Sources of Regional Growth in Non-Metro Appalachia 

Vol. 4 Economic Development Assessment Tools and 

Study Conclusions for Identifying Sources of Growth 

Prepared for the Appalachian Regional Commission 

Prepared by: 

Economic Development Research Group, Inc. 

Revised 2007 
Vol.4 Economic Development Assessment Tools

SOURCES OF GROWTH PROJECT

The Sources of Growth project is part of a series of research efforts funded by the Appalachian 

Regional Commission to improve our understanding of factors affecting economic growth in 

rural and distressed areas. As stated in the Volume 1 Introduction, “the starting premise of 

this project is that there can multiple paths that an area can pursue in successfully enhancing 

job and income creation. They may build on natural resources, cultural resources, human 

resources, local amenities, institutional facilities or location advantages. The resulting 

direction of economic growth may involve manufacturing or supply chain development, 

resource extraction or tourism development, educational development or trade center 

development.” This research is intended to provide a basis of information that can ultimately

be useful for enhancing the effectiveness of policies and tools aimed at improving the region’s

economic development. 

This is Volume 4 in a series of reports prepared as part of this project: 

• Executive Summary –synthesis of findings from all work products related to the 

study’s four main research components. 

• Volume 1, Project Background and Prior Research on Economic Growth Paths – 

study objectives, characteristics of non-metro Appalachian counties, classification of 

economic development growth paths, and synopsis of white paper findings on theory

relating to economic development growth paths. 

• Volume 2, Case Studies of Local Economic Development Growth Processes –

findings related to growth paths as observed for selected case studies covering 

manufacturing industry specialization clusters, supply chain-based development,

tourism-based development, advanced technology development, and diversification 

from resource-based economies. 

• Volume 3, Statistical Studies of Spatial Economic Relationships – findings from a 

series of econometric modeling and GIS-based analyses, focusing on roles of spatial 

adjacency, market access and transportation in determining economic growth and 

development of trade centers. 

• Volume 4, Economic Development Assessment Tools & Study Conclusions –

description of new and updated tools available to ARC and its Local Development 

Districts to assess economic development opportunities and potential directions for 

economic growth. 

• Appendices – (A) Spatial Analysis of Economic Health, (B) Economic Analysis of 

Hub-Spoke Relationships, (C) White Papers on Economic Growth Theories, (D) 

Literature Review of Empirical Studies on Spatial Influences in Economic 

Development.

Sources of Growth in Non-Metro Appalachia 
Vol.4 Economic Development Assessment Tools 

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i 

1 INTRODUCTION..........................................................................................................................1

1.1 OVERVIEW: FROM RESEARCH TO ACTION...............................................................................1

1.2 ARC ROLE IN DEVELOPING ECONOMIC TOOLS.......................................................................2

1.3 NEED FOR ECONOMIC ASSESSMENT TOOLS.............................................................................3

1.4 PITFALLS IN USING ECONOMIC TOOLS ....................................................................................4

2 OVERVIEW OF LEAP.................................................................................................................7

2.1 LEAP STRUCTURE ..................................................................................................................7

2.2 ELEMENTS OF INTEGRATED EVALUATION...............................................................................9

2.3 LEAP USES FOR APPALACHIAN GROWTH.............................................................................13

3 USE OF FINDINGS FROM SOURCES OF GROWTH PROJECT ......................................16

3.1 ENHANCING ANALYTIC CAPABILITIES ..................................................................................16

3.2 TRADE CENTER DEVELOPMENT PATHS .................................................................................18

3.3 INDUSTRY AGGLOMERATION CLUSTER PATHS......................................................................19

3.4 SUPPLY-CHAIN (DISPERSAL) PATHS .....................................................................................21

3.5 AMENITY & CULTURAL ASSET GROWTH PATHS...................................................................22

3.6 LEARNING AND TECHNOLOGY GROWTH PATHS ....................................................................24

3.7 NATURAL RESOURCE & OTHER GROWTH PATHS..................................................................26

3.8 SUPPORTING LOCAL ECONOMIC DEVELOPMENT ...................................................................27

4 CONCLUSIONS FROM THE STUDY OF SOURCES OF GROWTH.................................28

4.1 LESSONS LEARNED FROM THE COMPREHENSIVE EXAMINATION ...........................................28

4.2 LESSONS FROM THE CASE STUDIES .......................................................................................28

4.3 KEY FINDINGS FROM EMPIRICAL STUDIES ............................................................................29

4.4 IMPLEMENTING FINDINGS FOR STRATEGY PLANNING ...........................................................33

4.5 FUTURE STUDY DIRECTIONS ON NON-METRO GROWTH PROCESSES .....................................34

Sources of Growth in Non-Metro Appalachia 
Vol.4 Economic Development Assessment Tools

ACKNOWLEDGEMENTS

This volume was authored by Economic Development Research Group, Inc. Other volumes in

this series were also co-authored by staff of Regional Technology Strategies, Inc. and by

faculty and graduate students in the Dept. of Urban Studies & Planning at the Massachusetts 

Institute of Technology. 

The Sources of Growth project involved a team of researchers including: 

• Economic Development Research Group, Inc. (EDRG) – Lisa Petraglia (Project 

Director), Glen Weisbrod (Principal-in-Charge) and Teresa Lynch, with research

support from Tyler Comings, Brett Piercy and Susan Moses; 

• Regional Technology Strategies, Inc. (RTS) –Stuart Rosenfeld, Phil Psilos and Dan 

Broun; 

• Massachusetts Institute of Technology, Department of Urban Studies & 

Planning (MIT-DUSP) – Prof. Karen R. Polenske, Prof. Joseph Ferreira, Jr. 

and Ayman Ismail, with research support from Tan Zhijun, Isabelle Xin Li, 

Yi Xu and Leigh Graham. 

The project also benefited from the expertise of outside policy and research experts who 

reviewed documents, participated in project meetings and provided technical guidance: Deb 

Markley (Co-Director of the Center for Rural Entrepreneurship, a Rural Policy Research 

Institute), Joseph Cortwright (Vice-President of Impresa Consulting), Ken Poole (Executive 

Director of ACCRA: The Council for Community and Economic Research), David Freshwater 

(Professor of Agricultural Economics and Public Policy at the University of Kentucky), David 

McGranahan and Luc Anselin (Professor. Dept. of Agriculture & Consumer Affairs and 

Regional Economics Applications Laboratory at the University of Illinois, UrbanaChampaign). 

Overall project direction and oversight was provided by Dr. Greg Bischak of the Appalachian 

Regional Commission, whose wide range of research experience served to focus the project 

team on the development of policy applications. Important insight and suggestions were also 

provided by officials of the Appalachian Regional Commission who participated in a day-long 

symposium with the project team, including Thomas Hunter (executive director of ARC, Ann 

Pope (federal co-chair of ARC) and Rick Peltz (alternate federal co-chair). In addition, Ken 

Wester and Jason Wang of ARC assisted the project team in collecting and assembling 

transportation and geographic data. 

Sources of Growth in Non-Metro Appalachia page i
Vol.4 Economic Development Assessment Tools Ch.1 Introduction

1 INTRODUCTION 

1.1 Overview: From Research to Action 

The Appalachian Regional Commission (ARC) is recognized in the field of econom

development, not only for its program investments that have been shown to create 

jobs, but also for its research aimed at improving the effectiveness of its economic

development efforts. The Sources of Growth project is part of that resear

ic 

ch effort

imed at improving our understanding of factors affecting economic distress and 

n in-

,

ough, some growth paths are more likely to succeed than others. Hence, successful 

to identify the relevant growth paths. 

a

identifying strategies that can enhance economic growth in the region. 

One of the most important elements of the Sources of Growth project is that it aims to 

illuminate the range of potential economic growth paths that can be relevant for rural 

areas (Exhibit 1-1). It avoids the “urban bias” that exists when people focus just o

vogue concepts such as technology-driven clusters. Instead, it lays out multiple paths

that areas can potentially pursue to create jobs and income. For any specific area

th

economic development requires analysis

Exhibit 1-1 Alternative Growth Paths 

Assetbased 

Strategy

Performance Evaluation – gauging progress on a growth path

Given Local Conditions – Resources, Constraints and Opportunities

Decision Criteria on Most Appropriate Growth Path(s) to Pursue

Goal – Improved Economic Development

Supply

Chain

Strategy

Learningbased 

Strategy

Agglomeration

Strategy

Trade 

Center 

Strategy

s

ools that

can be used by ARC’s Local Development Districts (LDDs) for assessing their 

economic development opportunities and developing growth path strategies. 

Sources of Growth in Non-Metro Appalachia page 1

The prior three volumes describe theory, prior research, case studies and empirical

analysis of economic growth factors -- all generating insight and implications for local 

policy initiatives in Appalachia’s non-metro counties, where economic distress i

greatest. This volume discusses our ability to use those findings to improve t
Vol.4 Economic Development Assessment Tools Ch.1 Introduction

1.2 ARC Role in Developing Economic Tools 

ARC-Opps Spreadsheet Tools. The ARC started providing tools for enhancing 

economic development targeting and strategy when it released the highway 

opportunities model: ARC-OPPS in March 2001.1

 That system of analysis tools was 

designed to help ARC’s Local Development Districts identify the type of business 

growth opportunities that come along when areas gain new or improved highway 

access. It was motivated by concern that local economic development agencies were 

often not fully prepared to identify or pursue new opportunities created when 

segments of the Appalachian Development Highway System (ADHS) were 

completed. ARC-OPPS was successfully used for various ADHS links such as 

Appalachian Corridor “V” in Mississippi and Appalachian Corridor “T” in New York 

State. However, this system also created interest in expansion of developing broader 

tools to assess economic development targeting opportunities for regions that did not 

have new highway openings. 

ARC-LEAP Spreadsheet Tools. In January 2004 the Appalachian Regional 

Commission (ARC) issued the report and software tool known as ARC-LEAP, the

Local Economic Assessment Package.

2

 Building on the demands of the ARC’s Local 

Development Districts (LDDs), this product provided the LDDs with a robust package 

of economic development assessment tools that could assist development practitioners 

in their local economic planning efforts. This package superseded ARC-OPPS by 

covering the economic and employment impacts of other types of development 

projects, including water and sewer projects, industrial site development, workforce 

development, and transportation improvements. 

ARC-LEAP was widely distributed among Appalachian state and local government 

economic development programs. The Southern Tier West Regional Planning Council 

in New York was an early adopter of the LEAP package to evaluate how 

transportation accessibility affected economic development opportunities in his region, 

and to assess development options for distribution centers and the lodging sector. 

Another example was the First Development District of Tennessee, which engaged in 

a strategic planning process utilizing the capabilities of LEAP to identify key 

development opportunities for the region. The Middle Georgia Regional Development 

Center used LEAP as the foundation for a larger effort to develop a regional economic 

diversification strategy plan. It was also used for Tennessee DOT’s evaluation of the 

potential economic development benefits of completing Appalachian Corridor “J”. 

 

1 Handbook for Assessing Economic Opportunities from the Completion of Appalachian Development Highways, 

by Economic Development Research Group with the assistance of Cambridge Systematics, March 2001. 

Available at http://www.arc.gov/index.do?nodeId=709 2 Handbook: Assessing Local Economic Development Opportunities with ARC-LEAP, Appalachian Regional 

Commission Local Economic Assessment Package, by Economic Development Research Group, January 2004. 

Available at http://www.arc.gov/index.do?nodeId=2203 

Sources of Growth in Non-Metro Appalachia page 2
Vol.4 Economic Development Assessment Tools Ch.1 Introduction

Recognition Awards. During the 2005-2006 period, LEAP began earning national 

recognition and awards from the IEDC - International Economic Development 

Council and ACCRA – the Council for Community and Economic Research. Both of 

these recognition awards noted the unique capabilities of LEAP in enabling local 

economic development agencies to effectively assess their targeting strategy options, 

and both were given jointly to ARC and Economic Development Research Group 

(EDRG) in recognition of their partnership in its development. 

Web-Tools: EDR-LEAP®. While the LEAP spreadsheet-based toolbox was gaining 

critical success, its use was limited to agencies that had the staff time and resources to

collect all of the information required to use it. In response to this need, EDRG 

developed a new system that overcame this problem by having: (a) essentially all of

the data already collected and immediately available via a dynamic database and 

geographic information system, and (b) the entire system available on-line and directly 

usable through any web browser, with help screens for new users. ARC made the 

system available to Appalachian Local Development Districts and Appalachian State 

Economic Development Departments. (It is available to other users through EDRG.3

 ) 

The initial version of EDR-LEAP® assessed local economic performance gaps, 

barriers holding back further development, business attraction target opportunities and 

effects of program or policy initiatives. It also included some evaluation of business 

cluster opportunities. However, it did not fully distinguish the alternative growth 

paths that can be important for any region, but particularly for rural districts where 

there is not necessarily a critical mass of population and employment to support 

business clusters. Findings from the Sources of Growth project -- including literature 

review, case studies and empirical studies – now provide a base for further enhancing 

the breadth of analysis and use of this tool. 

1.3 Need for Economic Assessment Tools 

The concept of local economic assessment is not new. It goes back at least forty 

years, with “economic base analysis” and its set of ratio calculations to identify their 

economic performance strengths and weaknesses.4

 These methods started appearing 

in guides for economic development agencies in the 1970s. 

In the later 1980s and most of the 1990s, there was also a flurry of research ranking 

business site location factors. Today, there is now a strong consensus on the nature of 

the key business location factors, which represent local competitiveness factors for 

economic developers. Those factors are shown in Exhibit 1-2. 

Together, the evaluation of economic performance (via economic base analysis) and 

the evaluation of economic competitiveness factors (via analysis of site location 

 

3

 See www.edrgroup.com/leap for further information and links to contact information. 

4

 This includes LQ (Location Quotient), S (Shift-Share) and VAMP (value added minus payroll per employee). 

Sources of Growth in Non-Metro Appalachia page 3
Vol.4 Economic Development Assessment Tools Ch.1 Introduction

factors) provided a foundation for guides such as Economic Development Planning, 

International Economic Development Council (2002). 

Exhibit 1-2. Business Site Location Factors 5

 

 Suitability of Business Parks, Land and Buildings 

 Scale and Skills of the Labor Market --Workforce 

 Scale and Socioeconomic Characteristics of the Consumer Base 

 Availability and Quality of Infrastructure -- roads, power, water/sewer, broadband 

telecom, intermodal transportation terminals and connections 

 Access to Markets, as well as to airports, marine ports and intermodal rail terminals 

 Business Support services & business climate – job training, regulations, business 

organizations 

 Quality of life -- including climate, arts and culture, recreation, and school quality

 Cost of doing business – including labor, utilities, infrastructure and taxes 

1.4 Pitfalls in Using Economic Tools 

Note: Most of this part 1.4 text is drawn from a separate article, “New Tools for 

Economic Development Targeting and Strategy: Applying a Local Economic 

Assessment Package” by Glen Weisbrod and Brett Piercy, 2006. publication pending. 

The full value of an integrated evaluation and targeting system such as LEAP comes 

from its ability to offer a coordinated toolkit that effectively support economic 

development targeting and strategy development. As a coordinated toolkit, it avoids 

the common limitations and pitfalls that come from reliance on simpler methods or 

bundles of separate tools. Examples of these problems include the following: 

• While area-wide industry mix patterns and trends are easy to assess, most 

economic developers understand that such information is of limited value 

unless it can be compared to relevant neighbor and competitor areas to identify 

performance gaps, and then linked to business competitiveness factors to help 

explain those results. 

The problem of over-reliance on industry patterns and trends is that they can 

lead to a naïve conclusion that already strong industries represent clusters that 

 

5

 Industrial site location factors are widely recognized in the field of economic development today, though most of 

the research to identify them took place over the prior decade. Sources include: (1) Portland 2002: Strategy for

Economic Vitality, Appendix 2-3: “Location Factors,” 2002, (2) Sloagett, Gordon and Mike Woods. “Critical

Factors in Attracting New Business and Industry in Oklahoma. Oklahoma Cooperative Extension Service; (3) 

Kotler, Philip et al. Marketing Places. The Free Press, 1993; (4) Lyne, Jack, “Quality of Life Factors Dominate 

Many Facility Location Decisions,” Site Selection Handbook, August 1988, and (5) Finkle, Jeffrey. “Developing 

Strategies for Economic Stability and Growth,” Council for Urban Economic Development, 1997. For quality

of life, also see (6) Segedy, James. “How Important is Quality of Life in Location Decisions and Local

Economic Development” in Bingham and Mier (Eds.) Dilemmas of Urban Economic Development, Sage, 1997. 

Sources of Growth in Non-Metro Appalachia page 4
Vol.4 Economic Development Assessment Tools Ch.1 Introduction

 

should be the top priorities for further recruitment. More appropriately, 

economic development strategies should focus on identifying existing gaps and 

missed opportunities, desired growth paths and the steps needed to overcome 

barriers now holding back achievement of those opportunities. 

• Measuring cost differences among regions is a straightforward process, and the 

nature of those differences forms a core of economic simulation and 

forecasting models. Those models focus on estimating dollar flows and cost 

differences to explain how industry growth and investment moves among 

areas. However, most economic developers understand that business location 

requirements also depend on various non-cost (size, quality and access) factors 

that are at least as important as cost in determining competitiveness and 

resulting industry growth and investment shifts. 

The problem of over-reliance on cost comparisons is that they can lead to a 

naïve conclusion that local economic development strategy should focus just 

on cost incentives to attract economic growth. Often, economic development 

strategies need to focus more on identifying opportunities to overcome gaps in 

transportation facilities, job training, industrial park facilities and/or business 

support services as ways to enhance quality. 

• Economic forecasting and impact models can show how a given type of new 

business will generate additional flows of dollars to suppliers. However, most 

economic developers understand that part of their job is to make economic 

forecasting and impact models be wrong. That is because economic 

forecasting models usually assume no change in competitiveness factors aside 

from costs, while economic developers may be working hard to make quality 

improvements in local facilities, job training or support services. In addition, 

economic impact calculations assume that dollars will “leak” out of the area if 

there are currently no local suppliers to serve a major new industry, while 

economic developers may be working hard to develop local supply chains that 

can keep those dollars in the local economy.

6

The problem of reliance on economic forecasts and impact models is that they 

6

 An economic impact model applied before the opening of the BMW assembly plant in South Carolina

would normally have calculated that the flow of dollars to auto parts suppliers would go mostly out of 

state, since there was no major auto parts industry in the state at that time. It would not have known 

that the cooperative efforts of BMW and the state would subsequently lead to the attraction of 49 new 

auto parts suppliers, creating thousands of additional jobs. 

Sources of Growth in Non-Metro Appalachia page 5
Vol.4 Economic Development Assessment Tools Ch.1 Introduction

can lead to a pessimistic view of future prospects for local economic 

development, and wrong priorities for industry growth and attraction targets. 

More appropriately, economic developers need to take advantage of 

opportunities to enhance local supplier networks as a way of enlarging the 

indirect benefits of business expansion and attraction efforts. 

Sources of Growth in Non-Metro Appalachia page 6
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

2 OVERVIEW OF LEAP 

2.1 LEAP Structure 

In recognition of these shortcomings, the Appalachian Regional Commission 

supported development of the “Local Economic Assessment Package” as a bundle of

tools to give economic developers the ability to diagnose local competitive position, 

select appropriate targets and design economic development targeting strategies that 

build on strengths and minimize weaknesses. The resulting package of tools follow

the evaluation process s

s

upporting IEDC’s Economic Development Planning guide and 

commended targets and policy priorities. It is designed specifically to avoid the 

ss 

s). That provides a basis for 

etermining (c) potentially feasible business growth/attraction targets and actions

nee

•

competing areas to identify leading & lagging industries, performance gaps 

• es

,

to

relationships to identify the

key factors that are constraining local attractiveness for each industry, and

re

pitfalls just discussed. 

The structure of this approach is shown in Figure 2. It revolves around three steps or

modules, shown by the shaded three-dimensional boxes: (1) Economic Assessment, 

(2) Targeting Diagnostics and (3) Policy Analysis. They implement the three-phase 

evaluation process that was previously discussed to provide information for the IEDC 

economic development planning process. Most importantly, it avoids or minimizes the

pitfalls of incomplete and inappropriate conclusions by making the critical connection

between (a) local economic performance results to date and (b) local competitivene

factors (costs, quality, access and market scale difference

d

ded to make them possible. The steps are as follows: 

Economic Base Assessment – This step develops profiles of business mix and

performance trends by industry, and benchmarks them against adjacent or

and business types with the greatest local growth or attraction potential. 

Targeting Diagnostics – This step rates competitive strengths and weakness

of the area in terms of various costs (e.g., utilities, housing g, land, labor

taxes), qualities (worker skills, industrial/office park amenities), access (

airports, highways, railroads) and supporting infrastructure (broadband, 

business resources). It uses a knowledge base of industry requirements, 

thresholds for business location, and inter-industry

potentially achievable business attraction targets. 

Sources of Growth in Non-Metro Appalachia page 7
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

•

itive 

or negative changes in labor skills training, industrial/office park amenities, 

land availability, broa tation accessibility. It 

provides a basis for prioritizing futu

ice

stries

Policy Analysis – This step allows users to assess how changes in economic 

development conditions can affect the size and nature of potential future 

business attraction. It estimates changes in job growth associated with pos

dband access, and/or transpor

re economic development initiatives. 

Figure 2. LEAP Structure 

An interesting aspect of this integrated system design is that it is flexible in the cho

of economic development targeting objectives, as the assessment of gaps, 

opportunities and targets can be viewed in terms of (a) job creation, (b) income

generation, (c) maximizing local value added or (d) increasing business sales. The 

choice can make a big difference in findings and recommendations, as some indu

Define Study 

& Comparison

Areas 

EDR-LEAP Local Economic 

Assessment Package

Change in Primary & Secondary

Opportunities for Business Attraction

Define

Alternative

Scenarios 

Industry

Trends

Economic Performance Gap Screener

Primary Opportunities for Business

Development & Attraction 

Industry

Requirements 

Define Local 

Ratings: 

Cost, Availability,

Access, Quality 

Industry

Forecasts

Inter-Industry

Relationships

suppliers, cluster,

dispersion Secondary Opportunities for Supporting

Business Attraction

Economic Base: Patterns & Trends 

Diagnosis: Local Adequacy workforce, materials, industry facilities,

infrastructure, technologies, int. trade,

transport terminals, reliability

Factors Holding Back Business Growth

Scenarios: Change in Local Ratings

Sources of Growth in Non-Metro Appalachia page 8
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

oice of comparison areas for benchmarking, which can be adjacent 

reas, national or regional competitors, or other areas that will be linked by new 

use

tes

d enhance their economic development targeting efforts. Applications of 

have won national recognition awards from IEDC - the International Economic 

Development Council and ACCRA – the Council for Community and Economic 

ch.

7

are growing in business sales while jobs or effective salaries are being cut. It is also 

flexible in the ch

a

transportation corridor connections. That decision also depends on the purpose and

of the analysis. 

Recognizing its flexibility, this system has now been adopted by the Appalachian 

Regional Commission and distributed to its Local Development Districts in 13 sta

to support an

it

Resear

2.2 Elements of Integrated Evaluation 

Assessment of the Economy. As noted by economic development textbooks, the thre

principal tools that form the starting basis for economic base analysis are Location 

Quotient (business mix analysis), Shift Share (business trend analysis), and SWO

e

T

trengths, Weaknesses, Opportunities and Threats) analysis.8

 These techniques are 

gy

following instructions in regional economic textbooks. The 

ifficulties lie in (a) collecting data on dozens of industries at the appropriate level of 

gths

ll lead to totally different types 

f findings on local gaps than a comparison to state or national averages. Figure 3 is a 

raph generated by LEAP that illustrates a comparison of business cost factors in a 

tudy area relative to a user-defined comparison area. 

 

(S

not new and they often form part of Comprehensive Economic Development Strate

(CEDS) documents funded by the US Economic Development Administration.

Nor are these techniques inherently complicated. In fact, they can be done quickly 

with spreadsheets

d

detail, and then (b) making the right comparisons to extract findings on local stren

and weaknesses. 

This is one area where LEAP diverges from traditional analysis approaches. The 

traditional approach for economic base analysis has been to compare a local area 

against national patterns and trends. Economic models similarly also compare local

costs against national costs. The problem, of course, is that a rural region does not 

necessarily expect to compete against big metro regions for the same industries, nor 

does a lake recreation area expect to compete against mining or industrial centers. 

That is why a benchmarking approach, which compares local industry mix patterns 

and growth trends against relevant competing areas, wi

o

g

s

7

 ACCRA 2006 National Award for Applied Research; IEDC Honorable Mention for Research Studies, 2005 

8

 Bendavid-Val, Avrom. Regional and Local Economic Analysis for Practitioners, fourth edition. 1991. 

Sources of Growth in Non-Metro Appalachia page 9
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

Figure 3. Relative Cost Factor Comparison 

Targeting Diagnostics. The diagnostic phase of LEAP includes an assessment of

advantages and disadvantages for each industry in which there is a potential for further

business growth and attraction, as identified in the assessment phase. This set o

diagnostics id

local 

f

entifies “critical” and “important” weaknesses that need to be addressed 

 the area is to fulfill some of the growth potential identified in the local area 

a

ad on

uality and access factors can be at the core of economic 

ompetitiveness and addressing them can be critical to achieving success in business 

ssembly head on, as it attempts to 

cognize all of the major business location considerations that are important to 

eco m

•

y

n

if

assessment. 

A major problem holding back systematic analysis of economic development 

opportunities in the past has been difficulty pulling together information on just how

local area stacks up against competing areas in terms of various “competitiveness 

factors” -- which can range from very specific (such as tax and utility rates) to very 

vague (such as business climate and quality of life). Traditional economic models 

sidestep the problem by ignoring those non-dollar factors and concentrating inste

the more easily measured business output trends and costs. Yet economic developers 

know that these scale, q

c

growth and attraction. 

The LEAP approach takes this issue of information a

re

no ic developers. The solution is two pronged: 

Use of Broader Data Sources. Information on many factors that are not readily

available can in fact be obtained through an up-front research effort to tap 

proprietary databases, with costs greatly reduced if they are spread over man

users. That is done with an on-line version of LEAP, which includes measures 

for every US county of: (a) costs factors including labor, utilities, taxes and 

buildings, (b) size and quality factors including delivery markets and educatio

characteristics of the workforce accessible within a 40 minute drive, (c) access 

Sources of Growth in Non-Metro Appalachia page 10
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

inals, and (d) availability and magnitude of broadband facilities, 

recreation activities and international exports. Figure 4 illustrates this type of 

•

cally 

gment 

be

wing for optional use of local assessment 

worksheets, the system can provide a more robust and complete picture of 

local competitiveness factors. 

ics 

AP 

ess

times and size of available commercial airports, marine ports and intermodal 

truck/rail term

comparison. 

Use of Local Information Worksheets. To assess local conditions for some

important factors that are not readily available, it is necessary to rely on lo

completed worksheets. These include ratings based on detailed criteria for 

judging the quality features of local business parks and buildings, quality 

ratings for local training, business support services and business climate, and 

quality rating for local tourism support facilities and services. Practitioners 

have shied away from such measures in the past because they require jud

in assessing business facilities and supporting resources. However, the LEAP 

approach is based on an understanding that these factors cannot be fully 

measured by available public or proprietary databases, but they also cannot

ignored. By providing and allo

Figure 4. LEAP Comparison of Area Access Characterist

(note: access data obtained via ESRI GIS system) 

Opportunities and Barriers. The crux of the matter, then, is to connect an area’s 

economic performance gaps (unfulfilled opportunities) to its shortfalls in the various 

competitiveness (cost, scale, quality and access) factors. To diagnose which of the 

competitiveness factors are acting as barriers to business growth and attraction, LE

relies on a base of information concerning detailed industries, their relative busin

requirements for these factors, and the how industries respond to changes in these

factors. This approach recognizes that industries must meet thresholds for some

factors in order to make their business operations economically viable at a given 

Sources of Growth in Non-Metro Appalachia page 11
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

ich together provide information on how 

ttracting one industry can create spatial cluster opportunities to also attract additional 

ould

ntages that

vity.

igure 5 shows an example of a LEAP diagnostic report and the resulting 

entification of factors responsible for current industry performance gaps. 

location. For instance, the thresholds can be minimum market size requirements 

(common for financial and business services), maximum access times to airports 

(common for electronic products), and/or delivery time and reliability requirements 

along supply chain corridors (common for just-in-time automotive parts). Additional 

elements of the information base include baseline industry growth forecasts and interindustry supplier and buyer relationships, wh

a

growth through complementary industries. 

In this way, LEAP identifies sets of industries that are good targets for economic 

development based on the match of local characteristics and the operating

requirements of each industry. For those industries that are currently lagging but c

offer future growth opportunities, it identifies the nature of current disadva

need to be overcome in order to effectively promote more local business acti

F

id

Figure 5. LEAP Diagnosis of Factors Holding Back Economic Growth 

in a Sample Study Area 

in other

s.

irect opportunities for business growth may also 

directly create opportunities for growth in complementary industries that do not 

Armed with these diagnostics, LEAP identifies industry targets with the greatest 

opportunities for direct business attraction, the magnitude of potentially achievable 

growth, and the factors that must be addressed to realize those results. It also helps 

practitioners consider opportunities for building upon inter-industry linkages –

words, sets of industries that build on common needs and buyer-supplier relationship

Complementary industries are types of business which are not primary target 

industries, but which may nevertheless represent growth opportunities because they 

are suppliers of goods and services to the primary target industries or otherwise 

interact with them. In this case, any d

in

directly depend on highway access.

Sources of Growth in Non-Metro Appalachia page 12
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

ction can be

ls

m

alue added or business output. The impacts are expressed in terms of range estimates, 

ely 

or

oals, and a program of action steps covering organizational, 

taffing and financing plans to pursue the goals, as well as some form of monitoring 

and evaluation of results. 

Policy Analysis considers how some barriers to business growth and attra

minimized or overcome by the programs and projects of local planners and economic 

developers. Local public policies and programs and projects can include 

improvements in the availability and adequacy of local education, workforce skil

training, infrastructure enhancement, business site development, access to airports, sea

ports, and rail; and improvements to highways or initiation of improved support 

services. By applying the base on information on industry growth factors, the syste

can then identify the potential impact of proposed policies or projects on business 

attraction, and present estimates of the range of resulting impact on jobs, income, 

v

based on risk factors including industry volatility and sensitivity to business cycles. 

Follow On Actions. Economic development targets identified from LEAP will only be

achieved if a strategy plan is put in place to address remaining needs and to activ

entice such business growth and attraction. Once potential opportunities for targeting

future business growth and attraction have been identified, along with needs f

addressing existing barriers, the economic developer must devise a process to work 

with other area agencies and leaders in forging a strategy plan. This includes 

agreement on targets and g

s

2.3 LEAP Uses for Appalachian Growth 

Performance Indicators. For regional and state economic development agencies, 

LEAP was designed to be used in several ways. First, it provides economic 

development performance indicators, reflecting the area’s economic performance, 

trends and growth opportunities, as well as comparison of those performance 

indicators to surrounding areas or counterparts elsewhere. LEAP provides a la

volume of k

rge

ey information that would take considerable effort for local economic 

evelopment agencies to assemble and process themselves. This includes the 

foll i

•

ncement to 

rovide full details for small areas without suppression. We update aggregate 

• orts and 

local purchasing patterns is also provided by MIG under cooperative 

d

ow ng

The core data on employment and business output (patterns and shifts over

time) is provided through a cooperative agreement with Minnesota IMPLAN 

Group, Inc. (MIG). It is developed from information compiled by the US 

Bureau of Economic Analysis, US Bureau of Labor Statistics, Zip and County

Business Patterns, and the Economic Census, with additional enha

p

estimates using information from more recent Dun & Bradstreet. 

Additional information on local concentration of international exp

Sources of Growth in Non-Metro Appalachia page 13
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

f local source purchasing is

derived from calibrated IMPLAN models. 

• arkets

demographic data, using a Geographic Information System (GIS) from ESRI. 

•

te 

piled 

are based on inventories

maintained by the US Dept of Transportation. 

uation

strategy and outside information 

issemination. This includes the following: 

•

ation and broadband

telecommunications facilities, and workforce education. 

•

obs

are dropping as a result of increasing outsourcing and/or mechanization). 

• r

performing in terms of its business mix and business growth performance. 

•

transportation 

access, broadband penetration, and quality of industrial parks. 

trategy for pursuing various growth paths. This includes the following elements: 

•

growth and attraction, and 

the specific industries that are being constrained. 

agreement. The export estimates are based on International Trade 

Administration data, while further analysis o

Local travel times, accessibility measures, delivery markets and labor m

are derived from highway network drive times along with business and 

Other local information includes: (a) workforce characteristics, educational 

attainment and housing costs derived from the US Census; (b) Utility costs 

derived from the Energy Information Administration, Edison Electric Institu

and Energy User News; (c) Local taxes and government revenues com

from the Census of Government; (d) Airport, marine port, and freight 

intermodal facility locations and activity levels

Support for Strategic Review. A second use of LEAP results is use of its eval

reports to support both internal organization

d

Profile of business attraction strengths and weak nesses, such as the size of the

labor market and delivery market, availability of transport

Tracking change in the local area economy is changing over time, in terms of 

gains and loses in employment and/or business sales in various local industries.

Also identify local industries where local business sales are gaining while j

Comparison of local performance relative to adjacent or competing areas (o

the state as a whole), to identify how the local area has been over- or underBenchmarking of local competitiveness for various growth paths, by showing 

relative differences in workforce skills, educational attainment,

Strategy Development. Finally, LEAP can provide information that can help guide

s

Identification of barriers holding back local current success in promoting 

business growth and attraction economic performance: LEAP identifies the 

specific factors that are constraining local business

Sources of Growth in Non-Metro Appalachia page 14
Vol.4 Economic Development Assessment Tools Ch.2 Overview of LEAP

•

ncertainty associated with it. It also identifies 

mutually supporting and complementary industries that can be an indirect 

•

scenarios for enhancing industrial parks, transportation infrastructure, job 

training and business support services may change target opportunities.

Target Industries that represent opportunities for business attraction. LEAP 

identifies the best industries to focus on, the magnitude of the potential 

opportunity and the extent of u

element of a growth strategy. 

Policy Actions that can affect the type and size of industry growth 

opportunities and targets. LEAP allows you to estimate how proposed 

Sources of Growth in Non-Metro Appalachia page 15
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

F GROWTH 

PROJECT

3 USE OF FINDINGS FROM

SOURCES O

3.1 Enhancing Analytic Capabilities 

The Sources of Growth project provided a synthesis of theory and prior research on 

growth paths, a day-long workshop of experts in the field, and empirical studies

factors affecting economic growth in Appalachia. As summarized in the prior three 

volumes, these efforts highlighted critical considerations in defining alternative 

growth paths and their determinants. That has enabled us to identify ways in which

of

LEAP tools can be im

Eco m

• and 

rch

et

• g

he extent to

•

potential growth path directions

based on potential competitive advantages such as labor skills, road networks, 

climate or technology infrastructure features. 

proved to better serve the needs of Appalachian LDDs and State 

no ic Development Agencies. These improvements fall into three categories: 

Defining Growth Paths. Until now, LEAP has focused on evaluating

identifying appropriate target industries for local areas. However, the resea

conducted for this study suggests that there can be additional value in 

explicitly identifying classes of target growth paths (rather than just targ

industries) that local areas can pursue in their economic development 

strategies. An example of such a classification is shown in Exhibit 3-1. 

Rating Existing Situation. Until now, LEAP has focused on characterizin

existing conditions through ratings of local economic performance and trends. 

However, the research conducted for this study enables us to also develop 

ratings of localized growth specialization. Such ratings can reflect t

which a local area is already specializing as a resource-based, learning-based, 

tourism-based, supply-chain based or trade center based economy. 

Rating Potentials for Alternative Growth Paths. Until now, LEAP has 

focused on recommendations of economic growth opportunities in terms of 

potential industries. However, the research conducted for this study provides 

us with a further capability for recommending 

Sources of Growth in Non-Metro Appalachia page 16
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

Exhibit 3-1. Definition of Six Major Classes of Economic Growth Paths 

Basis for Area’s 

Economy Growth 

Description 

Trade Center Growth pattern emanating from a small urban cluster that 

provides goods and services to the exurban communities & 

rural hinterlands 

Agglomeration 

(e.g. cluster economy)

Growth resulting from geographic concentrations of 

interconnected businesses and institutions that enhance the 

productivity of the core industries. 

Supply-Chain 

(e.g. dispersal economy) 

Remote location is chosen over the central metropolitan 

area to host a node of economic activity (distribution or 

assembly) that is part of a larger (geographic) production 

chain. 

Natural Amenity or 

Cultural Assets 

Growth as a result of either quality-of-place attracting new 

households –or – efforts to actively develop & promote 

cultural, recreation, eco-tourism venues and their 

supporting visitor services. 

Knowledge (Learning) 

Assets 

Growth opportunities leveraged from the collective 

knowledge embodied in the region, including social 

capital, technical applications / commercialization, 

institutional assets (educational and financial), 

entrepreneurial start-ups.

Other Growth Paths: 

Natural Resources and 

Government

Growth made possible by the existence of long-standing 

mineral, lumber or agricultural resources, or by the 

decision of government agencies to site major regional or 

national facilities in an area. 

The remainder of this chapter describes various measures that can be constructed to 

assess the current growth path status of an area or the factors affecting local potential 

for various growth paths. The measures that are listed and discussed in the rest of this

chapter are not intended to represent a complete list of desired or possible metrics. 

Rather, they are intended to represent what is known to be currently possible given 

(a) publicly available data sources and (b) proven metrics that have been demonstrated 

in the literature of prior studies (described in Volume 1) or recent empirical studies 

(described in Volume 3). 

These various measures represent potential additions to enhance the value and use of 

LEAP for assessing growth path opportunities. At the time of this report’s 

publication, some have been implemented, some are planned for implementation in the 

near future and others are still in the proposal or development process. Updates on the 

status of these changes will be posted for participating registered users of the LEAP 

system, including Appalachian Local Development Districts and Appalachian State 

Economic Development Agencies at www.edr-leap.com .. 

Sources of Growth in Non-Metro Appalachia page 17
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

3.2 Trade Center Development Paths 

A micropolitan trade center provides goods and services to a surrounding rural 

“hinterland.” It depends on having a small but critical base of population and 

employment, a nature junction of traffic routes serving surrounding areas, and distance 

or topographical features that encourage residents and employees in those surrounding 

areas to visit this trade center location rather than other adjacent or nearby areas as 

their center for buying retail goods and consumer services. The plan is to improve 

LEAP by providing each county or group of counties (comprising a region or Local 

Development District) with trade center indicators rating for both existing conditions 

and future potential opportunities. 

Rating Existing Situation. A description of trade center-based economies is provided 

in Volume 1. It indicates that a trade center is characterized by having a larger than 

normal concentration of retail stores and consumer and professional services (barbers,

doctors, loan companies) than would be expected, given its population base. Of 

course, a given area may be a strong trade center that is well-serving a large 

surrounding area, or it may be a weak trade center that only partially services outside 

areas. This leads to the following proposed indicators of existing conditions: 

• Economic Base Indicator: Consumer Trade-Based Concentration – This 

indicator is defined as the ratio of local employment in retail + consumer 

services + professional services, divided by local population. 

• Trade Center Micro/Metro Rating – This indicator is defined as the county or 

place that has a high rating for the above-cited consumer-based concentration 

and is also designated by the US Census as a “metropolitan center” or 

“micropolitan center” on the basis of net inflows of workers coming in from 

surrounding counties. 

Rating Potentials for Future Trade Center Growth. Discussion of the determinants 

of trade center-based economies are provided in Volume 1 as well as case studies in 

Volume 2. In addition, relevant research on economic hubs, spokes, and market area 

effects are described in Volume 3. These documents focus on transportation, 

topography and population clustering patterns that create centers of consumer trade 

activity serving surrounding trade areas that do not have similarly strong centers of 

activity. This leads to the following diagnostic indicators: 

• Economic Base: Trade Linkages– Technically known as a “spatial lag 

multiplier,” this measure is an indicator of the extent to which economic 

activity for each industry in a given county is supported by demand generated 

in neighboring counties. It is calculated by considering the industry mix of 

each county and that of neighboring counties and information on inter-industry 

relationships. It effectively captures situations where one county is serving as 

Sources of Growth in Non-Metro Appalachia page 18
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

the hub of economic activity for other surrounding counties. Details of this 

measure are provided in the Volume 2, Chapter 2 report where it was 

successfully used to explain trade center growth. It is based on work by Ismail 

at MIT, updating original work by Smirnov. 

• Labor Market Area (Scale) – This is an indicator of the size of the workforce 

or population base that lives within a given (40, 50 or 60 minute) drive time of 

the population center of a county. It thus reaches into neighboring counties to 

calculate a “market area”, which can be interpreted as an indicator of the 

relative size of both the labor market for any industry and the shopper 

customer market for retail and consumer service industries. This measure is 

constructed on the basis of geographic information systems and highway 

network drive times. It is a variant of the population base used for analysis in 

Volume 2, Chapter 4 of the Sources of Growth Study. This indicator is now 

implemented in EDR-LEAP. 

• Composite Trade Center Indicator – This indicator combines spatial lag 

multipliers or trade area indicators with information on distance to the closest 

larger city or urban county. It is intended to overcome a problem confronting 

both of the preceding indicators, which is that they assume a strong central city 

surrounded by a rural hinterland, and can provide misleading results when 

there are actually multiple cities of significance in a multi-county region. For 

instance, the spatial lag multiplier seemed to indicate that Scioto County, OH 

was a strong trade center when it found economic strength in that county and 

evidence that residents of surrounding counties were going outside their home

counties for purchasing of goods and services. However, the case study (in 

Volume 2, Chapter 2) found that the residents of those surrounding counties 

were actually shopping in extra-regional metro centers due to new highway 

access thereby creating an adverse backwash effect on Scioto County. By 

measuring the distance to next larger cities or urban counties, this error can be 

minimized. 

3.3 Industry Agglomeration Cluster Paths 

Agglomeration-based economic growth is based on development of geographic 

concentrations of interconnected businesses and institutions that enhance the 

productivity of the core industries. It most often depends on achieving some form of: 

(a) economies of scale in operations of a single industry, or (b) economies of vertical 

integration associated with clustering industries that buy from and sell to each other, 

or (c) economies associated with several industries sharing a common skill or resource 

base in a given region. The plan is to improve LEAP by providing each county or 

group of counties (comprising a region or Local Development District) with 

agglomeration cluster indicators rating for both existing conditions and future 

potential opportunities. 

Sources of Growth in Non-Metro Appalachia page 19
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

Rating Existing Situation. A description of agglomeration -based economies is 

provided in Volume 1. It indicates that an industry agglomeration cluster is 

characterized by having a larger concentration of individual production-based sectors 

and their directly complementary sectors, relative to the rest of the economic base mix. 

This leads to the following proposed indicators of existing conditions 

• Economic Base: Manufacturing Concentration – This indicator is an index 

reflecting the extent to which any one or more manufacturing industries have a 

higher concentration (location quotient) in the study area that the statewide 

average. 

• Economic Base: Vertical Integration of Suppliers – This indicator is an index 

reflecting the extent to which the dominant manufacturing industries also have 

a strong relative concentration of their suppler industries within the region. 

That is determined by using the tables of inter-industry purchasing patterns 

(technology coefficients) within BEA national input-output tables. These 

input-output relationships are already in use within LEAP for the identification 

of indirect business attraction opportunities; the proposed new measure would 

use that information for also assessing existing industries. 

Rating Potentials for Future Industry Cluster Growth. Discussion of the 

determinants of trade center-based economies is provided in Volume 1, along with the 

manufacturing case study (Alabama’s auto manufacturing cluster) in Volume 2. These 

documents focus on the scale and density of industries, workforce skills and 

supporting facilities, as well as their cost and quality. This leads to the following 

diagnostic indicators: 

• “Effective Density” of Opportunities Rating – This is a composite indicator of 

the productivity gain associated with increasing the effective density of 

activities reachable from a center of industrial activity. It is calculated on the 

basis of population based within 40 minutes of the population-weighted center 

of the core county, divided by the land area of the county. It effectively 

represents density of the county population, modified to add extra “effective 

density” if additional outside population is close by. This measure is based on 

research results of “Productivity and Metropolitan Density,” by Timothy 

Harris and Yannis Ioannides, Tufts Univ. Dept of Economics, 2000. This 

measure is now implemented in LEAP. 

• Gap Analysis: Vertical Integration of Suppliers – This is the flip side of the 

economic base measure cited earlier. It reflects that proportional magnitude of 

the gap between (a) level of local employment in suppliers to the dominant 

manufacturing industry, and (b) the theoretical maximum employment if all 

suppliers were locally present. 

• Barrier Analysis: Cost Competitiveness – This is a composite measures of the 

Sources of Growth in Non-Metro Appalachia page 20
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

local cost of labor, energy and transportation inputs for each industry, relative 

to competing areas or other comparison areas. It is calculated using relative 

weights for the degree to which each industry makes use of labor, energy and 

transportation factors in is production process. This calculation is now 

implemented in LEAP. 

3.4 Supply-Chain (Dispersal) Paths 

Supply-chain based economic growth is based on development of suppliers and 

distributors strung along a highway corridor. This arrangement makes use of dispersal 

economies for keeping labor costs low, and it makes use of transportation connection 

efficiencies associated with same day delivery. In some cases, it also makes use of 

multi-modal delivery connections (e.g., intermodal truck-rail or truck-air connections). 

The plan is to improve LEAP by providing each county or group of counties 

(comprising a region or Local Development District) with supply chain ratings for 

both existing conditions and future potential opportunities. 

Rating Existing Situation. A description of supply chain economic growth is 

provided in Volume 1. It indicates that a supply chain-based economy is most often 

characterized by having a larger than normal concentration of distribution facilities 

and/or parts suppliers to assembly plants (e.g., metal or plastic product fabricators 

serving auto plants). This leads to the following proposed indicators of existing 

conditions 

• Economic Base: Logistics Concentration – This is an index reflecting the

extent to which warehousing/distribution, wholesaling, and trucking industries 

have a higher concentration in the study area that the statewide average. This 

is reflected in a composite “Location Quotient” for those logistics-related 

industries. 

• Economic Base: Fabricated Parts Suppliers – This is an index reflecting the 

extent to which metal, plastic or glass fabrication industries have a higher 

concentration in the study area that the statewide average. This is reflected in a 

composite “Location Quotient” for those fabrication industries. 

Rating Potentials for Future Supply Chain Growth. Discussion of the determinants 

of supply chain -based economies is provided in Volume 1 and the auto alley case 

study in Volume 2. These documents focus on the roles of labor cost, industry mix and 

location relative to highways, in addition to highway and connections with intermodal 

rail and air terminals. This leads to the following diagnostic indicators: 

• Major Highway Access – This is constructed as a measure of distance from the 

county population-weighted center to the nearest four-lane or interstate level 

highway. Alternatively, the county’s mileage of four lane highways can be 

Sources of Growth in Non-Metro Appalachia page 21
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

used to reflect the extent of highway access occurring in the county, as done in 

the “Twin County” study described in Volume 3, Chapter 3. Either way, the 

highway measure can be used with the measures of logistics and fabricated 

parts suppliers to improve the indicator of supply chain supporting activity. 

• Drive time to Commercial Airport – This is a measure of the highway drive 

time from the county population-weighted center to the nearest public airport 

with regular commercial scheduled airline service. It is combined with 

information on the magnitude of service provided at that airport (measured in 

terms of the number of annual commercial airline takeoffs and landings), so 

that both airport proximity and airport size (service level) are reinforcing 

positive factors. This interaction reflects the new empirical analysis described 

in Volume 2, Chapter 4. The measure also requires a database of commercial 

airport facilities from the FAA, and a highway network with shortest time path 

travel times. This has now been implemented in LEAP. 

• Drive time to Commercial Rail Intermodal Terminal – This is a measure of the 

highway drive time from the county population-weighted center to the nearest 

freight truck-rail intermodal terminal with regularly scheduled commercial 

scheduled freight train service. It requires a database of commercial truck-rail 

intermodal interchange facilities (from USDOT) and a highway network with 

shortest time path travel times. This has now been implemented in LEAP. 

• Drive time to Commercial Marine Port – river to sea – This is a measure of the 

highway drive time from the county population-weighted center to the nearest 

marine (river or sea) port with regularly scheduled commercial marine ship or 

barge service. It requires a database of commercial marine terminals with 

regular service (from USDOT) and a highway network with shortest time path 

travel times. This has now been implemented in LEAP. 

• Labor Force Scale Rating – This is a measure of the population or workforce 

living within 40 minutes drive time from the county population-weighted 

center. A minimum level of workforce is needed to attract warehousing, 

wholesaling and related logistics-related industries, as shown in Volume 3, 

Chapter 4. Thus this measure can be interacted with the preceding four 

transportation access measures to develop more refined measures of potential 

area attractiveness for growing supply-chain based activities t an area. 

3.5 Amenity & Cultural Asset Growth Paths 

Amenity and cultural assets are “quality of place” features that can serve to attract new 

households to an area for a tourist visit or as a retirement destination. The attractions 

can be climate, interesting mountains or water features, and/or developed cultural 

activities or recreation venues. The plan is to improve LEAP by providing each 

Sources of Growth in Non-Metro Appalachia page 22
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

county or group of counties (comprising a region or Local Development District) with 

amenity and cultural asset activity ratings, for both existing conditions and future 

potential opportunities. 

Rating Existing Situation. A description of amenity and cultural asset-based 

economies is provided in Volume 1. It indicates that this type of growth path is 

characterized by a concentration of lodging, meal and/or recreation activities, serving 

either day visitors or overnight visitors. This leads to the following proposed 

indicators of existing conditions: 

• Economic Base: Lodging, Restaurants and Recreation Concentration – This is 

an index reflecting the extent to which local lodging (hotel, motel and 

camping), meals (restaurants, bars and takeout establishments) and recreation 

services have a higher concentration of employment in the study area than the 

per capita statewide average for those activities. This is reflected in a 

composite “Location Quotient” for those visitor-serving industries. This has 

now been implemented in LEAP. 

• Housing/Population Base: Retirees – This is an index reflecting the extent to 

which the local area has a higher share of population that is retired and living 

in the region shorter than five years. It draws information from the US Census 

Bureau and their Current Population Survey. 

Rating Potentials for Future Amenity & Cultural Asset-Based Growth. 

Discussion of the determinants of amenity and cultural asset -based economies are 

provided in Volume 1, as well as the case study of asset-based growth (e.g 

Chautauqua County, NY and the Corridor K region) in Volume 2. These documents 

indicate that this economic growth path depends on having some combination of: (1) 

desirable climate, (2) interesting water, mountain or other scenery features, (3) 

interesting cultural, creative or recreational visitation sites and (4) access to a nearby 

population market for day trips. In the case of some large regional or national draws, 

it may also depend on (5) highway and airport for long-distance trips. 

Unfortunately, there is no good database that can identify the locations of man-made 

sites of interest, and particularly places where there is a potential for future

development of cultural, creative or recreational attractions (factor #3 above). 

However, it is still possible to obtain or derive data relating to factors #1-2 and #4-5 

above, and those factors lead to the following diagnostic indicators: 

• Climate Rating – Composite ratings of outdoor temperature comfort levels can 

be used as a factor affecting the potential for outdoor activities including 

tourism and recreation. This information can be drawn from NOAA data on 

temperature conditions in weather stations across the country, covering all 

states and metropolitan areas. For each location, their database provides 

monthly data on temperature averages and ranges, as well as heating and 

cooling “degree-days” (indicators of comfort levels for outdoor activities and 

Sources of Growth in Non-Metro Appalachia page 23
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

need/cost of running heaters and air conditioners if indoors). This database has 

now been assembled for potential use in LEAP. 

• Physical Amenity Rating – Composite ratings of physical amenities can be 

used to represent the attraction of an area as a place to live. The ERS-USDA 

“Natural Amenities Scale” is an index reflecting the extent to which each 

county offers topographic variation (hills and mountains) and water areas 

(lakes, rivers and seacoasts), as well as temperate weather and low humidity. 

It is provided by the Economic Research Service (ERS) of the US Dept. of 

Agriculture (USDA). This dataset was obtained and used in the Volume 3, 

Chapter 5 study by MIT, though that use was in the context of predicting 

economic distress (where it was not a significant explanatory factor) rather 

than the context of assessing amenity-based tourism and retirement activities 

(where it would be a much more relevant factor). It is now available for 

potential use in LEAP. 

• Major Highway Access – Good highway access is needed for development of 

most tourism and visitor attraction sites. This can be measured in terms of 

distance from the county population-weighted center to the nearest four-lane or 

interstate level highway. That is the same measure discussed earlier for 

evaluation of supply chain growth potentials. 

• Urban Rating – Urbanized areas could provide a larger density of population 

and higher likelihood of multiple attractions for some types of day-trip 

tourism. Degrees of urbanization can be measured in terms of the ERS/USDA 

“Rural-Urban Continuum Codes” -- a classification scheme of nine steps that 

distinguishes metropolitan counties by population size and non-metropolitan 

counties by degree of urbanization and adjacency to metropolitan areas. The 

urbanization measure was used in the Volume 3 study of general spatial 

influence factors. However, the role of this factor particularly for tourism and 

amenity based development is not yet proven. 

3.6 Learning and Technology Growth Paths 

Learning and technology growth paths are forms of economic development that 

leverage the collective knowledge of specialized technologies and/or the 

entrepreneurial base that is embodied in the residents and workforce of a region. 

These features are typically the result of two factors: (1) specialized workforce 

training, including experience with technical applications and/or commercialization 

processes, and (2) strength of specialized supporting systems such as colleges, 

research & development facilities, financial institutions and high levels of broadband 

availability and usage. The plan is to improve LEAP by providing each county or 

group of counties (comprising a region or Local Development District) with learning 

and technology-based ratings for both existing conditions and future potential 

Sources of Growth in Non-Metro Appalachia page 24
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

opportunities. 

Rating Existing Learning-based Setting. A description of learning and technologybased economic growth is provided in Volume 1. It indicates that areas with this type 

of economic growth path are often characterized by having a larger than normal 

concentration of activity in supporting institutions, including graduate level higher 

education institutions, private research laboratories, and science-based industries (such 

as pharmaceuticals and computer electronics). This leads to the following proposed 

indicator of existing conditions: 

 

• Economic Base: Education, Research and Development –This is an index 

reflecting the extent to which higher education institutions, research and 

development laboratories and science-based industries account for a higher 

portion of employment in the study area than the statewide average for those 

activities. This is reflected in a composite “Location Quotient” for education, 

research and technology industries. 

Rating Potentials for Future Learning-Based Growth. Discussion of the 

determinants of learning and technology-based economies are provided in Volume 1, 

as well as the case study of technology development (Morgantown-Fairmont WV) in 

Volume 2. They indicate that key factors affecting success in learning-based 

economic development are: workforce training and entrepreneurship, supported by 

concentrations of educational institutions and research centers, availability of 

broadband technology, and availability of financing options. Those factors lead to the 

following diagnostic indicators: 

• Four Year Colleges (spatial lag) – This measure is defined as the number of 

students attending four year colleges and graduate programs in the specified 

county and surrounding counties. It is constructed parallel to the “spatial lag” 

variable, defined earlier to measure local concentrations of activity that serve a 

broader “hinterland” region. A database listing the names and addresses of all 

colleges is provided by the US Dept. of Education. This measure is being 

processed and will soon be programmed as an addition to LEAP operations. 

• College Graduates – This measure is defined as the portion of the active 

workforce in a given county that has completed at least four years of college, 

relative to the national average. It is derived from US Census Bureau data. 

The rating can also be scaled by workforce size, if desired. The basic measure 

has now been implemented in LEAP. 

• Broadband Access – This measure is defined through a 0 – 4 scale reflecting 

the number of competing service companies offering broadband access in a 

given area. It is compiled from FCC and telecom/cable industry sources. The 

premise behind this measure is that greater availability and more competition 

lead to increased coverage and reduced prices compared to places where such 

competition is not available. This measure has now been implemented in 

Sources of Growth in Non-Metro Appalachia page 25
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

LEAP. 

• Entrepreneurship – This measure reflects the fact that some areas have 

attracted a population base that exhibits notably higher than normal rates of 

entrepreneurship. This may be due to some combination of location isolation, 

cultural traditions, local institutions or historical factors. The Federal Reserve 

Bank of Kansas City has developed “Entrepreneurship Indicators” on the basis 

of BEA and Census data about local employment and income generated by 

non-farm proprietors. 

3.7 Natural Resource & Other Growth Paths 

There are other economic growth paths that need to be acknowledged, though we do 

not develop measures of their status or growth factors for reasons that are explained 

below. 

• Natural resource-based economic growth is that made possible by the 

existence of mineral, lumber or agricultural resource assets. Historically, the 

American economy through the mid nineteenth century was based primarily on 

natural resource development, and many rural areas across America still 

depend on it. A problem that plagues many rural areas, but particularly rural 

Appalachia, is that the coal mining and lumber/wood resources that were 

previously the mainstay of local economies is no longer a source of job growth 

(while industry output has grown by investing in technology-enhancements.) 

Therefore, most of these areas are making attempts to diversify away from a 

resource-based economy. Accordingly, we do not focus heavily on natural 

resources among the various forms of asset-based growth in this study (the 

exception is the case study in Volume 2 for Pike County, KY) for the 

Appalachian Regional Commission. 

• Government and institution-based economic growth is made possible by the 

external decision of government agencies (federal and/or state) and private 

institutions to site major regional or national facilities in an area. There are 

some notable examples of military bases, government office facilities, colleges 

and research labs that have chosen to locate in rural, isolated areas within 

Appalachia and elsewhere. Some of these decisions were made in part to help 

“jump-start” a local economy. However, the political, personal and 

institutional preference factors underlying these decisions are usually outside 

of local control. Hence, we do not develop measures to reflect the potential for 

this form of economic growth. 

Sources of Growth in Non-Metro Appalachia page 26
Vol.4 Economic Development Assessment Tools Ch.3 Use of Findings

3.8 Supporting Local Economic Development 

Use of LEAP. The Local Economic Assessment Package (LEAP) is being used by 

the Appalachian Regional Commission as a means of providing its Local 

Development Districts (LDDs) and the Appalachian state-level economic development 

agencies with both relevant information and diagnostic tools for improving economic 

development. Adding measures of the current growth path status of local areas, as 

well as ratings of potential opportunities for pursuing various growth paths will impart 

new capabilities to the LEAP analysis. Instead of just offering diagnostics and targets 

in terms of industries, it will also be capable of offering diagnostics and targets in 

terms of growth paths. By having both capabilities, ARC, the LDDs and the state 

agencies can be empowered to make more informed and better targeted economic 

development strategies for local development. 

Further Research and Enhancement of Tools. The improvements laid out in this 

chapter are an initial attempt to expand the economic development analysis tools and 

assessment methods beyond the industry-based cluster targeting that has been a 

mainstay of the economic development field for many decades. The research 

discussed in Volume 1, the case studies in Volume 2 and the new empirical analysis 

covered in Volume 3 all point to a common conclusion -- that local economic 

development success comes from the confluence of many factors, and further work is 

clearly necessary to further untangle their roles and effects. 

In particular, the work completed in those three earlier volumes also moves forward 

our state of knowledge and understanding of economic development growth factors. 

In particular, it confirms the importance of understanding “spatial linkages” – factors 

that tie the economic development success of an individual county or a region to the 

broader economic development patterns and trends of their neighbors – proximal and 

/or economic. That work also confirms the key role that accessibility and Appalachian 

transportation improvements can make in affecting all of the various economic 

development growth paths. As new research is completed, further improvements can 

be made in our diagnostic measures of growth path opportunities and targets.

Sources of Growth in Non-Metro Appalachia page 27
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

E

SOURCES OF

GROWTH

4 CONCLUSIONS FROM TH

STUDY OF

4.1 Lessons learned from the Comprehensive

Examination 

This multi-year study effort on non-metro Appalachian growth prospects combine

several research techniques to examine various hypotheses on the growth processes 

that may be most compatible with local conditions and assets (both physical and 

human-made). The working hypothesis of this inquiry is that when loc

development efforts are better informed by the use of the new tools and insights about 

what they have to work with – including the attributes of neighboring 

d

al economic 

ommunities/economies – such efforts will yield better suited opportunities for growth 

entifying the most critical factor(s) to the economic turnaround and in the sequence 

of socio-economic/policy events – whether local, regional, national or global. 

c

than when planned in isolation. 

That being said, it is not always transparent to even local economic developers what 

the explanation is for one rural county’s success story. Even if that evidence can be 

articulated retrospectively, it is likely that the perspectives would differ in terms of the 

id

4.2 Lessons from the Case Studies 

In the few instances where case study results did not entirely agree with the expected 

model generated patterns of growth, we gained a new understanding of how

neighboring economies’ spatial influence exert adverse backwash effects on the case 

study economies (such as the influence of the Cincinnati metro area on the 

development path of Scioto County, OH). In essence we learned about the limitations

of the spatial economic base modeling diagnostics and reinforced the validity of 

findings from other research, such as by Feser (2005). This discovery process added

another dimension to our understanding of the processes influencing the current and

desired economic performance in non-metro Appalachia. In short, while timing and 

Sources of Growth in Non-Metro Appalachia page 28
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

e

so that the growth opportunities that have emerged for one county (e.g. Pike 

ounty, KY) may exert more of a beneficial spillover to distressed, neighboring 

me 

e

ct to the employment center. This evolution of events was most clearly 

emonstrated in the case of Alabama’s success in building its current auto assembly 

lve

of research, business start-ups, and 

pportunities for higher wage job formation. These are the benefits conferred on 

uring

flat terrain) and the fact that Alabama’s ample highway network 

allowed in-state auto manufacturing firms to participate in several national supply 

patience are key features of every strategy plan, and its associated outcomes, thes

results underscore the need for a periodic reassessment of how the local economy and

labor market are changing in relation to neighboring economies. Market access 

opportunities are rarely evenly distributed which makes it all the more imperative to 

(a) improve what you can, and then with the remaining access limitations (b) plan

regionally

C

counties. 

Engaging the educational system – from K-12 to leveraging certificate programs and 

community colleges – has to be one of the first steps to re-conditioning the existing 

workforce and preparing the county’s future working age residents for meeting 

regional employment demand – especially if job growth is slow to ignite in the ho

county. This also requires that the workforce has access to the transport infrastructur

to conne

d

cluster. 

Both the educational resources and transportation infrastructure of a county can evo

to take on more dynamic roles to shaping local and regional growth outcomes. As the 

case of the Morgantown-Fairmont high-tech development demonstrated, the R&D 

investment and population that are drawn to locations with higher-education

institutions and government research facilities are rewarded with broader networks

(e.g. social capital), commercialization 

o

learning-based economies. 

In addition to Alabama’s responsive educational system, auto assembly manufact

took hold throughout the state as a result of plentiful development sites (many as 

greenfields and

chains as well. 

4.3 Key Findings from Empirical Studies 

nties,

o

HS,

em, as 

These studies shed new light on what causes some non-metro Appalachian counties to

make economic strides forward, while others remain distressed. Key objectives of 

these studies were an examination of the role of economic linkages among cou

and the effects of demographic factors, industry mix, mountain topography, market

access and highway improvements, among other factors, in affecting relative 

economic performance. Of particular note is the exploration of new techniques t

examine spatial and economic linkages in a region to help diagnose complementary 

development prospects for the economic base of neighboring counties. Another 

contribution is the empirical study of the economic development impact of the AD

which provides evidence on the significant impact of new corridors in the syst

Sources of Growth in Non-Metro Appalachia page 29
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

alytical techniques that can help to 

entify relevant development paths given the assets, linkages and constraints of the 

nal neighborhood.

s

t of

ese effects diminish with geographical distance, it is reasonable to assume initially 

ipliers, the 

iles as

g

g

it is recommended that this method be applied to groups of 

examine the spatial forces at work on each county in a 

pecific neighborhood.

well as the continued importance of manufacturing in accounting for the growth 

differences of Appalachian counties as compared to their socioeconomic nonAppalachian twins. The set of empirical studies provide important insights into how 

spatial measures interact with demographic, industry, geographical and transportation

variables to influence economic performance and growth rates. Taken together these

findings provide better calibrated economic an

id

counties within their regio

Economic Base Studies: 

The spatial linkage economic base model provides new tools to diagnose the economic

development prospects of counties relative to their neighbors and the larger 

surrounding region. The principal distinction between the classical export-base model 

and the modified spatial model is that in the spatial model, the export-base is 

segmented into two components where the “local” oriented export-base is linked 

directly to “global” export activities in the neighboring counties. In addition, this

approach introduces the concept of regional neighborhood which can be understood a

the sphere of immediate economic influence of a county’s economy exerted via 

common infrastructure, economic linkages, shared labor pools, etc. Because mos

th

that most of these cross-county border interactions affect neighboring counties. 

The spatial export base method provides insights into the development potentials of 

the distressed and transitional counties’ export-base, but the methodology is perhaps 

best used on a regional and sub-regional basis rather than on a county basis. While this

analysis can be used to create profiles for each county, highlighting the mult

top industries for each county, etc., users should not construe these county prof

policy prescriptions since by definition the profiles reflect the influences of 

neighboring counties. Instead this approach should be used for a cross-county 

comparison to understand the relative characteristics of these counties such as the 

degree of industry diversification or concentration, or the regional linkages. This

application may be useful in identifying potential “growth hubs” that possess stron

spatial and economic linkages with their neighbors and the potential to generate

regional growth, but caution is recommended given important data and modelin

limitations as evidenced by the case study of Scioto County, OH in Volume 2. 

Moreover, this model has analytical limitations in applications to remote, rural 

counties. In this context

counties for case studies that 

s

Sources of Growth in Non-Metro Appalachia page 30
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

Transportation Access Studies: Several facets of these studies examine the impact of 

different types of transportation accessibility in affecting the economic performance 

and prospects of counties. 

The Impact of the ADHS: The key empirical finding of twin county study on the 

impact of ADHS is that by 2000, the performance of ARC counties with open ADHS 

segments had higher income growth relative to their non-Appalachian twins, with the 

ADHS counties posting 200% more income growth over the 1969-2000 period. This 

finding can be compared to the growth rate gap between all ARC counties and their 

twins. By 2000 income in all ARC counties had grown 131% more since 1969 than in 

the non-Appalachian counties; earnings growth was 96% higher; population growth 

was 9% higher; and per capita income growth was 36% higher. Thus, this study 

showed that using survey-based data overcame shortcomings in earlier analyses to 

demonstrate a robust statistical link between ADHS investments and differential 

income and earnings growth between ARC counties and their twins, particularly for 

new construction. These findings also suggest that there is a considerable lag between 

highway investments and their full effect on economic growth. 

The twin county study also provides insight into the uneven performance in the ARC 

region during this period: performance in the northern part of the ARC region not only 

lagged its non-Appalachian twins but also the rest of Appalachia, and smaller 

metropolitan areas fell far behind their non-Appalachian counterparts. By contrast, the 

study of long-term trends also showed that the states performing best relative to their 

non-Appalachian “twins” (i.e., Georgia, Kentucky, and South Carolina, and 

Tennessee) appeared to do so in part on the strength of their performances in 

manufacturing. This reinforces the finding that manufacturing clusters are still an 

important source of economic growth. 

Airport Accessibility: This study found that there are the types of industries that can be 

expected to situate near airports because they rely on business air travel for meetings 

with either clients or other office locations of their business. Businesses that appear to 

particularly value reductions in travel time to airports include wholesale trade, paper 

manufacturing, insurance, and professional services. While these findings on airport 

access make sense, there is need for further analysis of the business attraction 

relationship to airport access – separating improvements in access time, distance, type

of highway access and/or airport service levels. Furthermore, there is a need to further 

explore the ways in which market scale and airport access may be better measured by 

industry employment shares, concentration ratios or total size of the industries. 

Sources of Growth in Non-Metro Appalachia page 31
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

Demographic and Spatial Influences on County Economic Performance: These 

econometric studies provide new insights into how spatial influences interact with 

demographic, industry, geographical and transportation attributes of a county to 

influence its economic performance and rate of growth. First, the studies demonstrated 

the importance of explicitly modeling spatial dependencies among counties in order to 

avoid overstating the influence of other non-geographical factors that account for 

growth differences within the Region. In addition, using adjacency to measure spatial 

dependency may not be the best way to account for spatial spillover effects among 

counties, particularly knowledge-based spillovers such as the diffusion of information, 

innovations, and technical collaboration which are not as simply contained by 

adjacency.

Second, the analyses confirm the importance of other measures of connectivity and 

interdependence, particularly major highway and rail infrastructure connecting the 

localities to population centers or resource users. Work force accessibility as 

measured by commuting times vary in their impact on economic performance 

according to county types, with commuter accessibility mattering most for 

micropolitan counties, registering as somewhat important for Metro counties, and as 

not significant for non-core, non-metro counties. With respect to geographical factors, 

the most salient finding is that metro areas’ economic performance are least influenced 

by geography (the result of infrastructure and population-economic density having 

diluted the constraints of topography). In contrast non-metro areas, particularly noncore counties with neighboring counties that have relatively more rugged terrain, may 

benefit economically from accessibility improvements as shown in the case study in 

Volume 2 of Pike County, KY as a trade center, and Cherokee County (Murphy, NC) 

as a trade center in the Corridor K region. 

Third, rather than trying to identify a single, complex model for explaining economic 

performance and growth differences across all county types, a potentially more useful 

inquiry was to identify the most relevant type of model for a county depending upon 

the characteristics of that county and its neighbors. Indeed, while the results from the 

general models developed in this report underscored the relevance of spatial modeling, 

the findings also indicate the need to disaggregate counties into metro, micropolitan 

and non-core, non-metro types. 

Once the cross sectional analysis was disaggregated by county type, the separate 

analyses demonstrated that metro, micropolitan and non-core counties exhibit 

considerable variation in economic performance and growth, with varying responses 

to demographic, industrial, geographic and transportation accessibility factors. Yet, 

analyses based on county types pose new challenges in modeling spatial relationships, 

as the researchers indicated, and leave open to question certain findings since spillover 

effects are not being explicitly modeled, particularly for demographic variables such 

as educational attainment (which are probably considerable for micropolitan counties). 

The finding of the positive employment growth effect of industry concentration within 

the micropolitan county makes intuitive sense in that it may reflect the influence of 

cluster-type development, while the negative employment effects of industry 

Sources of Growth in Non-Metro Appalachia page 32
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

concentration in non-core, non-metro counties undoubtedly reflects the effect of a 

narrow economic base due to the high dependence on one industry. The lack of 

influence of industry concentration in metro counties follows from the higher 

diversification of the economies of such counties. Nevertheless, the findings on 

industry mix (based on factor analysis) raise more questions than they answer, and 

clearly require more exploration, as do the specifications of these models which lack 

explanatory power, particularly for explaining employment growth in micropolitan 

and non-core, non-metro counties. 

Fourth, a few conundrums were uncovered by these analyses, particularly the lack of 

explanatory power of natural amenities to account for economic performance 

differences based on the natural assets of the counties. The lack of explanatory power 

for natural amenities suggest the need for other types of spatial modeling, perhaps 

based on transportation networks and improvements between metro and non-metro 

counties. Since the presence of natural amenities is largely invariant over time, it 

makes sense to model relevant changes in infrastructure that may affect the 

accessibility or value of these assets to the non-resident population. The influence of 

knowledge-based spillovers may require an understanding of networks that link, for 

example, higher education institutions with research and industry centers. 

Fifth, entrepreneurial measures performed reasonably well in the economic health 

models indicating that increases in income per non-farm proprietor were positively 

correlated with lower distress levels, while an increase in dependence on proprietors’ 

income relative to wage and salary income were correlated with increased distress. 

These results seem to reflect the differences stemming from greater entrepreneurial 

opportunities in counties where proprietors income in growing, while increases in 

proprietors income relative to wage and salary incomes suggests entrepreneurship of 

necessity due to a lack of wage and salary employment growth. 

Finally, a separate analysis of the relationship of the size of the population base on the 

business mix of a county shows that population thresholds matter, particularly for 

transportation, financial services, publishing, professional and technical services, and 

real estate. These findings are useful in framing and targeting local strategies for both 

business recruitment and entrepreneurial strategies that non-metro counties might 

pursue. 

4.4 Implementing Findings for Strategy 

Planning 

Many of these modeling findings provide an analytical foundation for applying better 

calibrated economic techniques to identify relevant development paths given the 

assets, linkages and constraints of the counties within their regional neighborhood. 

Counties in micropolitan areas, and perhaps those adjacent to micropolitan areas or

Sources of Growth in Non-Metro Appalachia page 33
Vol.4 Economic Development Assessment Tools Ch.4 Study Conclusions

linked via major transportation corridors and supplier chains, should be viewed as the 

prime candidates for applying many of these techniques and insights. Many of the 

growth factors that were identified in the various facets of this study are amenable to 

further refinements by augmenting the diagnostic capabilities of the EDR-LEAP 

model which is available to all local development district entities as an on-line 

research tool. Many of the growth path specific attributes are already now 

implemented in the EDR_LEAP tool and the current market access logic of EDRLEAP implicitly begins to address spatial linkage potential, though this could be done 

with greater detail as the data resources become available. Having evolved from the 

first ARC-Highway Opportunities model, the EDR –LEAP model is an accessible 

economic development analysis framework that accounts for the role of overcoming 

market isolation and points towards different opportunities for an area’s working age 

residents and businesses. The result of including better understood metrics that depict 

the spatial influences exerted on a county, or its growth path propensity would seem

promising to improve how opportunities are both understood and identified. There 

may be opportunities to complement such applications with additional case study work 

that applies spatial econometric analysis and regional input-output analysis to better 

explicate the nature of these spatial relationships among non-metro counties and the 

implications on how economic activity is organized. 

4.5 Future Study Directions on Non-metro 

Growth Processes 

The following areas have emerged for future study as a result of where this current 

research effort has concluded. The impact analysis of the ADHS suggests the need for 

more detailed examination of the time lags between the completion of corridors and 

the economic impacts, including applying spatial analysis to assess any backwash or 

relocation effects. The augmented export base model could be revisited to improve the 

level of resolution regarding the nature of cross-sector interactions under-pinning the 

spatial linkages currently detected. Further spatial modeling techniques should be 

developed to explore the spillover effects for different county types, as well as 

developing new spatial modeling approaches for amenity and knowledge-based 

spillovers. Finally, nowhere in the current study undertaking was the role of fiscal 

capacity in growth outcomes explored. To do so will require overcoming the current 

data constraints and harnessing a good cross-section of fiscal data.

Sources of Growth in Non-Metro Appalachia page 34