Business Attraction Decisions with Economic, Environmental, & Occupation Data

Candi Clouse, PhD

July 08, 2021 20:12

INTRODUCTION

With the new additions to the datasets in IMPLAN, business attraction decisions can offer even more insights on potential firms. Not only can you look at the Economic Impacts, as always, but now you can examine the Occupation and Environmental Impacts as well!

Let’s say the state of North Carolina has one incentive to offer a new manufacturing firm valued at $1M. There are two firms competing for the funds. The first is a glass manufacturing company and the second is a clothing manufacturer. To set this up, we can run what this new $1M incentive would look like in each Industry. We have two Industry Output Events each for $1M in Industry 199 and Industry 124 with our Data Year set to 2019 and our Dollar Year set to 2021.

ECONOMIC IMPACT

So we will start with examining the differences in the Economic Impacts between the two options.

The total Value Added and Output Impact is similar between the two options. However, the clothing company does have a higher total Employment and State Tax Impact.

OCCUPATION IMPACT

Heading to the Occupational Averages tab, we can filter for the Direct Impact and 1-total Occupation Aggregation Level to see the Average Employee Compensation paid per hour.

The glass company is paying significantly higher wages with almost $33/hour while the clothing company comes in at under $16/hour.

ENVIRONMENTAL IMPACT

The final piece of the puzzle we will examine in this example is the Direct Environmental Impact for each of the firms.

Keeping the filter set to show just the Direct Impact, we can see that the $1M spending by the glass firm would yield approximately 340K units of pollutants while the clothing firm would only produce 10K units. To dig a little deeper, the total environmental impact from the glass firm is 1,203,312 units while the clothing firm is only 171,584 units.

DECISION TIME

Now, in this example we just looked at a few of the thousands of data points that you might be interested in examining. Let’s take a look at the final comparison.

	Total Employment Impact	Total Output Impact	Total State Taxes	Average Direct Employee Compensation per Hour	Direct Environmental Units
Glass	6.98	$1,761,400	$33,279	$32.96	340,672
Clothing	18.30	$1,634,077	$42,892	$15.53	10,482
Difference	11.32	-$127,323	$9,613	-$17.43	-330,190

Depending on what is most important to the decision makers, each firm will bring value to the state. The glass company has higher wage jobs, but a lower total Employment Impact and State Taxes. The clothing company has significantly lower wage jobs, but does bring more of them, and it also has a far smaller environmental footprint. Which company should win the incentive? You be the judge.

DATA LIBRARY TIE

Hey, wondering how I found two Industries that would make for an interesting comparison for this exercise? Head over to the Data Library. There, tables can be created to examine all of our data. In this case I merged Occupation Average Employee Compensation per Hour with Environmental Value per $ of Output for each IMPLAN Industry in North Carolina for 2019. This allowed me to see which Industries were high on one measure (like Average EC/Hour) and low on the other (Environment Value per $ of Output).