For a modern business to succeed, they need data - and lots of it. Business decisions are no longer made in a vacuum; they're based on extensive analysis of key performance indicators and sales forecasting. Unfortunately, too often, these forecasts leave out a very critical part of the picture: high-level economic analysis of the target regions.
To address this deficiency, businesses are increasingly embracing economic development dashboards as part of their standard analysis package. Economic development dashboards were originally developed as tools for governments to understand the impact of their policies, but now, they are proving to be just as useful for businesses looking for the most accurate possible economic forecasts.
The Problem: Can Your Target Market Support Your Product Strategies?
It's all too easy for a business to develop tunnel vision with regards to their target markets and regions, focused entirely on their own strategies as well as the strategies of their competitors. When larger economic matters are considered, it's typically filtered entirely through whichever news sources the planners personally favor. This can easily create false impressions about the economic situation, especially if those news sources are partisan in one way or the other.
Businesses can't let political rhetoric influence their decisions. They need hard data about the economy, not secondhand spun information from talking heads with other agendas.
Economic development dashboards prevent this from happening. By pulling data from hundreds of verified public and semi-public sources, they can compile a far more accurate economic picture than what's presented in the media. This information can be fine-tuned to focus on the economic KPIs relevant to your business, while still adapting to secondary and tertiary factors which can still affect the economy.
By developing a big-picture, real-world look at economics, your business can proceed with its plans knowing that the target markets and regions will be able to support the initiative.
Adapting Economic Dashboards for Business Use
Economic development dashboards originally came about for governments to gauge the impact of their policies and predict outcomes. So, some adaptation is needed for them to work within a business environment.
The most important element is adapting the information displayed to fit the needs of your business. This can include information such as:
- Granular neighborhood-level demographic data
- Consumer employment and spending levels
- Consumer movement into and out of the target region
- Outside entities investing in the target region
- Government spending and initiatives in the region
- Amount of new construction (always a good sign of growth)
- Foreign trade, if relevant
- Spending and investments in industries adjacent or connected to your own
In some cases, it's possible to add public data to your existing dashboards without having to invest in specialized solutions. For example, the Federal Reserve Bank of St. Louis hosts the FRED Database, a highly detailed and entirely free database of economic information from around the country, compiled from over 100 sources. FRED even has its own Excel plug-in, which again is free, allowing it to be integrated quickly and easily into your spreadsheets.
In addition, many news reports and "think tank" analyses pull their data from public sources. Even if the source itself seems biased, there's a good chance they're still basing their conclusions on solid data. Ignore their conclusions, find the source, and use that data for yourself.
Also, while you are likely already paying attention to the public filings of your competitors, take note of the data sources they mention in those filings and reports. If your competition is basing its decisions on a particular source, you should investigate it as well. That source might have valid information you've overlooked... or you might spot deficiencies that could be leading your competition off-track, opening up opportunities to disadvantage them.
Understand, there will be some need to adapt these data sources to your own uses. They won't be business-friendly, but with smart implementation, their data can still be leveraged to your benefit.
Investing In All-In-One Economic Dashboard Solutions
The other alternative is working with a company that specializes in economic dashboards. They will often have access to even deeper data than public sources or have specialized tools set up to predict the large-scale impact of projects. For example, say an investment firm is considering the construction of a business park - what effect will that have on the local economy overall? Specialized tools can answer such questions.
Whether a business chooses to cultivate and integrate their own data sources or choose a third-party vendor for specialized services, an economic development dashboard will be a necessary tool for businesses going forward. Knowledge is power, and they are currently one of the best sources of that power.