2) There were more people working in Dec. 1984 and Dec. 1985. Chart 3 shows the change of unemployment for the county. Boulder sales tax revenue are up 3.3* from last Jan. (Chart 4). But all categories except food stores, transportation and utilities and the other category show a decline in revenues. There are many geographical areas that are showing major decreases in 1986 revenues (Table 5). Gross retail sales are flat for the city. New construction activity is very soft. The value of new construction was off 48.6* in


31
1985 (Chart 15 & 16). More firms are moving out of Boulder than migrating in (Table 6). Boulder has one of the highest cost-of-living In the entire state. Housing Is significantly higher than other Coloradan communities. The real estate market remains soft The condominium market remains weak (Table 8). Bank deposits are up Z% from last year (Table 9). Table 10 shows that inflation is up 3.98 for the Denver area. In conclusion, these indicators show a very sluggish local economy where unemployment is a major problem.


32
TABLE 11
EVALUATION OF THE BOULDER CHAMBER OF COMMERCE ECONOMIC
INDICATORS
CURRENT ACCURATE CLEAR USE
Chart 1 low 1 year lag time high reliable source high Shows the uniqueness of Boulder County-Manufacturing is the dominant sect.
Table 3 low 1 year lag time high reliable source med Units may be confusing. Time series for wage and emp.
Chart 2 high 2 months lag low This information is derived from the county data using a proportional method. high Easy to observe the yearly Compares Boulder employment from 1 year to the next.
Chart 3 high 2 months lag high reliable source high Fluctuations and trends are easily grasped An accurate picture of unemp. is critical to econ. dev. efforts.
Chart 4 &5 high 2 months lag high reliable source high General business The bar graphs climate gauge, effectively com- Used in the public munlcates the sector for trend yearly differences analysis.
Table 4&5 high 2 months lag high reliable source medium Location of geographical areas somewhat confusing. Denotes geograph, strength and weakness. Used for locational decisions.


33
Charts 6- Current 13 high 2 months lag Accurate high reliable source Clarity high Trends and seasonal fluctuates Use trend analysis & market share
Chart 13&14high high high Easy to grasp comparisons. Tourism
Chart 15&16high high high Trend analysis
Table 6 high on-going med. More firms may leave than are listed. med. The terms out-and in-migration may be confusing. Identification of problem area
Table 7 medium 1 quarter lag high reliable source medium Averages may be confusing. Shows comparative advantage of one city from another.
Table 8 high Information can be obtained anytime. high reliable source medium The term real estate transaction is unclear. Indicator of the of the real estate market
Table 9 low 2 quarter lag high medium Transaction acct not commonly understood. Measures the flow of money.
Table 10 high 2 months lag high high Measure of inflation and cost-of-living.


34
CHAPTER 6 SUMMARY
Economic indicators are measures of the local economy that change more than once annually. They are essential tools for economic development efforts. They cm be used with other economic development tools such as economic profiles, shift-share analysis, and economic base analysis to provide a comprehensive picture of the local economy. They are a vital part of the strategic planning process of economic development programs. Economic indicators identify and quantify problem areas. They cm be used in assessing the economic strength and weakness of a community. They cm also be used to monitor effectiveness of economic development programs by measuring the changes in the local economy. The end result will be a community that acts proactively and in a more focused reactive effort. Economic indicators cm also be used by the business community by providing information used in making business decisions such as production and locational decisions. Information on trends in tax revenues cm also be utilized by the public sector.
The economic indicators developed for the Boulder Chamber of Commerce adequately fulfilled the criteria of accuracy, current Information, and clarity. It is recommended that Information on office vacancy rates, hotel/motel occupancy rates and measurements of economic globalization be added to give a more comprehensive picture of the economy.
Public sector agencies such as planning departments and economic development agencies cm also collect and publish indicators. Their indicators differ than those collected by the


35
Chamber by concentrating more on tax revenues. As a consequence of publishing the Chamber's preliminary economic indicators, the city and county have suggested lists for potential 1ndicators.The proposed steps In developing an indicator system can be used by private and public sector organizations.
The major steps in developing indicators are:
1) Establish guidelines and goals.
2) Survey economic indicators from other organizations.
3) Choose parameters by the analysis of the local economic structure.
4) Complete an inventory of d8ta sources.
5) Collect and systemize the information
6) Format the presentation of data using text, tables, graphs, and maps.
7) Evaluate and review the economic indicators.Economic indicators must accurately reflect t human resources, physical and built environment, financial services, consumer forces, economic globalization and the locational pull of the community. They provide general and technical Information to the business person, policy maker, and public enabling purposive change to occur. Ultimately, the economic health of the community is improved by the economic development Intervention whether it be activities focused on retaining and expanding already existing firms or activities for stimulating the indigenous creation process (entrepreneurship) or community efforts to attract raw Industry to the area.


36
Economic indicators are needed to identify problem areas in the local economy. They can quantify the magnitude and direction of select measurements.
The economic indicators must meet the test of comprehensiveness, clarity, accuracy and current information if they are to be a viable tool for economic development efforts. The more accurately they reflect the local economy the more effective they are in the intervention process of precipitating purposive change. Ultimately, the economic well-being of the community is improved.


APPENDIX


37
CHART 1
DISTRIBUTION OF EMPLOYMENT FOR COLORADO. METRO DENVER & BOULDER COUNTY
SERVICES FIN.. INS., ft. RT. RETAIL TRADE WHOLESALE TRADE TRANS. & UTIL. MANUFACTURING CONSTRUCTION MINING
STATE S. LOCAL GOV.
FED.GOV.
â–  COLORADO El METRO DENVER M BOULDER COUNTY
^-----------1 t
0 5 10 15 20 25 30 35
PERCENT
SOURCE COLORADO DIV. OF EMP. &. TRAINING REPORT 1 COLORADO EMP. & WAGES COVERED BY UNEMP. INSURANCE METRO DENVER: DENVER. DOUGLAS. JEFFERSON. ARAPAHOE. ADAMS. AND BOULDER COUNTIES


38
TABLE 3
BOULDER COUNTY EMPLOYMENT AND WAGES COVERED BY UNEMPLOYMENT INSURANCE 1ST QUARTER 1985
DIVISION UNITS AVERAGE EMPLOYMENT AVERAGE WAGES
Federal Qov. 37 2,5 98 $2,268
State and Local Gov. 54 17,575 1,334
Total Gov. 91 20,174 1,455
Private
Ag. Forestry & Fish 102 741 1,134
Mining 56 288 1,872
Construction 624 4,676 1,517
Manufacturing 507 30,358 2,100
Trans. & Utilities 145 2,325 1,891
Wholesale Trade 359 2,633 1,688
Retail Trade 1,229 18,229 814
Fin., lns.,andR.E. 523 3,516 1,505
Services 2,023 19,630 1,405
Total Privet 5,568 82,396 1,563
Source: Colorado Division of Employment and Training


39
CHART 2
BOULDER (CITY) EMPLOYMENT 1984 & 1985
49000
48000
47000
46000
45000
J
M A M J J A MONTH
S 0 N D
1985 EMT.0YMHT FOR BOULDER (CITY)
EMP. YORKERS
JAN. 46,670
FEB. 46,622
MARCH 47,008
APRL 47,321
MAY 48,013
jure 48,330
JULY 48,214
AUGUST 48,162
SEPT. 48,490
OCT. 48,361
NOV. 47,871
DEC. * 30,941
UNEMP. RATE NO. UTCMLOYED
82 4,144
7.9 4,017
72 3,620
62 3,143
6.1 3,110
3.9 3,022
5.8 2,961
5.9 3,024
5.7 2,921
68 3,102
6.7 3,438
7 3,579
•PRELHNARY
DEC. UNADJUSTED UMM>LOY. RATES: U.S.-6.7*, STATE-6.5*
DENVER/BOULDER LMA 5.7®
SOURCE: COLORADO DIVISION OF EMPLOYMENT AND TRANNG
TIC CITY EMPLOYMENT DATA IS CALCULATED AS A PROPORTION OF TIC COUNTY DATA.


CHART 3
BOULDER COUNTY EMPLOYMENT
1984____________MONTH___________1985
+- LABOR FORCE EMPLOYED WORKERS
MONTH/YEAR TOTAL LABOR
Jan., 1984 115,484
Feb. 115,964
March 117,309
April 118,002
May 118,655
June 121,246
July 120,869
Aug. 120,750
Sept. 118,796
Oct. 121,568
Nov. 121,178
Dec. 122,132
Jan., 1985 120,045
Feb. 119,645
March 119,661
April 119,800
May 120,889
June 121,964
July 121,031
Aug. 121,156
Sept. 121,594
Oct. 122,172
Nov. 121,294
Dec. 120,407
FORCE TOTAL EMPLOYED
110,252 111,269 112,650 113,427 113,338 116,066 115,807 115,872 113,954 115,893 114,930 114,805 110,670 110,556 111,471 112,689 113,854 115,128 114,332 114,314 114,985 115,154 113,517 112,311
TOTAL UNEMP. RATE
5,232 4.5
4,695 4.0
4,659 4.0
4,575 3.9
5,317 4.5
5,180 4.3
5062 4.2
4,878 4.0
4,842 4.1
5,675 4.7
6,248 5.2
7,327 6.0
9,375 7.8
9,089 7.6
8,190 6.8
7,111 5.9
7,035 5.8
6,836 5.6
6,699 5.5
6,842 5.6
6,609 5.4
7,018 5.7
7,777 6.4
8,096 6.7
Source: Colorado Division of Employment and Training


41
CHART 5
BOULDER SALES TAX 1984 & I98S DEC.YEAR TO DATE
C
A
T
E
G
0
R
Y
Other
Construct. Use Tax Bldg. Mat-Retail Auto. Trade Trans. & Util. Gen. Mer. Retail Home Furnish. Apparel Stores Eating Places Food Stores
0 1000 2000 3000 4000 5000
$ REVENUE (000)
6000
CATEGORY -1984- -1985- % CHANGE
FOOD STORES 3,252,205 3,381,844 4.0
EATING PLACES 2,087,716 2,218,533 6.3
APPAREL STORES 1,108,341 1,133,352 2.3
HOME FURNISHINGS 911,863 951,292 4.3
GEN. MERCH.-RETAIL 5,091,622 5,101,244 0.2
TRAN. 8c UTILITIES 2,140,623 2,307,257 7.8
AUTO. TRADE 1,927,164 1,870,433 (2.9)
BUILDING MAT.-RETAIL 754,453 758,117 (.5)
CONSTRUCTION USE TAX 1,557,941 1,378,004 (11.5)
OTHER 4,447,721 4,767,440 7.2
TOTAL SOURCE: CITY OF BOULDER 23,279,649 23,867,516 2.5


TABLE 4
42
GEOGRAPHIC DISTRIBUTION OF SALES TAX REVENUE 1984 & 1985 SUMMARY
AREA 1984 YTD 1985 YTD X CHANGE
BURA-Arapahoe to Walnut, 26th-32nd X 6,469,095 X 6,773,950 4.7
CA0ID-Broadway to Walnut,
9th-16th 649,008 750,089 15.6
CAQID Buildout-Arapahoe to Walnut
5th-18th 809,831 736,832 (9)
Boulder Mall-Pe8rl St.
1100-1499 550,066 561,185 2.0
East Downtown-Arapahoe to Walnut
14th-23rd 311,696 277,209 (11.1)
Downtown Extension-Arapahoe to
University, 9th- 13th 215,942 247,600 14.7
Gunbarrel Industrial 2,447,063 2,625,150 7.3
Gunbarrel Commercial 319,438 394,163 23.4
Boulder Industrial 2,011,693 2,372,645 17.9
North 28th Commercial-Arnett to
Yalmont, 26th-34th 1,632,754 1,638,197 .3
Table Mesa-Broadway to Toedtli Dr. 934,960 903,973 (3.3)
Basemar 492,938 473,610 (3.9)
Thunderblrd 243,253 216,276 (11.1)
The Hill 374,651 405,525 8.2
North Broadway-Alpine to Spruce
9th-13th 329,464 303,616 (7.8)
Source: City of Boulder Sales Tax Office


43
CHART 4
BOULDER SALES TAX 1985 & 1986 YEAR TO DATE-JAN.
C
A
T
E
6
0
R
Y
Other
Construct. Use Tax Bldg. Mat.-Retail Auto. Trade Trans. & Util. Gen. Mer. Retail Home Furnish. Apparel Stores Eating Places Food Stores
0 50 100 150 200 250 300 350 400
$ REVENUE(000)
CATEGORY -1985- -1986- * CHANGE
FOOD STORES 257,215 268,512 4.4
EATING PLACES 170,516 170,262 (.1)
APPAREL STORES 74,404 70,647 (5.0)
HOME FURNISHINGS 69,795 67,591 (3.2)
GEN. MERCH.-RETAIL 366,308 346,117 (5.5)
TRAN. & UTILITIES 149,927 207,322 38.3
AUTO. TRADE 141,321 138,329 (2.1)
BUILDING MAT.-RETAIL 44,402 42,133 (5.1)
CONSTRUCTION USE TAX 97,301 94,212 (3.2)
OTHER 194,888 213,272 9.4
TOTAL SOURCE: CITY OF BOULDER 1,566,077 1,618,397 3.3


TABLE 5
GEOGRAPHIC DISTRIBUTION OF SALES TAX REVENUE
AREA JANUARY 1986 1985 YTD 1986 YTD % CHANGE
BURA-Arapahoe to Walnut, 26th-32nd s 442,594 t 457,372 3.3
CAGID-Broadway to Walnut,
9th-16th 60,046 45,935 (23.5)
CAGID Buildout-Arapahoe to Walnut
5th-18th 46,524 54,284 16.7
Boulder Mall-Pearl St.
1100-1499 40,423 39,274 (2.8)
East Downtown-Arapahoe to Walnut
14th-23rd 22,988 14,444 (37.2)
Downtown Extension-Arapahoe to
University, 9th-13th 22,889 21,218 (7.3)
Gunbarrel Industrial 94,214 128,692 36.6
Gunbarrel Commercial 26,926 28,388 5.4
Boulder Industrial 114,570 181,123 58.1
North 28th Commercial-Arnett to
Velmont, 26th-34th 137,302 119,779 (12.8)
Table Mesa-Broadway to Toedtli Dr. 70,378 62,584 (11.7)
Basemar 35,536 32,806 (7.7)
Thunderbird 17,987 15,251 (15.2)
The Hill 34,912 38,667 10.8
North Broadway-Alpine to Spruce
9th-13th 24,576 22,875 (6.9)
Source: City of Boulder Sales Tax Office


CHART 6
GROSS SALES FOR FOOD STORES IN THE CITY OF BOULDER
19000000 18000000 17000000 16000000 15000000
DOLLARS
14000000 13000000 12000000 11000000 10000000
JFMAMJJASOND
MONTH
GROSS SUES FOR FOOD STORES
MONTH 1904 1963 1966 % CHANGE
$ $ $ 1985-1986
JAN. 11163423 14783504
FEB. 15926673 14286613
MARCH 15991343 16451085
AFRL 14704939 13643738
MAY 14532399 15608487
JUE 16780074 17139972
JULY 14974311 15755421
AUG. 17233833 15446796
SEPT 18324941 176&5055
NOV. 13379364 13561320
DEC. 16756768 17994120
17202233 17223918
SOURCE: CfTY OF BOULDER SALES TAX OFF EE


CHART 7
6R0SS SALES FOR EATING PLACES IN THE CITY OF BOULDER
SOURCE: CITY OF BOULDER
♦- 1984 +• 1985 «- 1986
GROSS SALES FOR EATMG PLACES
MONTHS
JAN.
FEB.
MARCH
APRL
MAY
jure
JULY
AUGUST
SEPT.
OCT.
NOV
DEC.
1904
t
7424294
7404365
8883215
7650904
8823471
9325137
8834309
9053968
9427529
9969311
8943848
9038811
1985
$
8191930
7680719
8814505
7993845
9628913
10407779
9139643
9850134
10524616
9449352
7930000
9837663
1986 SB CHANGE $ 1985-1986
8516259 4
SOURCE: CITY OF BOULDER SALES TAX OFFICE


CHART 8
DOLLARS
GROSS SALES FOR GENERAL MERCHANDISE ESTABLISHMENTS
MONTH
1904 +• 1985 «- 1986
GROSS SALES FOR GEKRAL MKCHAICKE STORES
MONTHS 1904 1983 1986 % CHANGE
1985-1986
JAN. 23026012 29388203
FEB. 21321511 24557131
MARCH 69655980 88380462
APRL 24485476 27788926
MAY 24966218 28666620
jure 81057192 101588333
JULY 26748807 26659230
AUG. 26760582 31127322
SEPT. 83606074 95623820
OCT. 29551909
NOV. 23536918 28724843
DEC. 137915831 150921286
SOURCE: CITY OF BOULDER SALES TAX OFFICE


CHART 9
GROSS SALES FOR HOME FURNISHINGS ESTABLISHMENTS
16000000
15000000 *
14000000 13000000 12000000 11000000 DOLLARS 10000000
9000000 >
8000000 7000000 6000000 5000000 4000000
J FMAMJJASOND
1984 ^ 1985 *- 1986
GROSS SALES FOR HOT€ RJRNEHKGS
MONTHS
JAN.
FEB.
MARCH
APRL
MAY
JUfC
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
1984
$
8792002
8968689
14246151
7412081
7830092
13231515
7780926
9001855
14453173
8824272
8683619
15230403
1985
I
8123445
7076890
12815408
7623348
7406118
12566183
9445621
10941509
13396008
9451617
8449688
8854438
1986
t
8272588
* CHANGE 1985-1986 2
SOURCE; CITY OF BOULDER SALES TAX OFFCE


CHART 10
DOLLARS
CROSS SALES FOR APPAREL STORES CITY OF BOULDER
10000000
9000000
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
i
y I
z A 1
Y t

MAMJJASOND
MONTHS
♦* 1984 +• 1985 *• 1986
GROSS SALES FOR APPAREL STORES
MONTHS 1904 1985
JAN. 3234907 3629277
FEB. 3179058 3629926
MARCH 3998768 5081037
AFRL 3404335 4409245
MAY 4102659 4372870
JLfC 4260215 5054689
JULY 3676479 4172267
AUG. 4770292 4655023
SEPT. 6098050 6327827
OCT. 4793537 4391788
NOV. 4508810 4276683
DEC. 4067036 8854438
1906
% CHANGE 1905-1986
3433045


CHART 11
GROSS SALES FOR AUTOMOTIVE TRADE BUSINESSES
♦- 1984 1985 *- 1986
GROSS SALES FOR AUTOMOTIVE TRADE
MONTHS 1984 1905 1986 * CHANGE
1985-1986
JAN. 18691744 16289454
FEB. 17267259 16245124
MARCH 21016572 22518295
AFRL 19640752 19107366
MAY 22792910 20176495
jure 24153165 23561707
JULY 22046231 23320558
AUG. 20552970 22020887
SEPT. 20378140 21383069
OCT. 22415010 18829570
NOV. 20365885 19468949
DEC. 21024706 21021384
SOURCE: CITY OF BOULTER SALES TAX OFFICE


51
CHART 12
GROSS SALES FOR Ml SC. BUSINESSES INCLUDING MANUFACTURERS
160000000 140000000 120000000 100000000 DOLLARS 80000000 60000000 40000000 20000000 0
JFMAMJJASOND
MONTHS

A / \ ,
A / '\ V \\ / 4“ 1984
\ 7 1985

GROSS SALES FOR MEC. CATEGORY
MONTHS 1984 % 1985 %
JAN. 52203696 48863333
FEB. 51081935
MARCH 93318432 95945081
APRL 38892290 57460002
MAY 58752389 77455574
JUK 112842288 116904309
JULY 61532652 63262871
AUG. 65447772 69060874
SEPT. 102903825 124987931
NOV. 55427267 75683463
DEC. 54056672 75141313
140692932 161922321
1986 * CHANGE
♦ 1985-1986
69190482 42
SOURCE: CITY OF BOULDER SALES TAX OFF EE


52
CHART 13
BOULDER ACCOMMODATION TAX REVENUE. 1984. 1985.
& 1986
T
A
X
R
E
V
E
N
U
E
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Jan. Feb. Mar Apr My Jun Jul Aug Spt Oct Nov Dec
1
1984 ADJUSTED TO 5.5X H 1985 AT 5.5X
1986
ACCOMODATION TAX REVENUE
JANUARY 1965 40,736
FEBRUARY 29,857
MARCH 71,505
APRIL 56,147
MAY 67,646
JUNE 76,015
JULY 87,018
AUGUST 97,350
SEPTEMBER 66,195
OCTOBER 64,705
NOVEMBER 45,887
CITY OF BOULDER SALES TAX OFFICE


CHART 14
DOLLARS
GROSS SALES FOR MOTEL/HOTEL ACCOMODATIONS
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
JFMAMJJASOND
+â–  1984 1985 *â–  1986
GROSS PROCEEDS FOR ACCOMODATIONS
MONTHS
JAN
FEB.
MARCH
APRL
MAY
jure
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
1984
_J______
936772
905990
1037137
940725
1134895
1371443
1473724
1610936
869563
1263432
885989
731816
1985
J_______
827945
583517
1356616
1069877
1279034
1426382
1630073
1817219
1255574
1211000
874884
746712
1986 % CHANGE
$ 1985-1986
797599 -4
SOURCE: CITY OF BOULDER SALES TAX OFFICE


CHART 15
VALUE OF HEW CONSTRUCTION PERMITS FOR BOULDER 1083-1986
25
20
MILLIONS 15 * 10 5 0


-
1 1 9 1 1 i J
pis urn mi m m m m n i m
I 2 3 4 5 6 7 8 9 10 II 12 13
__________ACCOUNTING PERIOD
â–  1983 19 1984 H 1985 03 1986
CHART 16
VALUE OF RESIDENTIAL AND NONRESIDENTIAL PERMITS. CITY OF BOULDER. 1985
1
2 3
4 5 6 7 8 9
ACCOUNTING PERIOD
10 11 12 13
B NONRES., 1985 B RES.. 1985
KV CONSTRUCTION ACTIVITY
- 1985 YEAR END SUMMARY 1986
CUMULATIVE S3 CHANGE ACCT. * CHANGE
FOR 1985 FROM 1984 PERIOD *2 FROM 1985 FOR *2
VALUE OF BULDNG PERMITS ($) 56,004,523 -48.6 3,357751 -5593
NO. OF BLDG. PERMITS 904 -9.3 73
VALUE OF RES. PERMITS ($) 30,452,703 -37.3 2,691,100
NO. OF RES. PERMITS 290 -23.5 45
VALUE OF NOTCHES. PERMITS ($) 25,551,820 -57.6 666,651
NO. OF NOWES. PERMITS 614 -0.6 28
SOURCE; CITY OF BOULDER
NOTE: VALUE OF NONCSDENTIAL IS TIC TOTAL VALUE OF KV CONSTRUCTION PERMITS MNUS 1 FAMLY DVELLNG, 2 FAMLY DVELLNG, AN) MULTI-FAMLY DVELLMG


55
TABLE 6
MIGRATION OF BOULDER BUSINESS FIRMS
1984-85
OUT-MIGRATION
COMPANY JOBS DESTINATION
Aspen Ribbons 265 Lafayette
McDeta (Gunbarrel) 121 Broomfield
American Laser 100 Utah
Computer Automation 125 California
Lifecare Systems 75 Boulder County
Electro-Optics 200 Carlsbad, CA and Hong Kong
Frame Technology 45 Canon City
IN-MIGRATION
Norand 30 From Iowa
CliniCom 40 Minneapolis
Identification Devices 40 Westminster
EXISTING FIRMS THAT WILL OR HAVE EXPANDED ELSEWHERE
Ball Corporation 2,500 Jefferson County
Neodata 600 Boulder County
Agrigenetics 20 Madison, Wise.


56
TABLE 7
COST OF LIVING INDEX
ALL-ITEMS INDEX GROCERY ITEMS HOUSING
Denver 108.9 Ft. Collins 115.1 Boulder 140.6
Boulder 108.4 Co. Springs 110.8 Denver 134.5
Ft. Collins 101.4 Boulder 110.7 Co. Springs 100.3
Longmont 97.9 Denver 110.3 Longmont 99.9
Grand Jet. 96.2 Grand Jet. 109.0 Ft. Collins 99.4
Co. Springs 95.8 Longmont 108.2 Grand Jet. 95.3
Pueblo 91.6 Pueblo 99.0 Pueblo 82.1
UTILITIES TRANSPORTATION HEALTH CARE
Denver 73 Denver 112.9 Pueblo 113.6
Boulder 73.9 Grand Jet. 103.7 Boulder 110.3
Grand Jet. 70.7 Longmont 103.5 Longmont 108.8
Pueblo 68.5 Boulder 102.6 Denver 107.3
Co. Springs 62.8 Ft. Collins 100.6 Ft. Collins 102.5
Ft. Collins 68.0 Co. Springs 98.9 Co. Springs 95.7
Longmont 60.9 Pueblo 96.2 Grand Jet. 95.2
MISC. ALL-ITEMS INDEX FOR OTHER CITIES IN THE NATION
Ft. Collins 107.5 Atlanta 107.7
Denver 100.9 Austin 111.6
Longmont 99.3 San Diego 116.5
Boulder 98.2 St. Louis 97.2
Grand Jet. 96.0 New York 142.5
Pueblo 95.9 Seattle 107.1
Co. Springs 95.0
Source: American Chamber of Commerce Research Association Inter-City Cost ofL iving index, Forth Quarter i985
The ACCRA Cost of Living Index is location-specific. It is an estimation of cost of living differentials among cities. It is not a time series index. It does not include tax burden. Intercity differences of 3 or fewer points is not statistically significant. 100 is the national average.


57
TABLE 8
REAL ESTATE TRANSACTIONS SUMMARY FOR 1985
CITY OF BOULDER REMAINING BOULDER COUNTY
CATEGORIES -1984- -1985- -1984- -1985-
NO. OF NO. OF NO. OF NO. OF
TRANS- TRANS- TRANS- TRANS-
ACTION ACTION ACTION ACTION
RESIDENTIAL
SINGLE FAM. 1,225 1,227 2,443 2,125
DUP./TRIPLX. 36 22 64 55
4-8 UNITS 17 13 31 10
+9 UNITS 11 8 4 1
CONDOM IN. 1,123 616 441 229
COMMERCIAL
MERCHAND. 13 8
OFFICES 21 3 5 1
RESTAURANT 3 2 3 4
WAREHOUSE 11 10 5 8
MED. BLDG. 1 1 0 0
GAR., AUTO
REPAIR 2 1 0 0
AUTO DEAL. 1 0 2 1
INDUSTRIAL
MANUF ACT. /PROCESS. 3 4 1 3
WAREHOUSE 1 1
SOURCE: BOULDER COUNTY ASSESSOR OFFICE
DEED TRANSFERS ARE OF SELECT CATEGORIES NOT A COMPREHENSIVE TOTAL


58
TABLE 9
BOULDER COUNTY TRANSACTION ACCOUNT DEPOSITS
1984
1 ST QUARTER NOT AVAILABLE
1985
$366,638,000
% CHANGE
2ND QUARTER $356,034,000 $352,328,000
-1.0
3RD QUARTER $377,000,000 $387,695,000
+3.0
4TH QUARTER $378,649,000
SOURCE: FEDERAL RESERVE, KANSAS CITY BRANCE
INCLUDES 25 COMMERCIAL AND INDUSTRIAL BANKS IN BOULDER COUNTY. TRANSACTION ACCOUNTS INCLUDE DEMAND DEPOSITS, AUTOMATED TRANSFERS, TELEPHONE ACCOUNTS, AND NOW ACCOUNTS. REGULAR SAY I NOS ACCOUNTS, TIME SAYINGS ACCOUNTS, AND MONEY MARKET DEMAND ACCOUNTS ARE EXCLUDED.
TABLE 10
CONSUMER PRICE INDEX-JANUARY 1986
U.S. AVERAGE
DENVER
1967=100
% Change 1 Yr. Ago
% Change 1 Yr. Ago
All Item 328.4 3.9
364.4 3.9


59
FOOTNOTES
1. Joseph Schumpeter, The Theory of Economic Development, page 3.
2. Max Weber, The City, page 10.
3. James Heilbruin, Urban Economics and Public Policy, page 17.
4. Floyd Harmston, The Community as as Economic System, page 3.
5. Jane Jacobs, Cities and the Wealth of Nations, page 63.
6. James Christenson and J.S. Robinson, Community Development in America, p. 12.
7. Moving Towards Proactivity, A Report on McManis Association’s Third Survey of
Chambers of Commerce Economic Development Efforts, Feb. 1985.
8. Competitive Advantage, page 47.
9. CompetiitiveAdvantage, National Council for Urban Economic Development, page 8.
10. "Moving Towards Proactivity", A Report on the McManis Association's Third Annual Survey
of Chamber of Commerce Economic Development Efforts, Feb. 1985.
11. Competitive Advantage, page 8.
12. M. Ross Boyle,"The Strategic Planning Process-Assessing a Community's Economic Assets",
Economic Development Commentary, page 3.
13. F.M. Cox et al, Strategies of Community Organization, p.24 -25.
14. Advanced Tech Trend Report. Strategic Assessment Inc., 1985.
15. Jeff Simpson, “Questions totfixeT, ACCRA Newsletter, Dec.-Jan. 1985-1986.


BIBLIOGRAPHY
Advanced Tech Trend Report, Strategic Assessment Inc., Boulder, CO, September, 1965.
Aronson ,J. Richard Management Policies in Local Government Finance. International City Management Administration, 1981.
Boyle, M. Ross."The Strategic Planning Process-Assessing a Community's Economic Assets, Economic Development Commentary, vol. 7, no. 2, Summer 1983.
Christenson, JA, and Robinson, J.W. Community Development in America Ames,Iowa: Iowa State University Press, 1980.
"Competitive Advantage".National Council of Urban Economic Development. Washington, D.C., July 1984.
Cox, F.M., Erlich, J.L., Rothman, J., and Tropman.J. Strategies of Community Organization. Peacock: Itasca, 111., 1979.
Harmston, Floyd. The Community as an Economic System. Ames, Iowa: lowas State University Press, 1983.
Heilbrun, James. Urban Economics and Public Policy. New York: St. Martin's Press, 1981.
Jacobs, Jane. Cities ami the Wealth of Nations New York: Random House, 1984.
The Economy of Cities New York: Random House, 1969.
The Death and Life of Great American Cities New York: Random House, 1961.
Katzer.J., Cook, K.H., and Crouch, W.W. Evaluating Information. Reading, Mass.: Addison-Wesley, 1982.
Krueckeberg, DA, and Silvers, AL. Urban Planning Analysis: Methods and Models New York: Wiley, 1974.
Martin, Howard, editor. Chamber of Commerce Research Activities Washington D.C.: American Chamber of Commerce Researchers Association, 1975.
‘Matters of Fact", Inc, April 1985.
"Moving Towards Proactivity". A Report on the McManis Association's Third Annual Survey of Chamber of Commerce Economic Development Efforts. Washington, D.C., Feb. 1985.
Schmid, C.F. Handbook ofGraphic Presentation. Tire Ronald Press Company: New York, 1954.


61
Schumpeter, JA The Theory of Economic Development Cambridge: Harvard University Press, 1934.
Simpson, J. "Questions Anyone". ACCRA Newsletter; American Chamber of Commerce Researchers Association, vol. 10, no. 3, Dec.-Jan. 1985-1986.
Weber, Max. TheCity. The Free Press: New York, 1958.


Full Text

PAGE 1

• I •' ECONOMIC INDICATORS-A TOOL FOR ECONOMIC DEYELOPt1ENT BY KAY-BAIN THOMAS STATE UNIVERSITY, 1966 B.S., GEOLOOY, MESA COLLEGE, 1982 A thesis submitted to the Fa::u1ty of the Planning and Community Development Pro;Jrem, CoJJege of DesiQn and Planning of the University of QJ1orUiat Denver tn partial fu1f111ment of the requirements for the deiJ"ee of Masters of Planning and Community Development 1986 -._, ---..2: Date Oue

PAGE 2

This thesis for the Master of Planning and Community Development b;ree by Kay Baln-Thomas has been approved for the of Planning and Community Development by Robert Horn Herbert Smith

PAGE 3

This paper is dedicated to my parents, l.R. and Leatha Bain who insttlled in me D zest for living and who taught that the beat of the dtfferent drum was not out of step with life.

PAGE 4

ACKNOWLEDGEMENTS I would like to express my appreciation to the members of my thesis oommittee: 1. Robert Horn, for chalrlnQ the comm lttee and provldlnQ guidance In the writing of the thesis, for combining the theoretical models of economic development with real world experiences. 2. Daniel SChler, Ph.D., for his amtructlve feedbD for evaluating this thesis, for his sx:eptance of contrary opinions in the field of community development. 3. Herbert Smith, for his know ledJe of the p Janning process and prOEK:tton a::tions. I would like to thank Richard Hsiley and the staff of the BouliEr Chamber of Commerce who provided me w1th the opportunity to develop these indicators. I would also like to express thanks to my sisters, Barbara Bain and Cheryl Kanitz , who offere:f constant encouragement. And finally, to my family, Diclc, Marut{, end Ashley, who tolerated my absences from family life end provided me with emoti01181 support.

PAGE 5

ABSTRACT ECONOMIC INDICATORS-A TOOL FOR ECONOMIC DEVELOPMENT KAY BAI NTHOMAS Economic Indicators are re81ily available at the national and state levels but are more . difficult to obtain at thelocallevel. This.thesis proposes that they_are vital tq a in its economic development efforts and suggests a process to develop an economic indicator system using Boulder as a case stuat. In particular, economic indicators are necessary to the strategic planning process for economic development efforts by enabllng a community to quantify Its assets and liabilities end to monitor changes in the local economy. Using an economic indicator system along with an other tools such as an economic profile, shift-share analysis, and location quotient model a comprehensive picture of the local economy can be obtained. Then intervention actions can be developed which can retain and/or expand existing firms, stimulate the indigenous creation process, or attract new firms to the community. The proposed economic indicators were evaluated on the following criteria -clarity, current information, accuracy, and comprehensiveness. The of comprehensiveness was based on Indicators needed to measure the physical and bullt environment, human resources, financial services, consumer activity and locational pull. Economic indicators can be presented in several forms such as text, tables, graphs, or mapping techniques. Formatting and the presentation of the data is one of the most important aspects of the Indicator system. ENVIRONMENTAL DESIGN AURARIA LIBRARY

PAGE 6

A general planning process was used in developing the economic indicators. It can be developed by either a public or private organization. The BouliEr Chamber of Commerce sponsored the Indicators preser:tted In this paper. Therefore, It Is geared more to the business ' community end economic development efforts of the Chamber. A planning department could also collect the data but it would focus on changes on tax revenue more than a chamber of commerce. The ultimate goal of the economic indicator system is to provide knowledJe to business persons, poltcymakers, and the publtc so that oct1ons, whether they be lnterventlve or within the free enterprise system, wm enable a community to have a stronger, healthier economy.

PAGE 7

TABLE OF CONTENTS Chapter 1 1 ntrOOuct ton Chapter 2 Economic Acttvtttes of Local Economies Chapter 3 Eronomic Development 1 I Chapter 4 16 Chapter 5 . The Process of Developing Economic Indicators 20 Chapter 6 Summery 34 TABLES 1. Summary of Economic Indicators 21 2. Data Sources for Economic Indicators 25 3. Boulder County Sld Wrq:s 38 4. Geographic Distribution of Sales Tax Revenue, 1985 Summary 42 5. GeoJraphtc Distribution of Sales Tax Revenue, Jan. 1986 44 6. Migration of Boulder Business Firms 55 1. Cost of living Index 56 8. Real Estate Transfdlons Summary for 1985 57 9. Boulder County Transaction Acalunt Deposits 58 1 O.Consumer Price Index 58 11. Evaluation of the Boulder Chmnber of Commerce Economic Indicators 32

PAGE 8

CHARTS 1. Distribution of Employment for Colorm, Metro Denver & Boulder County 37 2. Boul(2r City Employment 39 3. Boulder County Emplatment 40 4. Boulder Sales Tax 1985 & 1986 43 5. Boul(2r sales Tax 1984 & 1985 41 6. Gross &lies for Food Stores 45 7. Gross Sales for Eating Pls::es 46 8. eross S81es for aenera1 Merch8nd1se 47 9. Gross Sales for Home Furnishings 48 1 0. Gross Sales for Apparel Stores 49 11. Gross Sales for Automotive Tro 50 12. Gross Sales for Misc. Businesses 51 13. Bou1(2r Accomooat1on Tax Revenue, 1984,1985 & 1986 52 14. Gross Sales for Motel/Hotel Aa:ommattons 53 15. Value of New Construction Permits 54 16. Value of Res100r1t1a1 and Nonres100r1t1a1 Perm1ts 54

PAGE 9

CHAPTER 1 INTRODUCTION Economic Indicators ere essential tools for the economic development effort of a community. They ere essent1al because they provi(E information on business conditions, tax revenue, and employment etc. By uslnQ this information business persons, policy makers, and the pub11c can be proactive and more focused in their res:tive efforts. Trends and relationships cen be easily Identified 8fld problems better defined when chonges end conditions are QUMtified. Economic Indicators are also vital to the strategic planning process in economic development proyems. Assessing til area's economic essets and liabilites is one of the first steps in the strategic planning process. For example, if an economic indicator shows that more firms are leaving Dn aret1 than are being creeted or moving into the area, the economic development oroantzstlon must imnttfy reasons for this outmigrat1on and establish an action plan to alleviate this problem. Economic indicators are then used for monltorlnQ changes that are associated with these efforts. They provide a method for evaluating the effectiveness of the economic development oct ion plan. The process of creetlng these Indicators require delta collection from the city, county, stele, and private sector. This thesis wm examine, explore, develop Sld evaluate which economic indicators ere most useful based on the criteria of comprehensiveness, clarity, accura:.y, and current information. The purpose of the stuct( is to deVelOP economic fndjcotors using Boulder 8S a cose stoot.

PAGE 10

2 Th1s paper 1s the outcome of work 1n1t1ally begun dur1ng a PCD 1nternsh1p wttll the Boul(Er Chamber of Qxnmerce. It is intended that the process also be applicable to public sector agencies such fm planning departments end economic Evelopment agencies in a variety of cities. Locel economic indicators fulfill a need for a common source of data for locelinformation. Economic statistics ere resUly available at the state end natiooallevels but the collection of local statistics is more difficult This is ironic because economic Edivity is a local phenomena and information describing and measuring this Edivity should be easily collected. It is assumed that this process will be epplied in a market setting in which the ultimete ts to tmprove a communtty's economtc health. Wtthtn thts market framework, tnterventton Edion mEt{ take the form of improving infrastructure, stimulating capital markets with lower interest and tax rates, joint efforts by the city and business community in attrEding new industries, and retraining the unemployed and underemployed work force. Redistribution of inaxne is not a gJBl. Economic ind1cators ere defined as meesurements of the local economy that change more th8n once a year. Tte{ differ from en economic profile which describes lono-term conditions and relationships. Therefore, this paper mas not focus on economic development tools suches shift-share, inpuVoutput analysis, the economic base model and the location quotient mmel. Economic indicators ere a reflection of ch8naes in the local economY and these changes ere measured more than once o year. Another constraint of this studf is that it is developed for the economic development organizations with limited time and money resources. The method:JlOI])' is a descriptive epprOII:h based on liter8f.ure review of locel economies,

PAGE 11

3 economic development, 8lld axnmunity development Work moe for the Bouh:Er Ch8mber of Commerce was used as a case stl.Kt(. A rationale was ooveloped to support the need for economic indicators and a matrix was ooveloped for evaluating es:h indicator based on clarity, comprehensiveness, current information and II:CllrfLY. General planning pr0C800res were used in the process of developing indicators. In the chapters that follow I wm first examine the process of local economies (Chapter 2). Then I shall describe the major activites of economic 00\ielopment (Chapter 3). Later I will discuss the need for indicators (Chapter 4) and finally I will examine the process of developing economic indicators (Chapter 5).

PAGE 12

4 CHAPTER 2 ECONOMIC ACTIVITIES OF LOCAL ECONOMIES A necessity in dBYeloping local economic indicators is to understand the local economy. Wh8t are the m8jor force5 driving the economy? The lcatl economy exists within e QEDFaphical framework whether 1t be a small farm Ina community or a metropo11tan area. Economic forces are both (within the community) and exll}mUS (outside forces). An example of an endJgenous force would be a change in policy of the city to limit graNth by granting only a certain number of housing permits. An exo;enous ch8nge would be the femral !JNernment lower Ina the d1scount rate which In turn would lower mortQaae rates. ConseQuently. the number of homes sold CDJld incree. In both these cases the number of deed transfers would fluctuate and the economic indicators would register these chauges. Eronomic indicators must be sensitive to both exterMl and internal economic forces. Schum peter 1 v1ewed economic 11fe as a closed circular flow In which sellers of commodities appear •in as buyers in sufficient measure to acquire those lplE which will maintain their consumption and their productive equipment in the next economic period. He believed that economic s:tivity could h8ve erry motive, even 8 SJ: ritual one, the ultimate purpose Is the of wants ( mncept of ut111tv). Weber 2 defined the city as 8 pla:e where •the market becomes an essential component of the livelihood of the settlers in which the inhabitants live primarily off trade and commerce rather than He p1 oposed the following economic roles for cities: r1arket settlementsThe market forms the economic center where specialization of

PAGE 13

5 prau:ts enable both the non urban and urban populet1on to exchange their wants and needs for articles of trade and commerce. Consu•ar city-Economic opportunity is influenced by buying habits of mnsumers spending their incomes. These consumEn can be either inMbitants of the city or from other 8re8S. Producer city-Cities s;t as suppliers to outsili:l areas. This type has a high concentration of fs:tories and manufs:turers. Co1nmerctal cityThese ctt1es are financial centers where b6nlcs, brokerages and other flnanctallnstltutlons locate. Weber further claimed that one city Is not a pure form but a combination of all types. Heilbruin 3 states that cities are open economies because they oo not pr00uc8 all that they coosume nor consume all that they prOOuce. Therefore, trade is essential. Cities export their to other regions. These export Industries are the basic industries of a city and become the economic drfvino force of the local economy. Proceeds from these basic activities pay and services that are not prOOuced locally (imports). City ecouomies are shaped by outside forces suches the demand for locally manufrclured l}lOds and the supply of imported services. Heilbrun further states that the Internal economic structure of a ctty Is influenced by the factors of production-land, labor, capital tJld entrepreneurship. These Internal and external forces affect both the basic economic ectivit1es for outside consumption) and the non basic economic forces ( l}lOds and services prcDJced and consumed

PAGE 14

6 locally). Another tmportmt economic foctor proposed by He11brun Is This Is the movement of (JXXis SKI communications between firms and business persons. It is the locatfonal pull of one firm on another. For example, ocetionel economies are a clustering of firms of the smne industry and urbanizetion economies ere the ettrectlon of firms from different Industries. A city economy can h8ve both. Heilbrun notes that economic ecttvtty tends to concentrate QBOITaphicaiJy because transportation rost and/ or pmtuction rosts are reduced by the prooess of B!mlomeration. Economic ectivities thet ere dependent on meteriels or merkets will locate where trensportetion costs are minimized. Eronomlc octlvltles In which labor, enerw. or amenities are key fectors wm locate where prmuction costs are minimized. Harmston 1 views economic ectivity es developing within a geographical gramework which is influenced by neturel re50Urces, physical oonfiguretion end technological conditions. Housel'x:llds, stores, fm:torles and units are microunlts of the community economic system. A system of exchange results when IKh microunit prcduces more of certain products or services then it mnsumes and it consumes more of other and services than it prmuces. These petterns of pnxiuctlon and consumption chenge over time. Change end instebntty are Inherent In the system. Community s:onomlc systems are complex trading economies that offer a dtstinm economic advantage. Jane Jacobs argues tn CititJSand/118 W881thofNalitKIS that not alJ cities have the same economic forces. She defines city region to those lerge arees where innovation and

PAGE 15

7 are the dominant economic force. These two forces m-e lacking in other reg1ons. She cl8SS1ftes reg1ons as ctty reg1ons, supply reg1ons, ab8nOOned and clearance reQ1ons with stagnating and declining cities tn the later artegries. Five economic foreces are relead when import-replm:ing becomes explosive in city regions: 5 t. Enlarged city markets for new and different imports. 2. Abrupt Increase tn number and k tnds of Jobs 3. Increase transplants of city work tnto non urban 10C8tions. 4. New uses for tschnolo;Jt. 5. Growth of city capital. She further states that prOOuctlve c1tles create a balanced mixed economy In their own area and shape stunted and unbalance emnomies tn regions that oo not have productive cities. By ermnpasslng the previous mentioned theories on city economies the major economic m:ttvlttes of communities are: 1. Hum• ResourcesPeople ere the most baste unit of my community's ecouomy. The number of workers, their occupations end type of irdJstry is critical fn analyzing a local ecouomy. Changes in the labor force Is one of the most baste elements of an economic indicator system. Economic development efforts ere usuelly towards Improving the human resource element of the community. There 8f8 many aspects of humll"t resources that are difficult too QU81ltffy such as motivation and innovatloo. Surveys used in ecouomic profiles could uress these issues.

PAGE 16

8 2. Physical and Bunt EnvironmentThe econom1c value and use of land and real estate on that land is an important economic a::tivity in a community. Generally, a healthy real estate market is indicative of a healthy economy. Factors such as the number illd market value of real estate transactions, number of units on the mDrket ver5US those sold, VaalltY rates DOd an1nventory of land uses (commerc1al, 1ndustr1al, and res1dent1a1) are 1mportant 1n focusing on land as an economic an:epl In rural communities, the B(J'icultural use of lllld should be emphasized. This could include acreage under cultivation illd crops produced. In natural resource Dreas indicators should reflect the market price of the mineral and tonnage or b8rrels m1ned. 3. Financial ServicesThere are three main financial areas-consumer. real estate, and commercial, industrial illd BrFicultural. The flow of investment funds is facilitated by investment banks, capital venture funds, money center banks, and the federal, state, or local pernment Investment cap1tal1s difficult to trm:k and therefore d1ff1cult to 1nclum in an economic indicator system. Cepital for large real estate loans usually originate outside communities. For smaller scale projects, the local commercial bank, thrifts illd local pernment with bonds such as irdlstrial revenue bonds are the major source of funds. Thrifts and commerc1al banks are ma1n sources of CXJnSUmer loans. Bank and thrift deposits are most easily to mllect of all these financial service a::tivities.

PAGE 17

9 4. Consumer forces-Aflllomeration of economic behavtcr which tnclude tndtviduals, mmpanfes • or !J)Vet"nmental units is an importslt element in the of the local economy. Retail sales are !J]Od indicators for consumer s:tivity in local axnmunities. Tourism is a major ecouomic s:tfvity im many Coloraoo communities. It brings outsiE money into the local ecouomy and sttmulates retatl sales and servtce sector jobs such as skt 11ft operators, retail clerks, restaurant personnel, and hotel/motel personnel. The service sector is the fastest inrustrial sector in the U.S. and it is driven by consumer forces. 5. Locat1ona1 PullThe drawing power of economy is affected by the communtty's locattonal sivantsJes. Locattonal pull can be based on transportatton, geaJ'aphy or the between irdlstries (both similar and diverse industries). The locational pull of a community measures the vitality of the local economy. 6. Economic g1ob111zat1on-Local economies are no longer self-sufficient and immune to the vtctssltucE5 of the world economy. TOO!ry' compet1t1on is a world-wide phenomena. I!Wstries such as hi!iJ tech, automotive, petroleum, tourism, and are greatly influenced by the world economy. Several Boulder County high tech firms have relocated the menufcduring end assembling operations offshore. As hi!jl tech workers lost jobs. There has been a shift fn labor intensive industries to locate in areas with lower wage rates. The labor markets of the Pacific Rim have been beneficiaries at the expense of the U.S. labor merkel Amerfcen farmers no longer have the competitive of producing crops in the

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10 world mtrkel must compete with the lower prices of the emerging third world countries. The strength of the Amertcan oonar dtrectly affects the balance of tro When tt ts strong, foreign investors are less likely to purchase American mo !JXxis or travel in the U.S. When the oollar is weakened, purchases and tourism increase. Communities must be able to mticipate, recognize 8l1d t8ke 5Nant6ge of glob81 changes. Further research is needed in this area of developing economic indicators that are sensitive to global changes. Presently, these indicators are limited in the !V'icultural areas. The type and amount of a local area's imports and exports should be important elements of an economic profile if unavailable for Cll economic indicator system. The professton of economtc development analyzes these major economtc acttvttes and takes interventive fl:tion to bring about purposive change to improve the local ecooomy.

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CHAPTER 3 ECONOMIC DEVELOPMENT Economic development lles wlth the framework of community development It is an Intervention process that brings about social change w1thln a community. Chr1stenson and Robinson def1ne communfty as 6 A !J'OUP of people in a community reiEhing a decision to intiate a social a:tion process (planned intervention) to change their economic, sreial, cultural or environmental situation. Economic development is a subclassification of commun1ty development It Is an 1ntervent1on process that focuses on the local ecouomy. Intervention occurs as efforts to expand or improve exfsting businesses, attrEding new firms, and/or st1mulating the creation of new firms. Economic development is a vital !TOWing profession. For many years the desire to Improve the econom1c health of a ammun1ty has been a un1t1ng force for commun1ty development Withfn the last 1 0 years there h8S been a renewed focus on economic Competition between communities has become keen. Cities and states are contributing more money to economic s:tiv1ties. Economic improvement is the ultimate pl of these efforts. There are three major strateQ1es of economfc d3velopment efforts. First. retention and expansion of existing firms and businesses is a key activity . These efforts can include improving the infrastructure, offering technical and financial eisttn:e,cmrdinating training pro;rams, aiding In t8x abatement, Improving the dlaiCJ;JUe between I})Yernment, indUstry, and

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12 Em8nia, s=ting as omsbudsmm for business interest and reaJJilizing the outstanding cmtributions of the business community. 1 Existing businesses are the core ot the local ecouomy. When UMrt contract or leave, the ripple effect takes hold and the entire local structure is weakened. Also, an unhealthy and untmppy existing business community all act as a detriment to attracting new Industries. The second type of economic stratew is the creation of new firms. Research indicates that 901 8 of new jobs created come from new compmy start-ups and expansion of existing businesses. New firms and entrepreneurs usually come from D successful large f1rm or university setting. This spin-off effect Is quite perveslve In the high tech centers in the U.S. i.e .• Sillcm Valley. Route 128. Bouh2r. Researth Trianale, and Austin. Economic development efforts used to stimulate indigenous business creations include improving II:CeSS to cap1tel venture companies and commerctel banks, mntributing to techno10!1( trDOSferr by lncreestng communtcatlon betweeen major corporations, research centers end the entrepreneurs, enmureg1ng networking between technical end professional services, providing or supporting training programs, recognizing local entrepreneurs, developing industrial incub8tors, end providing technical assistance such as guidln:e in preperlng mDrket plans, Inventory plmnlng end mntrectlng with suppliers. The third cate;JrY of economic development stratew is attracting new ftrms to the aree. This stret8qt recatves the most publicity but only 8COJUnts for 101 of the new jobs. Targeting Is an important concept in DttrDCtion strategies. Communities identify D limited number of Industries by matching the community locatlonal attributes w1th the needs or a particular type

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13 of industry. Firms that are most likely to relocate tre those that have experienced high growth rates. H1Qh (J'owth firms can be found 1n many 1ocat1oos, sectors and 1rd.lstr1es. In 1979, David Birch 9 reported that smaH businesses had generated almost 2/3 of the new jobs in the economy. In the pest decade, the Fortune 500 companies heve not in 81EI'egete 8liEd 8 single new Job to the U.S. ecouomy. I 0 Most of the new Jobs come from newer companies. Another important consideration when planning for business attrs;tton efforts is that there has been a structural shift in the American economy from the manufs;turing to the service sectors. Currently, 751 of the American workforce is empla(ed in sevice sectors. II It has been estimated that by the year 2000 these sectors wtll encompass 901 of the workforce. This (J'owth will be related to information processing, telecommunications, food and food service industries, convention/lat;Jing sectors and the OJit-yourself market. The three major economic development strategiesretention and expansion of existing firms, creation of new Indigenous firms, and business attroctton efforts are part of the long term process of bringinQ about economic chanQes to the local economy. M. Ross Boyle 12 has SUCJ.18Sted an economic development strategic plannning process. A review of these steps reveal a basic consequential logic to the process. M()(2Js based on similar logic but cont8ining 8 or Jesser number of specifJc steps are equally valid. The seven steps are: 1. AssessinQ an 8fe8's ecoronic assets and liabilities-economic audit. 2. Selecting targat industry groups. 3. Setting economic development pls. 4. lmntttylng barriers to business Investment.

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14 5. Preparing an plan. 6. Implementing the plan. 7. Reviewing and adjusting the plan. Eronomic indicators are needed to quantifiebly identify problems and adjust and evaluate the perfl:l'mance of an plan. Therefore, they are cr1Ucal to the first and seventh stiJje of the strategic planning process. Eoonomic indicators aided Boulder in identifying and monitoring changes in the economy. Boulder County experienced m8SSive layoffs beginningin the fell of 1984 end culminating in Jan. of 1985 (Chart 3). A m8jor segment of this layoff was attributed to problems of StoriJje Tech. However. some of the unemployed workers were from firms th8t had moved out of Boulder. Some of these firms cited the reason th8t the cost-of-living was too high in Boulder (Chert 7). As e result of these layoffs, the reel estate market became glutted. Outmigretion was greeter than lnmlgratioo of the population. The number of reel estate (Eed transfers Ecreesed significantly In 1985 ( Teble8). New amtruction OOclfned by 48.61 (Chart 15 and 16). Gross sales were net for 1985 (Cherts 6-12). These economic indicators demonstrated to the Chamber of Commerce th8t intervention action to Improve the local ecouomy was mslreeble. The ctanber respcJd!d by making economic owatopment 1ts number one priority. An economic IEvelopment counc11 was creeted end an action plan acbpted. The action plan amistad of several pnJITams-Red Flag, Entrepreneur of the Yetr Awtrd, Smell Business Institute, end A New leader in the Ra:lcies (attracting new businesses). The Red Flag pnJITem Is e plM to stop the of firms In Boulder.

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15 Compenies are rontfded by the Chamber if the( are seriously consi!Ering leaving Boulder. Reasons for their dissatisfectioo are identified and alternative solutions sought The Small Business Institute has been created to help existing and newly formed small businesses by offering classes, and seminars and services of e Smell Business L ibrcry. The Entrepreneur of the Year Award is an effort to give rommunity reaJJlit1on to the BouliEr entrepreneurial environment A New Lmr in the Rockies is a prfll"am for attrecting new businesses. A part of this program is the targeted industry stOO{ . This is a oonsensus building process which examines a axnmunity's strength and weaknesses (transportation, labor. infrastructure, quality ft ltfe and education) and matches these with desireable tndustrtes. The ltst of targeted irWstrtes is then given to the comm1ttee that a plan to contact firms within these 1rWstries. A marketing mmmittse develops a prD!J'am for ID/ertising and promoting Boulder. The end result of ell these efforts is to improve the unemplu,-ment problem. It is hoped thtlt the trickle mwn effect will take hold and improved economtc health wm permeate tnto the banking, real estate, and retail sales areas. As a ronsequence, the tax base of BouliEr will improve. In the example above, economic indicators were used to identify and quantify problems. In the months to follow. changes in these indiarurs may be asso:iated with the effectiveness of the economic (Evelopment prOIT8fll of the Boulmr Chamber of Commerce.

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CHAPTER 4 THE NEED FOR ECONOMIC INDICATORS Tile most reason for Eveloptng economtc tndtcators ts that they provtde an economic picture of the community. They assist in ic:Entifylng problem arem and arem of opportunity for new business ventures. Emnomic indicators enable a community to be prca:tive and focused in its re.:tive economic development efforts. A local business person can use these indicators tn analyz1ng their business operation. For example, a restaurant owner notices a decline in his Nov. revenues. By using information from Chart 7 she/he can observe that sales for restaurants in the entire ctty was off in Nov. The restaurant owner can also use Chart 7 for determining his market share of the total restaurfl'lt business in Boulder. Dlert 7 muld also be utilized by persons interested in opening a new restaurant in Boulder. Information from this chart oould be used for revenue projections. The chart also shows the monthly and seesonal chmges. Opening a new restMJrant at the end of spring might be more fe8Sible than during the fa11 when the market becomes weaker. This would be a more proactive . More commonly, economic actions are reactive in nature. Since economic indicators are a measure of change, they em help narrow and focus reactive alternatives. First, they m8"( be able to geQTaphically or structurally pinpoint a problem area Sales tax revenue are oown

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17 (Table 4) in a certain area of the city such as the East Downtown area. Upon further examination it is found that stores in that area h8ve elimited amount of parking end that traffic rongestion make 1t undesireable fer the shopper. A cmrd1nated effcrt between the shop owners and the city transportatioo Epartment could alleviate the traffic problem and consequently sale proceeds and the tax revenue could increase. By analyzing changes in the amount of sales and tax proceeds a oost benefit analysis could be developed to demonstrate the oost of changing the parking/traffic pattern. In this case, the economic indicators are used to problems and also used in a technical analysis stilt(. Ultimately. the city and shop owners would benefit Another Wflf that ecouomic indicators help narrow res:tive efforts is that most are a meesure of magnitude and direction. As a result, the business person/policy maker can modify hfs s:ttons taord1ngly. A small change fn the consumer price index (Table 1 0) may just rQJire an of that change whereas a large jump in the inflation ffl:tor may require a decision to build up of supplies. A third fector th8t Mrrows reective alternetives is that trends can be easity Identified. The business person/policy maker can moolty his beh8VIcr by assuming the trend wm continue or th8t there will be a change. A homebuHder has observed an increasing number of new home permits granted by the city (Chart and Tabla 16). As a consequence, he may modify his constructions plans bec8use he be1ieves tha market has peeked. Emnomic Indicators serve two baste roles. As an tnfor11atlan provider they can

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18 aid a community's self-help apprca:h as a fact-gathering mechanism. Rothman's 13 mooal of locality development would be 8n example of this enebler-artolyst role. Secondly, economic 1nd1C8tors can be used In technical assistance.. This social plann1ng eppr0Ed11nvolves the technical process of problem solving by ratione! controlled change (purposive). In other words, indicators can be used as input to technica181l81yses such as mst benefit studies( as in the previous mentiooed traffic and parking problem example), correlation studies, and regression mroels. In conclusion, economic indicators are important to the mmmunity's economic development efforts because: 1. They identify lmportemt changing elements of the economy. Strengths end weeknesses of the local economy can be determined. 2. Thev enable one to monitor these ch8nQes and terQet significant problem areas or opportunities. 3. They enDble one to act proactively and in e more focused reactive manner. 4. Assocatloos and relationships can be Identified. 5. Purposive ch8nQe can occur throtQ'l the provision of information used in a self-help or technicalessistantce mal. 6. They provide e •snepshot picture • of the environment. An economic Indicator Is an essential tool for economic development efforts. But '

PAGE 27

19 they must be used with other tools such as economic profiles, shift-share analysis, and economic bme nslysis to provide a comprehensive picture of the local economy. They m tmve several 11m1tat1ons. Ceusal relat1ons can not be determ1ned by just us1ng 1nd1cators. other stat1st1cal mettxxls must be used. lndicabrs ere IEscriptive end therefore m not take into ronsideret1on such factors as reasons for a &:line in the sales tax revenue. Often valuable data such as income, exports end imports ere published once a year. An economic profile is a more effective mechan1sm than economic indicators for d1ssem1nat1ng th1s 1nformat1on. Eronom1c 1nd1cators must be used in conjunction with other economic development tools for a balanced apprOIEh of providing information on the lcx:al economy.

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CHAPTER 5 THE PROCESS OF DEVELOPING ECONOHIC INDICATORS This chapter wm focus on the procewres for 1nd1cators. The process for the Boulder Chamber of Commerce will be used as e case stlD(. The inlt181 step in establishing economic indicators is the formulation of pls and guii:Elines. For Boulder the general pl was to provide 8 romprehensive description of the current business conditions. Thts pl was then further reftned by guidelines. The efforts of data collection and updattng would not be ell consuming due to limited time end money resources. Secoudary data would be the primary source of information. The indicators would be geared toward the business person, those currently in business tll'ld potenti81 members of the business rommunity. The time fr81Tle of report1ng would be one qurterly basts to the members of the Boulder Chamber of Commerce. After establishing these pls end guid3lines 8 survey of other chembers of ammerce indicators was rompleted. Table 1 summarizes these findings. Most of these indicators were 1 p8Qe summ8ries. The Orta were presented either in text or table for matt tll'ld it was difficult to trends. Transportation, end construct ton s=ttvtty were most fr8(JJ8ntly used. The information was most commonly presented in wegate form. It was d3termined that information should be diS8J.If'8Jitsd whenever possible. From this inventory other areas of improvement were identified-a need for 8 more comprehensive picture of the local economy 8nd en increase use of cherts end to visually aonstrate trends.

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TABLE 1 sti11ARV OF Eal011: CJmAHIZATDt CO.STROCTDt SALES TAX WHREJI:E/ BNI( Et"FUl'w'KHT Per' TELEPKH AR SERYlCE RETAL co.stKR MISC. REYOU To.RISM DEPOSITS ft IR>WT SALES PRt::E H>EX. 1-Dl<\F ------------------------------I DENYER CHN-&R X X OFCO"MRCE X tmn. YN:.NCY X X X X MISSOI.A I HT )( X YOOD PROOOCTS CHN'&ROF II) U.S. FH:ST ai"KRCE SE:RYlC1 ftll.l: SODI.S I 1M) JllSPITAL PA YRt:I.L 1M> Er"FLOVKHT CASPER CHN'IIER X X X POSTAL OF COt1"ERCE RECEPTS IDNIJ FALLS X X X CHN'&ROF C01"DCE BLLN;S1HT CHN'IIERlY )( X X X fE'-' BUS tSSES NJ.PRas PARK CITY CHN'IIEROF co-HRCE X X T ALLES I TllRISM WACT FROM Tt CHAI1JER

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• 22 The next step in the process was to identify which parMleters to use. By using concepts previously d1scussed tn chapters 2 end 3 and 1nterv1ew1ng bus1rleSS persoos a skelletat framework of the economy was Evised. There are four major anchors tn the Boulder economy-ColorEKb University, the federal laboratories, the nucleus of hiljl technolo;r( firms, and the nonbasic firms that provide services and trooa to the area. The proximity to the Denver metro area and Stapleton International airport Dis a fifth dimension to the economy. The federal laboratoriesNational Bureau of Stalldaltls, Environomental Reseerch Laboratories (NOAA), National Center of Atmospheric ch, DOd the TelecommuniCDt1ons Institute DOd the University are centers for reseal 'Chand development. As a result of their preset ICe IBM, Ball,and Beech Aircraft have been to Boulder. Furthermore, these larQB firms h8ve stimulated the indigenous creation of many smaJJ hiljl tech firms. The city of Boulder is home to 361 of the state's software firms, 231 of the state's biotechnolor;w firms, 151 for computers and 151 for mlcrulectroolc firms. 14 The service sector, retail and wholesale trooa, finance, lnsurens:e, 800 reel estate are a support 800 network system for the Boulder economy. The srnerQfstic relationship that exist between the research centers and business is an important example of the lOCDtionel puJJ phenomeno that was previously discussed. Parameters have been developed to measure E8:h of the 6 major economic fdlvtttes In a

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23 looal economy-human resources, the physical and built environment, financial services, loonional pull, mnsumer forces, and globalization. Human Resource can be measured by the number of workers 1n the labor force, employed and unemployed. Th8 number of workers in !Btl i1111tstrial classification and avera(J! wages can be obtained at the county level but is more difficult to get at the city level. (kcupational informatim is important but many times this information Iiles not change yearly. (It would be important information for an econom1c prof11e but not for an 1ndicator system. ) It is important when disseminating lreallabor information to also give regional and national statistics. This enables the r811isr to compare the looal statistics with the rest of the country. Physical and the built environment porameters would focus on the real estate market and natural resources. Examples would 1nclude real estate tranm1ons, Vff'Ct/ rates for office and apartments,and new building permits issued by the city. The amount of minerals mined, barrels of oil produced, amount of crops produced, and acreage under cultivation would be measures of the economic activity of the physical environment Financial servtce parameters would measure the flow of money. Bank 03pos1ts, industrial revenue bonds, and capital venture s:t.ivities would be indicative of this s::tivity. Locattonal pull can be measured by a list of in-mi!J'ation and out-mi!J'&tion of firms. The expansion and indigenous creation process are also elements of the locational pull. The mst-of-11ving inmx 1s an excellent to Bnonstrate the geographical

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23 of living in the local area. The incngenous creation process of new firms are the most mfficult to obtain at the local level. However. new listing of business telephones, or the number of new tncorporatioos muld be used. Consu•er forces are the most easily obtained parameters. These could include such measures es seles revenue, seles tax revenue end gross seles from accomodation taxes (measure of tourism )and motel/hotel occupancy rates, end number of overnight visitors. The effect of econo111c globaUzaUon is another difficult parameter to measure for the local area. Emnomic glob81ization effects the lcxal economy end further research is needed to improve these parameterS: A list of firms moving operations offshore end the number of jobs lost would be a valuable source of information. As was previously mentioned, world mnsumer axnmodtty prices on agricultural 8l1d minerals could be used . At thts ttme there ere few indicators for the economic glob81ization catelpy. Once the parameters tate been identified, the next step is to locate the data sources and determine the reporting time frame. Secoudary data from the city, munty, and state are the prtmary sources of tnformatton. The ctty rollects tnformatton on gross retan sales, sales tax revenue, m:comooation sales and taxes, n:l new construction builmng permits. The munty is another source of information. The oounty assessors office, munty clerk and pub lie trustee gather and analyze information dee ling with real estate transactions, indJstrial reYenue bonds, and foreclosures. The state gathers informat1on on employment, wages, and incorporations.

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24 Table 2 summari2BS the inventory of data sources. The federal pernment also collects useful economic statistics such os personal income Dnd the consumer price index. other sources of 1nformat1on come from organ1Z8t1ons such as chambers of commmerce, reg1onal councns of pernments, reel estate companies, board of realtors, and private consulting firms. The next phase of establishing economic indicators is the actual collection and systemization of the information. At this point a computer and a database software ps:kage are valuable tools. If this resource 1s U118Y81lable a notebook(s) with a section for each indicator is an alterl18tive. Each worksheet should have the conts:t person, agenc.y, phone number and date the information is avallable. It IDes simplify the procedure if information can be Blt to the researcher, otherwise, e phone call will :suffice. Each worksheet should contain the raw data and ell the riEBEd calculations. Information can be given as raw data or a time series stOO( wh1ch shows the change of the same parameter over time. This is useful for truing trends. A cross-sectional stOO( is a stOO( conducted only at one point in time. It is a snapshot picture of meny subjects. An example is the cost-of-living stOO( that provides en average Index for many categries such as housing, transportation, and ut111t1es for over 200 clUes in the U.S for a specific time period (Table 7). It can not be used as a time series because the 200 cities that make up the stlltt change from one quarter to the next There ere two basic rules to follow in the collection process. Systemize anything repetitious and simplify that information which can not be systemized.

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PAGE 25 TABLE 2 DATA SOURCES FOR ECONOt11C INDICATORS PHYSICAL AND BUILT ENVIRONMENT REAL ESWE TBANSA&IIQNS County Asses5ors Office Board of Realtors HOUSES ON THE MARKET VS. SOLD Board of Realtors FORECLOSURES County Pub11c Trustee VACANCY RATES Commerctal Realtors Apartment As!:a,. Prtvate Consulting Gps. CONSTRUCTION ACTIVITY Ctty Bu11d1ng Dept FINANCIAL SERVICES BANK DEPOSITS feOM-al Reserve Bank University Business Centers VENTURE Q\PITAL Private Consulting Gps. INPUSTRIAL REVENUE BONDS County Commissioners LOCATIONAL PULL LIST Of IN-OUT MIORATION fiRMS Newspaper Chamber of Commerce COST -Qf-LIVINGINDEX Chamber of Commerce BUSINESS STARTUPS/fAILURE Colora Office of Secretary of St8te New business phone listings New bust ness ut111ty hookups HUMAN RESOURCES COUNTY WAGE AND &.LARY EMPLOY. ColorfKb Division of Emp1(1flllent IJld Tra1n1ng COUNTY LABOR FORCE I EMPLOYED ColorfKb Division of Employment and Training UNEMPLOYMENT RATE ColoriDJ Dtvtston of Employment and Training CITY EMPLOYMENT Colorstl Division of Emp1(1flllent and Tra1n111Q CONSUMER ACTIVITY SH..ES TAX REVENUE City Sales Tax Office eROSS RETAIL &.LES City Sales Tax Office ACCQMODATION TAX City Sales Tax Office CONSUMER PRICE INDEX Colorstl Division of Emp. and Tra1n1ng EffECTIVE BUYING INCOME .s4LESANO 11ARKETINO /1ANAOE/1ENT SUIIYEY OF BIJYINO POWER

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26 The next step in the indicator process is the s:tual formatting and presentation Of data This is one of the most 1m portent ospect of the indiartor system. To have an impect on the business commun1ty, po11cymakers and the pub11c numbers must be effectively communicated. It Is not only the of the numbers but also numbers are displayed that influence interpretation. There are four common methOOs of information transfer: 18 1) Textual or verbal 2) Tabular 3) Graphino techniQUes 4) Mapping technique The textual/verbal technique is the stmpliest end most direct. It is most effective when comparing just a few statistics. A statistical table Is useful for comparison of many numbers. Numbers ere listed in some ormrly fashion in which patterns, similarities, end differences can be easily observed. Graphing techniques facnttate the communication of trends and nonspetial relationships. The graphs enable the user to quickly grasp the main Idea. Tte( attract and hold the user's attention. The most common types of are column, bar, line, pie, area and scatter. Each expresses a relationship between two variables using the cartesian coordinate system. The column chart is used to show veriation in the value of an item at equal time intervals. Variations of several Items can be lEinonstrated by plotting the value of each on the seme chert

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27 by either stacking the columns on top of each other or by placing side by side. When multiple columns are used the spacing between the the amount of over18p and the order of plotting 1nfluence the effect1vemess of the chert A bar chart looks lUte a hor1zonte1 column chert It comperes different items at a specific point in time. It can also be stacked or overlapped. The advantage of a line graph is that it can show the trends end relationship of a large amount of numbers. The. fluctuation of the line indicates a variation in the trend. The distance of the line from the hor1zonta1 ex1s at f!n1! g1ven po1nt 1nd1cates a quent1ty. Relet1onsh1ps can be observed by plotting several lines on the same graph. P1e charts ere used to compere relative proportions of parts that make up a whole. The pie represents the totality while the size of each piece shows its share. How es:h piece is arranged is important in the comparison of ell sectors as well as the whole. Area charts ere me by creat1ng bands by staHng 1n areas between lines. The thickness of the bend at my one point indicates its value. Bends can be stacked on top of each other. The distance from the horizontal axis to the top of the bands show the sum of all the bands. The scatter chart is used to indicate the relationship between two vari6ble by plott1ng po1nts. Po1nts wh1ch ere scattered renmmly weak essoc1et1on. Po1nts wh1ch ere errenQed in a linear pattern show a stronger association. The forth mettm of information transfer is mapping techniques. Maps communicate spmial emphasizing distance, direction and areal patterns. like graphs tre( are usually more eppeelfng than text and tables. The( requ1re more time, effort and expert1se 1n

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28 creating them. The time frame of publication is MlOther critical factor. For this study, indicators have been defined as those parameters which are measunli more than once a year. Therefore, pubHcatton could ranQe from daily to twice a year. The more comprehensive indicators wtll require a longer time perioo between publications in onBto allow Ulquate time for collection 8nd 808Jysis. A quarterly publication offers the advantr.Je of providing current information and allowing adequate time for collection end analysis. RIBErship Is determlnlned by who receives copies of the indicators. Many times this is OOile through the membership of the oraanizetion publishing the economic indicators. It Is critical that the information in the indicators be usefu1to the ultimate reeder. The final stage of developing economic Indicators Is the constant evaluation and review of the economic indicators and the system which attempt to measure. During the first year of publication it is important to get feedback from the users and researchers in the community. In Boulder, the City BudJet Director, the City Director of Resmrch Dnd Eve1U8tion, C.U. Business Rese8l ch Center Director ,and the Directory of the Private Industry Program and the Executive Director of the Chamber of Commerce reviewed the proposed economic indicators. In evaluating the economic indicators the following points should be considered: Calaprehenstve-Do they reflect the major economic ect.ivities of the local economy? In ree11ty. th1s effort ta.vards a comprehensive picture must be tempered with the time and morley'

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29 resource capability of the organization. The major catap'ies of land, labor. capital. consumer activity. locational pull 5hould etdl have Dn indicator. Current-Is the most up-to-date 1nformat1on used? Frequently ,there can be a lag per1ocl of serveral months in many of the state level Therefore. the most current information will be a measure of several months past. Consistent updating of information is an important element in the economic indicator process. Often criticallkisions are based on the most current ecouom1c 1nformat1on available. Accurate-Are the sources reliable and the data points If secondary data is given • it is important for the researcher to know how the information was collected and the limitetions of the data. Clear-Are the fs:ts and figures presented effect1vely? Appropriate methocls of transferrinQ data must be used-text, tables, craphs, or maps. Trends and relationships must be easily communicated. Using the above criteria, economic indicators (located in the Appendix) developed for the Boulder Chamber of Commerce were evaluated. Table 11 summarizes these f1nd1ngs. Comprehensive-All the m8jor catEQries are represented except economic alob81izat1on. There are Edequate measures of consumer activity, human resources, financial services, and the physical and bunt environment. The indicators could include more information on V8C8fltY rates, occupancy rates, and new business incorporat1ons.

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30 Current-The most current information has been used. However, some indicators have months lag between collection and reporting. AccurateThe secondary dat8 are from reliable sources. ClearThe use of the many IJ'8Phs effectively communicate the trends and relationships of a large amount of data The tables below the graphs enable the user to obtain more detailed information. From these economic indicators a picture of the local economy can be given. Boulder County's employment is unique when comperino it to the state and the metro area The manufacturing sector is by far the most cbninant sector (Chart 1 ). Wholesale trade and tranportetion end utilities are sectors not represented es strongly in comparison to the metro area end the state. Table 3 shows that the workers In the federal government have the highest evereae wages while the retail tr8fe area has the lowest. There ere more service companies in Boulder County then 81ft1 other type. Unemployment for the City of Boulder is increasing (Chert 2} There were more people working in Dec. and Dec. 1965. Chart 3 shows the change of unemployment for the county. Boulder sales tax revenue are up 3.31 from lest Jan. But ell cetelp'ies except fwf stores, transportation and utilities end the other cetepy show a decline tn revenues. There are many geogt aphical areas that are showing major deCI eases in 1966 revenues (Table 5). eross reteil seles are flDt for the city. New construction activity is very soft. The value of new construct1on wes off in

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31 1985 {Chart 15 & 16). More firms are moving out of Boulder than migrating in {Table 6). Boulder has one of the highest cost-of-living in the entire state. Housing is significantly higher than other Colormt commun1t1es. The real estate market rema1ns soft The conoom1n1um market remains weak {Table 8). Bank deposits ere up 31 from last year {Table 9). Table 10 shows that inflet1on is up 3. 91 for the Denver area. 1n mnclusion, these indicators show a very sluggish local economy where unemployment is a major problem.

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32 TABLE 11 EVALUATION OF THE BOULDER CHAttBER OF COt111ERCE ECONOMIC INDICATORS CURRENT ACCURATE CLEAR USE Chart 1 low htgh htgh Shows the 1 Yf!ll!l' 151 time reliable source uniqueness of Boulder CountyMDnufacturing is the cbn inant sect. Table 3 low high med. Time series for 1 yesr 151 time reliable source Units may be wage and emp. confusing. Chart2 low high Compares Boulrer 2 mooths 151 This informatioo Easy to observe employment from is derived from the the yearly 1 yeer to the next. county data ustna a proportional method. Chart3 htgh htgh htgh lVI fi:CI.Jrate 2 mooths 151 reliable source Fluctuations and picture of unemp. trends ere easily is critical to !J'asped. econ. lEv. efforts. Chart 4&5 htgh htgh htgh General bustness 2 mooths lag reliable source The bar !J'aphs climate googe. effectively axn-Used in the public muntcates the sector for trend Yf!ll!l'ly differences analysis. Table4&5 high high medium Denotes geogreph. 2 months lag reliable source Locatioo of geo-strength and IJ'aphtcalerem weakness. Used somewhat mnfor locationel fusing. decisions.

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33 Current Accurate Clarity Use Cherts 6-13 high high high trend analysis & 2 months lag reliable source Trends end market share seasonal fluctuates Chart 13 & 14high high high Tourism Easy to grasp compar1sons. Chert 15 & 16hiQh high high Trend analysis Table 6 high med. med. Identification of More f1rms may The terms out-problem area. leave than are and in-migration listed. may be mnfusing. Table 7 medium high medium Shows com para1 QUarter lag reliable source Averf!JI!:S may be tive EKivantage of ID'Ifusing. one city from another. T8ble 8 high high medium Indicator of the Information can reliable source The term real of the rea 1 estate be obta1ned ar1Yt1me. estate transact 1on market is unclear. Table 9 low high medium Measures the flow 2 quarter lag TrEilSdion m:ct. of more{. oot common 1y understood. Table 10 h1!11 h1!11 h1!11 Measure of 2 months lag inflation and cost-of-livina.

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CHAPTER 6 SUMMARY Economic indicators are measures of the local economy that change more than once annuelly. They re essential tools for economic efforts. They cen be used with other economic development tools such as economic profiles, shift-share analysts, 8l'ld economic bese enaJysis to provide a comprehensive picture of the local economy. They ere a vital part of the strategic planning process of economic development pN)J'ams. Economic indicators identify and quantify problem reas. They can be used in assessing the economic strength and weakness of a community. They can also be used to monitor of economic development pro;Jrams by measurinQ the chanQes in the local economy. The end result will be a community that a:ts proactively and in a mc;n focused reactive effort. Emnomic indicators can also be used by the business community by providing information used in making business decisions such as prOOuctton end locattonal decisions. Information on trends In tex revenues can also be uttllzed by the pub He sector. The economic indicators developed for the Bouhmr Chamber of Commerce adequately fulfilled the crtterta of fD:llracy, current Information, and chrtty. It Is recommended that Information on off1ce Vfi:JB:t/ rates, hotel/moteloccupency retes end measurements of economic glob811zet1on be tOB:I to give a more comprehensive picture of the economy. Public sector agencies such as planning 00p8rtments end economic development agencies con alSJ collect and publish indicators. Their indicators differ than those collected by the 34

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Chamber by mncentrating more on tax revenues. M a cmsequence of publishing the Chamber's preliminary economic indicators, the city and county lists for potential lnd1cators.The proposed steps In IEYeloplng an lnd1cator system can be used by private and public sector organizations. The major steps in developing indicators are: 1) Establish guidelines and 2) SUrvey ecouomlc Indicators from other organlzattons. 3) Choose parameters by the analysis of the local economic structure. 4) Complete an Inventory of data sources. 5) Collect 8lld systemize the informDtion 6) Format the presentatton of d8t8 using text, tables, graphs, 8Jld maps. 7) Evaluate 8lld review the economic indicators. Economic indicators must 8DJrateJy reflect t human resources, physical81ld built environment, financial services, consumer forces, economic globalization 8lld the locett0081 pull of the community. They provide general 8lld technical Information to the business person, policy maker, and public enab11ng purposive chanQe to occur. Ultimately, the economic heelth of the community is improved by the economic development intervention whether it be activities fooused on retaining and expanding alr881i( existing firms or cdivities for stimulating the indigenous creation process (entrepreneurship} or community efforts to attra:t new Industry to the area 35

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Eoonomic indicators are needed to identify problem areas in the local economy. They can quantify the magnitude and direction of measurements. The ecouomic indicators must meet the test of comprehensiveness, clarity, accurfLY and current information if they are to be a viable tool for economic development efforts. The more accurately they reflect the local economy the more effective they are in the intervention process of precipitating purposive change. Ultimately, the economic well-being of the community is 1m proved. )6

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APPENDIX

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SERVICES FIN., INS., & R.E. RETAIL TRADE WHa.ESALE TRADE TRANS. & UTIL. MANUFACTURING Co DIV. Cf El"'''. 8. TRAINING REPMT 1 C Brut.DER COONnES 37

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TABLE 3 BOULDER COUNTY EMPLOYMENT AND WA8ES COVERED BY UNEMPLOYMENT INSURANCE 1ST QUARTER 1985 DIVISION UNITS AYERAOE AYERAOE EMPLOYMENT WA6ES Federel eov. 37 2,598 $2,268 State and Lreal eov. 54 17,575 I ,334 Total Gov. 91 20,174 I ,455 Private Ag. Forestry & Fish 102 741 I, 134 Mining 56 288 1,872 Construction 624 4,676 I ,517 Menufs;turing 507 30,358 2,100 Trans. & Utilities 145 2,325 I ,891 Wholesale Tr8:ie 359 2,633 1,688 Retail T ru 1,229 18,229 814 Fin., Ins., and R.E. 523 3,516 I ,5b5 Services 2,023 19,630 1,405 Total Privet 5,568 82,396 1,563 Source: ColorEIXI Division of Emplovment and Training

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CHART 2 BOULDER (CITY) EnPLOYnENT 1984 & 1985 • 1964 Ill 1985 47000+----46000 J F M AM J J AS 0 N D MOOTH 1985 Etfl.O'IK:NT BtU.DER (CITY) &P. 'w1RCERS lJEJ'P. RATE fl). llefl.O'rtJ) JAN. 46,670 8.2 FIB. 46,6ZZ 7.9 MARCH 47pJ8 7.2 N'RL 6.2 HAV 48,013 6.1 48;J:JO :S.9 ..u.v 48,214 5.8 AlOJST 48,162 SEPT. 48,490 5.7 OCT. 48;J61 6.0 fiN. 47,871 6.7 DEC. • :50,941 7 'lfRELI11tltRY DEC.lltAD..l.ISTED l.Nt'FLOV. RATES: STATE-6S4JI DENYER/Bru.DER LMA 5.795 SOli RCE: CQ.ORADO DIIIISIJN (F Et'FLOVKNT N.:J TRAitiiJ 4,144 4,017 3,620 3,143 3,110 3,0ZZ 2,961 3,D24 2,921 3,102 3,438 3,'579 TI-E CRY Etfl.OYI"ENT DATA IS CAI..Cll.ATED AS A c:F TI-E ctUfTY DATA. .39

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124000 122000 120000 118000 116000 114000 112000 110000 CHART 3 BOULDER COUNTY EttPLOYt1ENT """"' .,., \ v ['-, "' I ,........ J / v \I ./ ,..... UNEMPLOYED / r-""" 1/ \ I " "'"""' l/ H \ /'("' \ v "' :/ J F M A M J J A S 0 N D J F M A M J J A S 0 N D 1984 MOOTH 1985 I .... LABOR FmrE EMPLOYED W
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41 CHART 5 BOULDER SALES TAX 198"" & 1985 DEC. YEAR TO DATE Other Construct. Use Tax c Bldg. MaL-Retail • DEC. 1984 A Auto. Trade 1111 DEC. 1965 T E Trans. &. Utll. G Gen. Mer. Retail 0 R Home Furnish. y Apparel Stores Eating Places Food Stores 0 1000 2000 3000 4000 5000 6000 $ REVENUE (000) CATEGORY -1984-1985%CHANGE FOOD STORES 3,252,205 3,381,844 4.0 EATING PLACES 2,087,716 2,218,533 6.3 APPAREL STORES 1,108,341 1, 133,352 2.3 HOME FURNISHINGS 911 '863 951,292 4.3 GEN. MERCH.-RETAIL 5,091,622 5, 101 '244 0.2 TRAN. & UTILITIES 2,140,623 2,307,257 7.8 AUTO. TRADE 1 '927' 164 1,870, 433 (2.9) BUILDING MAT .-RETAIL 754,453 758, 117 (. 5) CONSTRUCT I ON USE TAX 1,557,941 1,378,004 (11.5) OTHER 4,447,721 4,767,440 7.2 TOTAL 23,279,649 23,867,516 2.5 SOURCE: CITY OF BOULDER

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TABLE 1 42 6EOORAPHIC DISTRIBUTION Of SALES TAX REVENUE 1984 & 1985 SUMMARY AREA 1984 YTD 1985 YTD S CHANOE s s BURA-Arapahre to Walnut, 26th-32nd 6,469,095 6,773,950 4.7 CAeiD-Broadway to Walnut, 9th-16th 649,008 750,089 15.6 CAGID Buildout-Arapahoe to Walnut 5th-18th 809,831 736,832 (9) Boulder Mall-Pearl St. 1100-1499 550,066 561,185 2.0 East Downtown-Arapahre to Walnut 14th-23rd 311,696 277,209 (11.1) Downtown Extension-Arapahoe to University, 9th-13th 215,942 247,600 14.7 Gunbarrel Industrial 2,147,063 2,625,150 7.3 Gunbarrel Commercial 319,438 394,163 23.4 Boulder Industrial 2,011,693 2,372,645 17.9 North 28th Commercial-Arnett to Valmont, 26th-31th I ,632,751 1 ,638,197 .3 Table Mesa-Broadway to Toedtli Dr. 934,960 903,973 (3.3) Besemer 192,938 173,610 (3.9) Thunderbird 243,253 216,276 (11.1) The Hill 371,651 105,525 8.2 North Broadway-Alpine to Spruce 9th-13th 329,464 303,616 (7.8) Source: City of Boulder Sales Tax Office

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other CGnstruct. Use T IX c Bldg. t'lal.-Retail A Auto. Trade T E TrS'IS. !. util. 6 6en. Mer. Retail 0 R Home Furnish. y Apparel Stores Eating Places Food Stores 0 CATEGORY FOOD STORES EATING PLACES APPAREL STORES HOME FURNISHINGS GEN. MERCH.-RETAIL TRAN. 8c UTILITIES AUTO. TRADE BUILDING MAT .-RETAIL CONSTRUCT ION USE TAX OTHER TOTAL SOURCE: CITY OF BOULDER CHART 4 BOULDER SALES TAX 1985 & 1986 YEAR TO DATE-JAN. • JAN., 1985 II JAN., 1966 50 100 1 so 200 250 300 350 400 $REVENUE (000) -1985-1986-%CHANGE 257,215 268,512 4.4 170,516 170,262 (. 1) 74,404 70,647 (5.0) 69,795 67,591 (3.2) 366,308 346, 117 (5.5) 119,927 207,322 38.3 141 '321 138,329 ( 2. 1) 11,102 12' 133 ( 5. 1) 97,301 94,212 (3.2) 191,888 213,272 9.4 1, 566,077 1 '618, 397 3.3 4J

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44 TABLE 5 8EOORAPHIC DISTRIBUTION OF SALES TAX REVENUE JANUARY 1986 AREA 1985 YTD 1986 YTD S CHAN6E s s BURA-Arapahoe to Walnut, 26th-32nd 442,594 457,372 3.3 CA81D-8roll:iwey to Walnut, 9th-16th 60,046 45,935 ( 23.5) CAGID BuilOO\Jt-Arapahoe to Walnut 5th-18th 46,524 54,284 16.7 Boulder Mall-Pearl St. 1100-1499 40,423 39,274 (2.8) East Downtown-Arapahoe to Walnut 14th-23rd 22,988 14,444 (37.2) Downtown Extension-Arapahoe to Un1vers1ty, 9th-13th 22,889 21,218 (7.3) Gunbarrel Industrial 94,214 128,692 36.6 Gunbarrel Com.mercial 26,926 28,388 5.4 Boulder Industrial 114,570 181,123 58.1 North 28th Commerc1al-Arnett to Valmont, 26th-34th 137,302 119,779 ( 12.8) Table Mesa-Braooway to Toedtli Dr. 70,378 62,584 ( 1 I. 7) Besemer 35,536 32,806 (7.7) Thunderbird 17,987 15,251 ( 15.2) The Hill 34,912 38,667 10.8 North 8raooway-Alpine to Spruce 9th-13th 24,576 22,875 (6.9) Source: City of Boulder Sales Tax Office

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CHART 6 &ROSS SALES FCII FOOO STORES II THE CITY OF BOULDER 19000000 16000000 17000000 16000000 15000000 OO..LARS 14000000 13000000 12000000 11000000 10000000 JAN. FEB. HARCH APRL HAY ..... ..u.v AOO. SEPT riJY. DEC. V; I /) I I \ I/ V" 17 "0 rl \ v '/ I II 'I J F M A M J J A S 0 N D MCJfTH CRJSS SM.ES n. RD) SlliC 1984 • 11163423 15991341 14SS259S 16780074 14974311 172S:i&J5 1a24941 167S6768 1720Z?!S5 1.S • 1986 • 14783504 14962376 16451085 156094'17 17139972 1575'5421 1763SOSS 17954120 17m918 SOIIRCE: CITY (F BOll' DfR SM.ES T NC c:J'Fia + 1984 1985 .. 1986 45

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CHART 7 &ROSS SALES FCII EATING PLACES IN THE CITY OF BOUlDER 12000000 11000000 ) \ / \ v v J I v 10000000 OO..LARS 9000000 J " \ v I ( \I' 6000000 7000000 6000000 J S
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D000000 120000000 100000000 80000000 60000000 40000000 20000000 0 JNt FEB. MARCH APRL MAY ..U.Y AOO. SEPT. OCT. riJY. DEC. CHART 8 6ROSS SALES FOR 6ENERAL ttERCHAJmiSE EST ABI..ISHI'IENTS I /; II \\ II 1'\ II IU ' II \ t::::,.. r ' t J \...:::::' J F M A M J J A S 0 N D MCWTH G1aJSS SM.ES FtR t'ERCHNC>ISE STORES + 1ge.t -$-1985 • 1966 1984 1986 c.l CHN& 23026012 21321511 24485476 24966218 81057192 26748807 26760582 83606074 n9BB388 2:515!6918 117'91SJ1 29388205 24557131 88380462 27188926 28666620 101588333 266M2m 31127322 295'51909 28724843 150921286 71016432 -n SOIRCE: CnY (F BO I DER SM.ES TAX CFFO: 47

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OO.LARS 16000000 15000000 13000000 12000000 11000000 10000000 9000000 6000000 7000000 6000000 5000000 4000000 JM. FEB. MMCH APRL MAY .lN: ..U.Y AUG. SEPT. OCT. NO. DEC. CHART 9 6ROSS SALES FOR HOnE F ... ISHIII6S EST ABLISHr'IEKTS j j I l I \ II :\ VI \ l/1 j 1 L 1 11f \ I \It rt , II ., / I I I l 11 ...... J F M A M J J A S 0 N D 1984 t 8"l'92m2 8968689 142461:51 7412011 1330092 13231515 111AH26 9001855 8824272 868!619 15230403 t 812344:5 7076890 1281:5408 7623348 7406118 ' ,..4:5621 10941509 13398008 9451617 8449688 8854438 1CJ86 t ... 1984 1965 • 1966 2 48

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10000000 9000000 8000000 7000000 6000000 OO.LARS 5000000 4000000 3000000 2000000 1000000 0 JAN. FEB. MARCH N'RL HAY ..ALV Alii. SEPT. OCT. fOI. DEC. r--.._.. CHART 10 6ROSS SALES FOR APPAREL STORES CITY OF BOULDER / "' I 7 I :/ / ............ / df v ......... v ... 1964 1965 .. 1986 J F M A M J J A S 0 N 0 MCJ4THS GROSS NiP MEL STHS 14384 1986 4JICHN&. 1985-1986 1234987 3629277 343A84S -s 3629926 3998768 5081037 4102659 4372870 426021:5 3676479 4172267 4110292 6098050 6327827 4NWI 4509810 4276683 4061'036 88:54438 49

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CHART 11 6ROSS SALES FOR AUTottOTIYE TRADE BUSINESSES 26000000 24000000 22000000 20000000 DW.ARS 18000000 16000000 14000000 12000000 10000000 JAN. FEB. MARCH APRL HAY ..U.Y MJO. SEPT. OCT. lillY. OEC. 1V) b 1/ v " v \ " 1 ..... I ,v ) v ......,f ........_ J F M A M J J A S 0 N 0 tKJfTHS GROSS SAliS FeR AlJ'I'li'IJTIYE TRADE 1984 198:5 1986 4JIOtN& 1985-1986 18691744 16289454 18340507 1J 21016572 22518295 19107366 22792910 201764915 23:5617C17 22046231 :t3no5m 20552910 22020887 20378140 21383069 19468949 21024706 21021384 SOtR:E: CITY m:' BOlDER SAliS TAX (Ff'lt ... 1984 1985 • 1966 .50

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CHART 12 &ROSS SALES FOR ftiSC. BUSIIIESSES IIICLUDIIIA-.:ACTUAEAS 160000000 1.4000000() 120000000 100000000 Da.LARS 80000000 60000000 .4000000() 20000000 0 J F M A M J J A S 0 N D M
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T A X R E v E N u E 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 CHART 13 BOULDER ACCotlttODA TION TAX REVENUE. I 984. I 985. & 1986 Jan. Feb. Mar Apr My Jun Jul Aug Spl Oct Nov Dec Ill 1984 ADJUSTED TO 5.57C II 1985 AT 5.57C ... 1986 ACCOMODATION TAX REVENUE 1985 1986 JANUARY 40,736 42,291 FEBRUARY 29,857 MARCH 71,505 APRIL 56, 147 MAY 67,646 JUNE 76,015 JULY 87,018 AUGUST 97,350 SEPTEMBER 66, 195 OCTOBER 64,705 NOVEMBER 45,887 CITY OF BOULDER SALES TAX OFFICE 52

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DCl.LARS 2000000 1600000 1600000 1400000 1200000 1000000 600000 600000 """ 400000 200000 0 CHART 14 GROSS SALES FOR tiOTEL/HOTEL ACCortODA TIONS [\ v _j_ r'\ \ l '\ \ L ' ..... .... II "' -... J F M A M J J A S 0 N D JM. FEB. MARCH APRL MAY ... ..U.Y SEPT. OCT. JIJY. DEC. 1 1964 ..Q1985 19661 GROSS PROCUDS FtR ACC011>ATDCS 1984 $ 936772 905990 1037137 940725 1371443 1473724 1610936 869S3 12Q432 885989 731816 $ 583517 1069877 1279034 1426382 1630073 1817219 1211000 874884 746712 1986 $ SOlRCE: CITY OF BOIIl.DER SALES TAX OFF Ia 95CHN&: .53

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g 8 7 6 SMILLICJ-45 5 4 3 2 1 0 VALlE (F EIULDING PERMITS($) NO. Of EllDG. PERMITS VALlE (F RES. PERMITS($) NO. Of RES. PERMITS VALlE (F I'DHS. PERMITS($) NO. (F I'IIRS. PERMITS SOliRCE; CITY OF BOli.DER CHART 15 VALUE OF NEW CONSTRUCTION PERitiTS FOR BOULDER Hl83-1986 3 4 5 6 7 8 g 10 11 12 13 ACCOONTING PERIOO I• 1983 II 198->1 II 1985 [) 19861 CHART 16 VALUE OF RESIDENTIAL AND NONRESIDENTIAL PERitiTS. CITY OF BOULDER. 1985 2 3 4 5 6 7 8 g 10 11 12 13 ACCCliNTING PERIOD I• NOORES .• 1985 • RES .• 1985 1.S YEM 00 SlH1N ai'H.l.ATIYE 95 OfN& F(R 1.S FID11984 ,004,:523 -48.6 904 -9.3 30,452,703 -37.3 290 -23.5 ,:s:51 ,820 -:57.6 614 -o.6 73 2,691,100 45 666,6:51 28 NOTE: VALlE (F I'DHSIIENTIAL IS TlE TOT AI. V Al.lE (F f'1' altST'IU::TIJN PERMITS MNJS 1 FAMLY DW.LING, 2 FAMLY D'w'D.LING, IR) tt.I.TH'AMLY D'w'D.LIIl

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COMPANY Aspen Ribbons McData (Gunbarrel) American Laser Computer Automation Lifecare Systems Electro-Optics frame TechnolOJY Nor and CliniCom Identification Devices TABLE 6 MI8RATION OF BOULDER BUSINESS FIRMS 1981-85 OUT -MIGRATION JOBS 265 121 100 125 75 200 45 IN-MIGRATION 30 40 40 DESTINATION Lafayette Broomfield Utah California Boulder County Carlsbm, CA Bnd Hong Kong canon City from Iowa Minneapolis Westminster EXISTING FIRMS THAT WILL OR HAVE EXPANDED ELSEWHERE Ball Corporation 2,500 600 Agrlgenet1cs 20 Jefferson County Boulder County Ms:tlson, Wise. .5.5

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ALL-ITEMS INDEX Denver I 08.9 Boulder 1 08.4 Ft. Collins 1 0 1.4 Longmont 97.9 Grand Jet. 96.2 Co. Springs 95.8 Pueblo 91.6 UTILITIES Denver 73 Boul!B' 73.9 6rand Jet. 70.7 Pueblo 68.5 Co. Sprinos 62.8 Ft. Collins 68.0 Longmont 60.9 MISC. Ft. Collins Denver Longmont Boulder Gr81ldJct. Pueblo Co. Springs 107.5 100.9 99.3 98.2 96.0 95.9 95.0 TABLE 7 COST OF LIYINO INDEX OROCERYITEMS Ft. Collins 115.1 Co. Springs 11 0.8 Boulder 110.7 Denver 11 0.3 GrandJct. 109.0 Longmont 108.2 Pueblo 99.0 TRANSPORTATION Denver 112.9 Grand Jet. 1 03.7 Longmont 103.5 Boulder 1 02.6 Ft. Collins 100.6 Co. Springs 98.9 Pueblo 96.2 HOUSING Boulder 140.6 Denver 134.5 Co. Springs 1 00.3 Longmont 99.9 Ft. Collins 99.4 Grand Jet. 95.3 Pueblo 82.1 HEALTH CARE Pueblo 113.6 Bould!r 110.3 Longmont 108.8 Denver 107.3 Ft. Collins I 02.5 Co. Springs 95.7 Grand Jet. 95.2 ALL-ITEMS INDEX FOR OTHER CITIES IN THE NATION Atlanta 107.7 Austin 111.6 San Diego 116.5 St. Louis 97.2 New York 142.5 Seattle 107. 1 Source Amer/CB/1 Ch8mber of Commerce ResetJrch Asstxlatlon Inter-City CiJst of L tvlng lnd!x, Forth Quarter 1985 The ACCRA Cost of Living Index is location-specific. It is an estimation of cost of living differentials among cities. It is not a time series index. It 00es not include tax burden. Intercity differences of 3 or fewer points Is not statistically significant. I 00 is the national average.

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57 TABLE 8 REAL ESTATE TRANSACT IONS SUMMARY FOR 1985 CITY OF BOULDER REMAINING BOULDER COUNTY CATEGORIES -1984-1985-1984-1985NO. OF NO. OF NO. OF NO. OF TRANS-TRANS-TRANS-TRANS-ACTION ACTION ACTION ACTION RESIDENTIAL SINGLE FAM. 1,225 1,227 2,443 2, 125 DUP. /TR IPLX. 36 22 64 55 1-8 UNITS 17 13 31 10 +9 UNITS II 8 4 CONDOM IN. 1, 123 616 111 229 COMMERCIAL MERCHAND. 13 8 OFFICES 21 3 5 RESTAURANT 3 2 3 1 WAREHOUSE II 10 5 8 MED. BLDG. I 0 0 GAR. I AUTO REPAIR 2 1 0 0 AUTO DEAL. 0 2 INDUSTRIAL MANUFACT ./PROCESS. 3 1 3 WAREHOUSE SOURCE: BOULDER COUNTY ASSESSOR OFF ICE DEED TRANSFERS ARE OF SELECT CATEGORIES NOT A COMPREHENSIVE TOTAL.

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TABLE 9 BOULDER COUNTY TRANSACTION ACCOUNT DEPOSITS 1984 1985 Z CHANBE 1ST QUARTER NOT AVAILABLE $366,638,000 2ND QUARTER $356,034,000 $352,328,000 -1.0 3RD QUARTER $377,000,000 $387,695,000 +3.0 4TH QUARTER $378,649,000 SOURCE: FEDERAl RESERVE, KANS'.S CITY BRANCE INCLUDES 25 COMMERCIAL AND BANKS IN BOULDER COUNTY. TRANSACTION ACCOUNTS INCLUDE DEMAND DEPOSITS, AUTOMATED TRANSFERS, TELEPHONE ACCOUNTS, AND NOW ACCOUNTS. REC3ULAR SAVINCSACCOUNTS, TIME SAVINOSACCOUNTS,AND MONEY MARKET DEMAND ACCOUNTS ARE EXCLUDED. All Item TABLE 10 CONSUMER PRICE INDEX-JANUARY 1986 U.S. AYERA8E I Change 1 Yr. fv1J 328.4 3.9 1967=100 DENVER I Change 1 Yr. fv1J 364.4 3.9

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FOOTNOTES 1. Joseph Schum peter, The Thtlory of Etma11ic P11Je 3. 2. Max Weber, The City, P8IJ! 10. 3. James Heilbruin, Urb8nEcmomics8fltiPublicPolicy, page 17. 4. Flatd Harmston, pags 3. 5. Js1e Js:obs, CililfS 6fld the W1!6/lh of Nmims, page 63. 6. James Christenson and J.S. Robinson, Community OeYelopmenl in America, p. 12. 7. 11oving TOW8rds PrtB:Iivily, A Report on McManis Assa:iation's Third of Chambers of Commerce Economic Development Efforts, Feb. 1985. 9. tunptllli"liveAIMin/agtJ, National Council for Urban Eoonomic Development, paga 8. 10. Moving Towards Pros:tivity•, A Report on the McManis Association's Third Annual of Chamber of Commerce Economic Development Efforts, Feb. 1985. 11. tlmpell"liveAtMJn/agtJ, paga 8. 12. M. Ross Boyle, ihe Strategic Planning Process-Assessing a Community's Economic Assets., /Jwelopmenl tlmmenlary, paga 3. 13. F.M. Cox et al, Slr8/tJgliJsofCommunityfrg!nizalion1 p.24 -25. 14. AoHmi1 Tech Trend Reptrl. Strategfc Assessment Inc., 1985. 15. Jeff Simpson, Questions Anyone., News1611lr, Dec. -Jan. 1985-1986. 59

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60 BIBL108RAPHY Tlft:h Trend Rt!p(Tf, Strategic Inc., Boulder, CO, September, 1985. Aronson ,J. Richard. l18111f.l!/11eniPolfcfes in La:al fbvernment Ff!NIIICe. I nternatlonal City Mm11J1ement Administration, 1981. BIJ{le, M. Ross. ihe Strategic Planning Process-Assessing a Community's Eamomlc Assets, Eanm ic Oevelopment Commentsry, vol. 7, no. 2, SUmmer 1983. Christenson, JA, and Robinson, J.W. Community/Jt!Yelopment inAmeriCIJ. Ames, Iowa: Iowa State University Press, 1980. eompetitiveAdvantege• ,National Council of Urban Economic Development. Washington, D.C., July 1984. Cox, F.M., Erlich, J.L., Rothman, J., and Tropman, J. Strategies of Community Organization. Peeroclc: Itasca, 111., 1979. Harmston, Floyd. TheCommunityas811EaJfXK11icSystem. Ames,lowa: lowes State University Press, 1983. Heilbrun, James. l/rbsn Economics 8lld Public Policy. New Yort: St. Martin's Press, 198 1. JacobS, Jane. Cities811dthe WesllhofNations New Yort: RanOOin House, 1984. TheEconomyofCities. New York: R8mbn House, 1969. The!Je8th811dlifeoffJreatAmeriC811Cities. New York: R8n00m House, 1961. Katzer, J., Coot, K.H., and Crouch, W.W. EvaiU8!ing lnfrrmation. Res:iing, Mass.: M:lisonWeslet, 1982. KrueckeberQ, DA, and Silvers, AL. l/rb61 Pl811ningAn8/ysi-11ethais811dl1tx1!/s. New York: Wiley', 1974. Martin, tbverd, editor. Ch8m/JerofCommercellesetrehActivities. Washington D.C.: Amerfcen Chamber of Commerce RC3eel 'Chers Associetion, 1975. •Matters of Fact•, Inc., Apr11 1985. Moving Towards Pna:tivity. A Report on the McManis Association's Third Annual Survey of Chmnber of Commerce Economic Development Efforts. Weshington, D.C., Feb. 1985. Schmid, C.f. lllniJtdoffi'aphtcPresentat/on. The Ronald Press Company: New York, 1951.

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61 Schumpeter. JA The Tht!tryoftmallic/Jevelopm1!11l CambriO;Jt. Harvard University Press, 1934. Simpson. J. Questions Arrtooe. AaRA Newsletter. American Chamber of Commerce Reseal 'Chers Assoctetton. vol. 1 0. no. 3. Dec. -Jan. 1985-1986. Weber, Max. The City. The Free Press: New York, 1958.