Tag: Blog

Economic Development is More Important Than Ever

Column from the Indiana Economic Development Association

Indiana launched into 2020 with the unemployment rate in many communities hovering at near-record‐
level lows of 2 – 3%. A major concern in many communities was the lack of workers to fill current jobs.
In response, economic developers shifted from attracting businesses to attracting workers.

It is impossible to calculate how drastic the change has been in four short months. Economists project
that unemployment rates will hit double‐digit levels, perhaps approaching rates not seen since the Great
Depression. Over 26M American jobs have been lost effectively canceling all job gains since the Great
Recession. Local stakeholders fear that much of the progress they have made in the last few years to
grow local business, enhance downtown development, and increase the tax base will be threatened as
revenues from various taxing sources will see shortfalls.

In flush times and lean, the practice of economic development is focused on attracting, expanding, and
retaining investment in communities. Prior to the coronavirus crisis, economic developers were
diversifying their services by working with local businesses to help fill open jobs with qualified workers,
collaborating with chambers of commerce and tourism bureaus to promote community assets to attract
new residents and workers to their communities, and working to support local entrepreneurs in starting
and growing their businesses. The evolution of economic development extended to downtown
development because vibrant downtowns are key to attracting and retaining talent.

Fostering single‐family and multi‐family housing stock became a priority for talent attraction. This effort
to develop workforce housing led to community‐wide collaborations between economic developers,
elected officials, and housing developers, who came together to solve unique housing challenges in
communities across the state. Many economic developers have focused on expanding childcare
solutions, as well: high quality and affordable childcare contribute to our quality of life and workforce

The work of economic developers is constantly evolving because they are reacting to the unique needs
of their communities. What works in one region or county may not work in another, so our connections
across the state allow for sharing best practices and the ability to bring new ideas back to our
communities that are tailored to local and regional needs.

As we emerge from the current crisis, communities will be faced with many displaced workers and
closed or struggling businesses. Local economic development organizations will be the natural leaders
helping our state recover because they know the local businesses, understand their workforce needs,
and are experts in attracting and retaining tax base: all critical activities in helping communities claw
back from the coronavirus crisis.

At last count at least 21 Indiana‐based economic development organizations have played a role in the
creation of local disaster relief loan or grant programs to help local small businesses survive during the
stay‐at‐home order. This is another example of their understanding of local business needs and their
ability to adjust their priorities to respond to the needs of their communities.

In the last few years, economic developers have become more focused on supporting entrepreneurship,
encouraging the creation and growth of home‐grown businesses, exactly the kind of support and
expertise that will be needed to revitalize our downtowns post‐coronavirus crisis.

Economic development professionals have developed national networks of business contacts that they
work with when companies want to expand or relocate. These networks can help bring suppliers to a
community to support existing companies. While supporting our existing businesses will be the first
priority, the attraction of new companies to the state will be an area of focus as we move to fully
recover lost jobs and tax base.

As we look toward the future of Indiana, we should all find comfort in knowing that economic
developers are on the front lines and are ready to evolve again to move their communities out of crisis
and into recovery.

Lee Lewellen
Indiana Economic Development Association

“Pitch-In” Defines our Regional Collaboration and Communities

From: Jeff Quyle, Radius Indiana President & CEO

Did you know that the Dictionary of American Regional English says that southern Indiana has the best pitch-in dinners of any part of the country east of the Rocky Mountains?

Now, in truth, the dictionary brags on our region only in a round-about way. The book actually says that most of the country used the phrase ‘potluck’ to describe a meal where various folks come together with all or most of them bringing some food they intend to share. But Southern Indiana (and parts of Montana) call these meals ‘pitch-ins’. So when you look for the best pitch-ins in the eastern US, you have to look in Southern Indiana.

I think using the phrase pitch-in instead of potluck really reveals something about the character of our southern Indiana culture and communities. To ‘pitch-in’ implies that a person is thoughtfully making an effort to bring something of value, to add their own efforts. In contrast, ‘pot-luck’ sounds like a person is just bringing any old thing that happens to be available — ‘pot-luck’ is more of a take-it-or-leave-it mentality.

Here in southern Indiana, people do have a pitch-in mentality. Whole communities of residents are interested in supporting each other in thoughtful ways. Especially this Spring, as we’re learning the meaning of pandemic and social distancing, Hoosiers in the Radius region and other parts of southern Indiana are pitching-in to support and help one another. The collective heart of the culture here is not about giving potluck; it’s about making an effort to offer value.

In the economic development field, communities and their leaders in the Radius region have also shown a tendency to want to pitch-in to support economic development. Our community leaders recognize that a successful economic development efforts doesn’t rely on just one person or one office carrying the load. We know that success in economic development means that elected officials, property owners, infrastructure providers, educators, and others must work together.

There are many successful examples of communities putting together teams of leaders who each pitch-in their expertise and abilities to help the businesses in the region. That means helping existing businesses as well as working to recruit and settle new businesses. While a city or town may install the sewer line, a utility will provide the broadband, while an accountant will help set up needed account systems, a banker will establish lines of credit, and the local school system will enroll student interns. It’s not potluck – it’s an intentional pitch-in.

Radius is supporting the southern Indiana pitch-in culture by helping our local leaders learn more about what role they can offer. We now hold an annual leadership training program that gives direction, information, and model solutions to community leaders so that they understand what their community needs to succeed in economic development.

When we hold our fourth economic development training program later this year, we will surpass one hundred attendees. That will be one hundred leaders in southern Indiana who will be a little better prepared to practice the southern Indiana tradition of pitching-in.

Keeping Watch at Crane

By: Matt Craig, Radius Indiana Director of Crane Community Support


Every year the counties and cities around Naval Support Activity Crane expend some energy to assuage concerns that it will someday fall to the ax of military cutbacks. Some ask, “is it necessary?” 

Without doubt or hint of hesitation, the answer is a resounding “yes.” Crane’s economic impact to our region is over $2.1B annually with a civilian and contractor payroll topping more than $400 million. 

Local leaders constantly monitor base realignment and closure, or BRAC, the process by which the federal government prunes defense spending or rearranges its assets to meet changing military needs. Unease due to BRAC has come a handful of times, including in the 1980s and 90s and in 2005, when the base lost over 350 jobs. 

For now, though, it appears there’s little political expectation of a BRAC and there has been a wealth of change at Crane since 2005. But local leaders often speak about BRAC the same way officials might talk about a big flood or other natural disaster. It’s hard to say when it will happen, and so it demands permanent, guarded attention.

That’s why it’s important for the community leaders to strengthen the ties between the base and region—to focus on the connections that have united us since 1941. In recent years, community leaders have heard mostly good news. 

Recently, local, state and military leaders created the White River Military Coordination Alliance to enhance communication between Crane and the community and to implement practical policies, programs, and projects geared at sustaining and enhancing the installation and the quality of life in the neighboring communities.

Last year, NSA Crane announced projections to hire 850 new employees above attrition during the next three years, ranging from highly-skilled to blue-collar positions. This builds on the over 400 new jobs already announced in the last quarter of 2018, with new employees coming to both of Crane’s largest tenants, Crane Army Ammunition Activity and Naval Surface Warfare Center, Crane Division.

Under Governor Eric J. Holcomb’s leadership and the Next Level agenda, Indiana is advancing a more collaborative, strategic approach to growing and enhancing its defense industry. Indiana is strengthening its efforts to target industry growth and job creation, and collaborating with industry, government and academic partners to increase the state’s competitiveness in the defense sector. The Legislature also exempted military retirement benefits from income tax with support from not only state lawmakers but from city and county leadership and the business community.

The Office of Navy Research, Development, and Acquisition named Crane as one of only five national “Naval X Tech Bridges.” As the Midwest bridge, it will work to better connect the Department of Defense with the private sector. Crane will collaborate with innovators, academics, small businesses to bring solutions more quickly to national security problems. 

Crane and the region have a strong connection, one that has been strengthened in recent years. Now we must work to keep it that way.


Crane’s Evolution Strengthens Region

By: Matt Craig, Director of Crane Community Support for Radius Indiana


Photographs from Naval Support Activity Crane’s early years contain some familiar images that we can still see today at the installation—from the original command office at Building One to vast acres dotted with munitions storage—there is much that could transport us back in time. But time, and Crane, have marched on at a blistering pace.

Over the years, Crane has continued to evolve to fulfill rapidly-changing mission requirements and is home to the only federal research laboratory in Indiana. It has also become a vital part of the our regional economy and plays an important role as valued community partner. Crane’s evolution from its original designation as an ammunitions depot to now a prime location for new missions and programs is evident from several recent headlines. 

Last month, Crane announced projections to hire 850 new employees above attrition during the next three years, ranging from highly-skilled to blue-collar positions. This builds on the over 400 new jobs already announced in the last quarter of 2018, with new employees coming to both of Crane’s largest tenants, Crane Army Ammunition Activity and Naval Surface Warfare Center, Crane Division.

Crane was also chosen as the location for a new Underwater Launch Test Facility to support the Naval Surface Warfare Center’s strategic mission and a recently completed a new flexible manufacturing facility for Crane Army, which is a multi-million dollar investment to upgrade existing workplaces and increase efficiency in advanced manufacturing.

Last week, the Office of Navy Research, Development, and Acquisition named Crane as one of only five national “Naval X Tech Bridges.” As the Midwest bridge, it will work to better connect the Department of Defense with the private sector. Crane will collaborate with innovators, academics, small businesses to bring solutions more quickly to national security problems. The Tech Bridge, which will operate from Bloomington and WestGate@Crane Technology Park, also gives organizations a chance to seek financial backing through grants and other forms of funding.

From monumental developments in technology and new facilities to an adaptive workforce that is among the best and brightest in the industry, Crane’s capability to grow and change keeps it as relevant today as it was at its commissioning in 1941. It is certain that Crane’s ongoing evolution will continue to make an impact on our region and bring new opportunities for growth.

The Lion Roars: Loogootee HS Manufacturing Program

by Kara Kavensky for Radius Indiana

Trends are encouraging in the Radius region of Southern Indiana when it comes to productive engagement between the private sector and schools. Across the eight Radius counties, community stakeholders are realizing a stronger bridge between education and local industry is critical for future growth.

As a result, high schools are becoming more focused upon students positively contributing to economic development.

“Schools play a major part of economic development and our schools are really hitting it out of the park right now,” says Tim Kinder, Executive Director of Martin County Alliance, a local economic development organization. “The Ready Schools program has really helped to foster this and plan for the future.”

Loogootee High School (LHS), a recently certified STEM school, is setting a national example of what’s possible. Loogootee isn’t waiting for its students to return to the community after earning a post-secondary education or after graduation from high school to participate in the local economy; LHS is engaging their students while still in high school.

Martin County, where Loogootee is located, is nationally ranked (#4) for concentration of STEM jobs thanks to NSA Crane. Crane is the 3rd largest Naval installation in the world and occupies the northern third of Martin County.

“There are fourteen departments of the Federal government within the Crane fence line, taking up 98 square miles,” says Kinder.

Thanks to a grant by the Lilly Endowment supporting the Regional Opportunities Initiatives (ROI) Ready Schools program, the Loogootee School Corporation was able to initiate a design thinking process to help bridge education to area industry.

“Loogootee is in a beautiful part of the state [of Indiana],” says Tina Peterson, CEO of ROI, who oversees eleven counties in the Indiana Uplands region. “There is a substantial opportunity given the incredible assets of the region, but there isn’t strong post-secondary achievement [data]. We asked the question, ‘How are we going to help this region fill its potential?’”

As part of the Ready Schools planning process, community stakeholders convened to identify challenges for their area and create a systematic approach to prepare for their next steps. One segment of their research was to visit Cardinal Manufacturing in Strum, Wisconsin, a community similar in size to Loogootee in the size of both school and community. Of the Ready Schools ideas proposed for LHS, the winning concept was to create Lion Manufacturing, a student-run business.

“It is always scary to start something new in education. It can be a daunting task. The best advice we received from our research is that you will never be completely ready – no matter how much you prepare,” says Chip Mehaffey, Superintendent of Loogootee Schools. “At some point, you just have to jump in and get started!”

Loogootee High School’s synergistic hiring of Chris Woodard also helped move the concept of a student-run business into a reality. In the summer of 2017, Woodard was hired to teach engineering and technology as part of the Project Lead the Way curriculum. He was also able to bring 20 years of manufacturing management experience.

“Since college, I wanted to work in the industry and teach, and I made the transition to teaching in 2017,” says Chris Woodard, who worked as a student in a student-run business while earning an Industrial Technology degree at California State University Chico.

A pivotal partner for Lion Manufacturing is Loughmiller Machine Tool & Design. Both Jason and Pam Loughmiller are graduates of Loogootee High School and their office is down the street. Loughmiller has donated more than just equipment to the Lion program, they have donated customers.

The school launched an effort to transform its 1960s-era “shop” classroom space. LHS had a HAAS Mini-mill, a computerized machine (CNC), donated in 2006. It had not run since 2010 when the relevant instructor left. During 2010 – 2017, the CNC machine remained dormant. The Loughmillers worked with Mitch Mathias (of L-Machine) during the 2018 summer and were successful in getting the HAAS mini-mill functional. It was programmed to make a specific part – LM2800 – which is a part sold to the U.S. Navy for its radar systems, and which is meaningful to the Radius region because of the radar work done at Crane.

“During the transformation, many old pieces of equipment that were no longer usable were discarded and the area received a fresh facelift,” adds Mehaffey.  “Students were thrilled to be a part of that process.”

The Lion Manufacturing area in the school – the old shop classroom – now looks up-to-date and more like a professional business environment for manufacturing. There are eight welding stations for Lion Manufacturing growth opportunities for their business. A second CNC machine and a laser engraving machine will soon be added.

In the fall of 2018, three students were recruited to run production on the machine. By spring semester (2019), Lion added two additional production team members and three office staff. All of the positions are students.

“Loughmiller Machine Tool & Design is a wonderful corporate partner with Loogootee High School,” says Woodard. “We love them. They are community-oriented, heavily involved, and a great partner.”

“I was sold when I saw Cardinal Manufacturing in Wisconsin,” says Pam Loughmiller, whose company has consistently supported the shop program at LHS. “We [Loogootee] have a lot of similarities and I knew that we could make this happen in our school. With an emphasis leaning towards trades, it only makes sense for us to be the ones to help facilitate success for Lion Manufacturing.”

The experience for the students is unmatched. During their first year, Lion Manufacturing hired students to work in other areas in addition to the machinists. Students from the business department were hired to run the office of Lion Manufacturing. Their responsibilities included accounts receivable, billing, marketing, and public relations. Students from the Art Department were also hired to develop a logo for the business and to create clothing and apparel.

The students are experiencing problem-based learning, as there are no answers in a book on how to solve a specific issue. Students must figure out how to fix the machine if there is a power outage or how to fix drill bits. They must diagnose, solve, and implement a solution.

“They are running a business,” says Woodard. “This learning model provides real-world experience. This is less about building parts than it is about building students into becoming good people.”

Becca Hollaway, a recent graduate, served as the Director of Marketing and Communications for Lion Manufacturing. During her senior year, she planned an open house, organized tours, coordinated all elements of Lion Manufacturing events.

“I did more work with Lion Manufacturing than I thought I would be doing,” says Hollaway, who be will a marketing major in the fall at the University of Indianapolis. “There is no other area opportunity [in Loogootee] that would have given me the same experience. Lion helped me discover what I want to do after high school. It’s definitely a useful program at school!”

The tenets for the Ready Schools initiative include: collaboration, immersive student engagement, a shared vision with the community, and the goal of prosperity for the area. These best practices align with economic development.

“We have incredible schools, dedicated educators, and wonderful young people who are full of potential, yet we fail to recognize this, as rural communities are often overlooked,” says Peterson. “The Loogootee community has created a model that has an incredible capacity for success.  These young people will develop soft skills, work as a team that will serve them well in life, and what they have created in their small community is something replicable across the country.”

Crane Flexible Manufacturing Complex Nears Completion

By: Matt Craig, Director of Crane Community Support for Radius Indiana

Crane originally began as an ammunition depot site to produce and manufacture munitions in 1941, now nearly 80 years later, manufacturing at Crane continues to be prominent economic driver — though the processes and technologies have greatly evolved.

Our entire region has a rich history of manufacturing. Manufacturing makes up 32 percent of our workforce with more than 20,000 people employed in the industry. When one thinks manufacturing, Jasper Engines, Kimball, and General Motors probably come to mind, but advanced manufacturing is thriving at Crane Army Ammunition Activity as well.

Crane Army Ammunition Activity is the second-largest tenant of NSA Crane and employs 700 over people. Crane Army works to safely receive, inspect, store, ship, renovate, demilitarize, and manufacture conventional ammunition, missiles, and related components to support the Army and Joint Force readiness. It occupies over 51,000 acres of land and 4.8 million square feet in storage and manufacturing buildings.

Crane Army’s new Crane Flexible Manufacturing Complex (CFMC) is a multi-million dollar investment currently under construction at the base, and is part of the Army’s modernization strategy to upgrade existing workplaces and increase efficiency. The total site for the complex is around 46 acres with three main, co-located, production buildings and a variety of support buildings dedicated to advanced manufacturing. After renovations are completed, the upgrades will give production lines and projects improved production rates.

The CFMC will initially provide the manufacturing space to service the M1122 artillery round, which processes old conventional munition rounds and reuses the shells to create low-cost training projectiles for the Army. Previously, this type of job had to be completed in several separate areas, and now can all be done at the CFMC. With the entire production process modernized, operations will have a better flow from start to finish. Previously, Crane Army was forced to rely on trucks to move production from one point to another, slowing down completion times and increasing logistics costs.

This type of investment is a testament to the strength of manufacturing in our region and will continue to provide jobs for the skilled workforce that helps drive our economy. Production at CFMC is slated to be fully functional and operational by 2019, and a ribbon cutting will be held when the complex is nearing completion.

Crane’s Innovation Program Expands Research and Opportunities for the Region

By: Matt Craig, Director of Crane Community Support for Radius Indiana

As the state’s only federal laboratory, Naval Surface Warfare Center, Crane Division is entrusted to develop the high-level technologies that are critical to our military missions, and to provide superior capabilities for our service men and women.

Each year, NSWC Crane goes above and beyond its mission requirements to further capitalize on the research and development being conducted by some of the best and brightest scientists and engineers in the field. Through a $14 million annual program from the National Defense Authorization Act Section 219, Crane is able to fund additional research, technology transition and workforce development programs that can impact overall scientific research and also can make a difference to our region.

Crane’s Naval Innovative Science and Engineering (NISE) program panel was established to select which programs and projects will receive funding from the program each year. The panel recently met to review the 142 proposals submitted this year, and selected 47 finalists to present and answer questions on their project. Each project is judged on key factors such as alignment with Navy and base goals, importance, workforce impact, and collaboration with existing Crane and Navy divisions and departments.

Project ranging from microelectronics to advanced countermeasures deployment were among those selected for funding this year, but another program, in collaboration with Bloomington High School South, shows the reach and scope of the program that can make a local impact.

Through this program, students from the BHHS robotics team will design a mobile and remotely controlled robotic base structure to meet government detailed specifications. The final product the students create will be used by the U.S. Government for technology demonstration and evaluation.

The intention of this mutually beneficial collaboration is to inspire and support a new generation with the challenges of the ever-growing field of robotics. While the Crane team is inspired by the fresh perspective the students bring, the students will benefit from their Crane connection as they enter the workforce and pursue a career in technology.

The NISE program is a game changer for Crane in that it provides an internal research and development program and affords the flexibility to conduct research that might otherwise not be funded. Projects selected by the NISE panel pair senior scientists with junior scientists, and in the case of BHHS, student participants; creating the building blocks of future scientists and strengthening our Radius Indiana region. Radius applauds Crane and all the forward thinkers, entrepreneurs and inventors who will lead our next generation workforce.

Crane’s Impact on Our Region

By: Matt Craig, Director of Crane Community

There has long been a military presence in the southwestern area of Indiana, which consists of Naval Support Activity Crane, (NSA Crane), the nation’s third-largest naval base. Since 1941, Crane has heeded the call of the United States of America by serving our nation’s Soldiers, Sailors, Airmen and Marines.

Over that time Crane has evolved from its early beginnings focused on the production of munitions and flares, to a regional hub of advanced technology focused on some of our nation’s most pressing technology needs.

Recently, Radius had the opportunity to assess the annual economic impact of Crane for 2017. Its impact is nothing short of incredible, if evidenced only by the $406.4 million Crane pays to its civilian and contractor employees.

That nearly half a billion is injected into our region, with the economic multiplier effect of that certainly exceeding $1 billion. That $406.4 million is paid to a 5500-strong workforce who own homes, rent apartments, buy cars, shop and dine, along with their families.

Monroe County is loaded with 1359 Crane workers, accounting for $107.3 million in direct impact. An additional 412 jobs are created to support those employees, totaling 1,771 jobs with a $283 million economic impact.

With 1,073 workers located in Lawrence County, there is an impact of $79.5 million, a further benefit of 274 jobs, which help produce a complete effect of 1347 jobs and $199 million in economic activity.

Crane’s economic impact goes beyond its civilian and contractor payroll. While we didn’t have all the local supplies and various public works contracts available for analysis, it is notable that over 6,100 contracts at one command exceeded $1.1 billion in awards. When you add it all up, Crane generated over $2.1 billion in impact, for just one year.

We hope that the workforce will continue to grow in the coming years. Today Naval Surface Warfare Center Crane’s civilian workforce stands 3,255 strong, larger than at any point in the past three decades.  With over 900 employees becoming eligible for retirement in the next five years, we believe there will be many new opportunities for the community. Our region needs to ensure there is a workforce available to replace those retiring in the coming years.

This helps put in perspective why anytime Crane has faced potential threats of closure through the Base Realignment and Closure Commission the community has rallied and fought to ensure Crane’s survival. Ultimately, Crane has been able to avoid an economically catastrophic closure because of the quality and importance of the work it does. Much of the credit goes to the men and women who work together to ensure Crane fulfills its vital missions.

Keeping the Radius Indiana Region Competitive

By: Jeff Quyle, President and CEO

Earlier this year, the 11 countries who continued to negotiate the Trans-Pacific Partnership announced plans to move on without the United States. Those countries’ government and business leaders concluded that increased trade among their nations would promote positive economic growth among the nations that border the Pacific Ocean.  

That part of the globe is one of the fastest growing regions on the planet and a major source of new business investment into communities in the United States.  It is also a group of nations that buy a great deal of valuable goods from companies in the United States, including many here in Indiana.

According to the latest data, more than 8,000 Indiana firms exported nearly $47 billion of goods and services to customers around the world—making Indiana the 15th largest exporting state in the nation. Asian countries account for two out of our four largest export markets, and Japan sits alone as the top foreign investor in Indiana.

Currently, trade supports more than 800,000 jobs in Indiana, about one in four, and Indiana’s dependence on global trade continues to grow. Since 2009, Indiana goods exports—led by our world-class pharmaceutical, agriculture, and manufacturing industries—have spiked by 54 percent.

At the same time, more and more foreign firms are choosing to do business in Indiana. Since 2010, global businesses have invested here and grown their Hoosier-employment by more than 40 percent, reaching nearly 200,000 jobs, most of which are in the manufacturing sector. The average salary at a foreign company invested in Indiana is $80,000.

That is why Radius Indiana is heading to Japan for our first foreign trade mission this fall to highlight investment opportunities across the eight counties we represent. It is an exciting development made possible by global trade and the trade agreements that regulate it.

While complex, trade agreements serve a dual purpose—keeping our exports competitive and also making America an attractive destination for investment. Toyota’s Camry plant is the perfect example of this phenomenon—the carmaker built a factory in Indiana to manufacture cars for export around the globe.

However, America’s absence from the new standard for the Asia-pacific region risks disadvantaging our companies, goods, and workers by exposing products to higher tariffs than those produced elsewhere. Over time, increased costs could force companies to realign supply chains and reallocate resources to countries that qualify for the preferential treatment provided by these deals.

In short—jobs will move elsewhere to make products in places that can do so more efficiently, making Indiana and Hoosier-made products less competitive and undermining Radius’ efforts to attract investment and jobs.

If America is going to remain a competitive destination for global investment, we need to ensure that American-made products and know-how are on a level playing field.

To this end, the United States should continue to seek high-standard trade agreements that protect our workers and boast strong, enforceable rules. It’s good to see our leaders in Washington acknowledging this fact. In February, Senator Young joined with two dozen of his colleagues to urge President Trump to think about America’s involvement in the Trans-Pacific Partnership. America should reevaluate the deal and consider reentering it—on our terms.

Developments from recent weeks have made it clear that if Indiana wants to continue to attract investment—and the associated jobs—America must remain engaged on international trade.

Radius Indiana is proud to be working proactively at seeking foreign direct investment for our communities.  We believe that diversifying the investment and the economy here will make our communities stronger and more resilient through future economic cycles.

Radius Indiana Benchmarks Regional Advantages

By: Matt Craig
Director of Crane Community Support

Benchmarking is a process companies use to evaluate various aspects of their processes and results in comparison to best practice companies’ processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans to make improvements or adopt specific best practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to improve their practices.

The term benchmark originates from the chisel marks that surveyors made in stone structures, into which an angle-iron could be placed to form a “bench” for a leveling rod, thus ensuring that a leveling rod could be accurately repositioned in the same place in the future.

Benchmarking is mostly used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, or defects per unit of measure) resulting in a metric of performance that is then compared to others. In 1994, one of the first technical journals named “Benchmarking: An International Journal” was published.

In 2008, a comprehensive survey on benchmarking was commissioned by The Global Benchmarking Network, a network of benchmarking centers representing 22 countries.

1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of organizations) of 20 improvement tools, followed by SWOT analysis (strengths, weaknesses, opportunities, and threats) (72%), and Informal Benchmarking (68%). Performance Benchmarking was used by 49% and Best Practice Benchmarking by 39%.
2. The tools that were likely to increase in popularity the most over the next three years were Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking. Over 60% of organizations that were not currently using these tools indicated they were likely to use them in the next three years.

A recent Radius Indiana benchmarking effort was intended to compare our Region to some other regions that have had historical success in growing the federal employment base. By using gold standard Site Selector metrics, we anticipate being able to better set our own targets and learn from other regions. In this way, we learn how well the targets perform and, more importantly, the metrics that explain why these regions are successful.

In 2017, Radius contracted with Hickey & Associates LLC to collect and analyze data comparing the Radius region to four other regions that have a historically large federal employee presence. This Benchmarking case study was to address several common Site Selector metrics of Labor, Taxes, Real estate and Community factors.

The initial step in building the demographics matrix was identification and selection of the workforce categories to be compared.  Utilizing the Labor Department Standard Occupational Classification (SOC) categories as the source, 15 specific occupations were selected as the primary data vehicle for wages and population benchmarking. These occupations represent a broad mix present in many federal organizations that have a predominately civilian workforce.

With the labor categories set, it was now necessary to determine the regions for comparison.  Here, we were looking for regions of the United States that house a large number of federal government employees. We obtained a matrix of federal employment by state, by agency, from a file that was constructed by Governing Magazine, for an article in that same publication.  The source is indicated as the Office of Personnel Management (OPM).

Hickey & Associates and Radius parsed through the matrix in a qualitative/quantitative manner to select the best benchmarking regions. The OPM data showed that the vast majority of federal government workers applicable to our study reside in the Greater Washington DC Metropolitan Statistical Area (MSA), which is inclusive of the Northern Virginia and Southern Maryland Beltway regions. The selection process was repeated to select additional comparative MSA’s of Greater Chicago IL, San Diego CA; and Hampton Roads-Norfolk, VA.

The results of the benchmarking comparisons showed that the Radius region generated a 20%-40% savings in labor and other business climate expenses, versus these heritage federal government employment centers. Though labor availability was obviously less than the heritage federal government employment centers, analysis showed that there is ample volume to service a significant growth in federal government employment in the Radius region.

Matt Craig, Director of Crane Community Support

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