The Importance of Intelligence, Evidence and Being Informed
Access this course module's slides and a briefing document via the links below:
Introduction
Effective economic development at local and regional levels relies heavily on informed decision-making. This briefing highlights the crucial role of evidence, intelligence, futures, and foresighting in developing robust economic strategies. It stresses the importance of asking relevant questions, utilising diverse data sources, and understanding the dynamic nature of economies to attract investment and tackle challenges.
The Foundation: Evidence and Intelligence
Being well-informed about an economy is essential. This involves asking the right questions, such as identifying local skills and assets, evaluating regional economic performance against national averages, and understanding job growth or decline in specific industries. Most countries, states, and regions have excellent statistical data and information, supplemented by global economic forecasting firms and specialist consultants, meaning there is no excuse for neglecting evidence in understanding local and regional economies.
Why Evidence Matters: Dynamic Economies and Prioritisation
Economies are constantly changing. Even a well-researched five-year economic strategy can quickly become obsolete. Continuous evidence and analysis ensure strategies remain relevant. Furthermore, evidence clarifies the scale and importance of problems, challenges, or opportunities, allowing for the prioritisation and allocation of limited resources. Crucially, presenting robust analysis and figures is vital for attracting inward investment, as investors require comprehensive data on local companies, workforce, skills, and regional strategies.
Guiding Principles for Intelligence and Analysis
Start with the Right Questions: Effective use of evidence and intelligence involves connecting different pieces of information to infer causal relationships. The aim is to understand why certain economic features exist and whether they are positive or negative, often requiring the triangulation of various information sources to gain insights into the causal factors behind observed characteristics and performance.
Specialist Activities, Broad Benefits: While many can benefit from intelligence and analysis, providing and analysing evidence and forecasting are specialist activities. Economic development organisations often employ statisticians and economists to process data, assure quality, and explain causality and change. Chief economists lead debates, inform policy, and communicate economic events. External experts and academics with in-depth knowledge are also frequently engaged. The insights derived must be communicated accessibly for non-economists, ensuring relevance to their roles and to policymakers, strategists, and service deliverers.
Operating within Wider Contexts: Local and regional economies are significantly influenced by national and international environments and dynamics. Understanding "megatrends" – such as an ageing population, inequality, shifts in international economic relationships, technological advancements (AI, digitalisation), and environmental concerns (climate change, resource scarcity) – is critical. It is vital to assess how these megatrends specifically impact a local or regional economy, considering factors like population demographics or proximity to global cities.
Politics and Confronting Misperception: Political drivers often necessitate intelligence and analysis. Studies may be commissioned to understand economic downturns, address challenges arising from high growth (e.g., congestion, skills shortages), or support bids for public funding. Intelligence can also shape local politics by resetting outdated perceptions about an economy, injecting fresh ideas, and fostering debate. Objective and high-quality evidence provides a non-partisan basis for partners and stakeholders to discuss issues and agree on priorities, even amidst political disagreements on solutions. Understanding the political context and implications of economic development activities is therefore essential, requiring consideration of how research questions and findings are relevant to various stakeholders, from local organisations to national government.
How Intelligence and Analysis are Conducted
Evidence is gathered and analysed through various methods, including one-off studies, regular baseline studies, or economic reviews. Government statistical departments provide high-quality socio-economic data. Dedicated intelligence or research teams within economic development organisations often run research programmes, sometimes through "research observatories" that offer public platforms for evidence and insights. Deep-dive reports on specific topics (e.g., emerging markets, entrepreneurship) are also common.
It is important to acknowledge that statistical estimates at local levels may use smaller sample sizes than national statistics, though full-sample data (e.g., census, payroll) offers greater validity. Typical activities include:
Devising Research Plans: Shaping the right questions is crucial to ensure research provides sought-after insights.
Baseline Studies: Explaining differences between local, peer, and national economies.
Regular Economic Reviews: Comprehensive reviews, quarterly briefings, or more frequent updates during crises.
Focused Reviews: Examining specific aspects like the labour market, business climate, or individual sectors.
Sector Studies: Exploring facts and trends in specific industries.
Forecasts and Scenarios: Predicting future economic conditions and exploring potential futures to identify opportunities, threats, and implications.
Foresighting Projects: In-depth looks at future industry or societal changes, often combining evidence with expert views.
Investment Promotion Collateral: Tailoring research findings into promotional materials for inward investors.
Internal teams (statisticians, economists, analysts) or external providers (universities, survey companies, consultants) can conduct research and analysis. Recognising internal capacities and knowing when to engage external expertise is vital.
Outputs, Outcomes, and Impacts
Desired outputs range from raw data for internal analysis to written reports, publishable documents, and presentations. Outcomes involve using these outputs to inform responses to challenges, guide investment decisions, and shape the direction of economic development teams. The ultimate impact is to improve policy and practice, shed light on important issues, quantify problems, inform stakeholders, and validate or challenge existing courses of action. Confidence in analysis and its conclusions is paramount.
Lessons from Practice
Data is Not Analysis: Simply providing data tables, maps, or dashboards is not analysis. It requires interpretation to explain what the data means, its implications, and what actions should follow. Effective analysis triangulates multiple datasets and answers questions like "is this good or bad?" or "what should we do differently?".
Observatories are Powerful: Public-facing intelligence units and observatories facilitate the sharing of evidence and analytical capacity, benefiting a wider audience.
Ensuring Research Benefits Decisions: Research and intelligence must be relevant and trustworthy. Non-technical audiences, who are often the primary beneficiaries, are more interested in implications than methodologies. Trust is built through high standards, robust data, and evidence-backed conclusions. Relevance is achieved by addressing stakeholders' key questions and challenges.
History vs. Forecasts: Most data reflects the past, so it's crucial to consider intervening economic shocks that might invalidate it. Conversely, economic forecasts are not guaranteed facts. While some forecasts (e.g., demographic analysis, replacement demand) are more robust, unforeseen "shocks" can always alter predicted outcomes.
Conclusion: Choosing the Right Path
Ultimately, economic development professionals must analyse information, understand their needs, and determine the best ways to address them. Research priorities should be shortlisted based on: the needs of the strategy and stakeholders; available resources; organisational responsibilities; internal capabilities; and accountability, considering the scale of decisions the intelligence will inform. Case studies from Manchester, Ireland, Pittsburgh, and various European cities demonstrate how evidence-based approaches have successfully driven economic transformation.