By providing the essential investment to support and drive economic growth, we all know that the development industry makes a hugely important contribution to the UK economy. But relatively few organisations can point to specific evidence or tangible examples of the wider benefits delivered by their day-to-day activities and operations.
The concept of measuring the social and economic impacts of corporate activities has, however, started to attract greater focus and attention within the development sector. Leading organisations increasingly want to take a strategic perspective of the contribution they make to the national and local economy through their development portfolios and investments. Within a competitive and often crowded marketplace, they are coming to realise that to effectively influence stakeholders requires a clear and compelling narrative, justified by a robust and objective evidence base.
At Lichfields, we work with some of the largest and most successful companies in the sector including commercial developers, housebuilders, retailers and industry bodies, to help them assess their economic contribution.
Friday we were delighted to launch our most recent collaboration with Landsec, the UK’s largest listed commercial property company, having supported them to measure their sizeable contribution to the UK economy for the first time. The findings
show Landsec’s annual contribution to the UK economy through buying, selling, building and managing commercial property.
But with so much to potentially cover and include, where’s the best place to start? I’ve set out some key questions for any organisation thinking about how to measure their contribution:
1) What’s the best way of analysing the value created by an organisation?
For large companies, there is often a case to break down activity by specific divisions or geographical trading areas. Some examples include:
2) Who is the target audience and what are the key messages to convey?
This will determine the types of impacts and metrics to explore, as well as the outputs required. Once the added value generated by a business has been quantified, this can be applied in a number of contexts including corporate social responsibility reporting, communicating wider value to stakeholders (such as investors, local councils, government) and providing differentiation from competitors (for example within competitive bidding situations). This could focus on ‘real time’ impacts such as revenue generated for UK plc as well as longer term impacts such as investing in the workforce and local communities (e.g. supporting people to (re)enter the labour market).
3) What input data is available?
Think about what kind of data and information is already held in-house (for example on a company ledger or payroll) and what might need to be captured through primary data collection or surveys. For many of our clients when undertaking this exercise for the first time, this can help to shine a light on the type, scale and quality of a wide range of company data and often helps to improve and streamline internal systems going forward. In reality we find that it’s an evolving process, with the range of metrics reported expanding and diversifying over time. Our analytical framework is flexible and scalable, and draws on the latest data and national best practice to consider socio-economic contribution across a range of direct, indirect and wider impacts including creating jobs and expenditure, supporting public resources and services and building sustainable communities (Figure 1).
Figure 1: Socio-economic impact framework
This provides an opportunity to look beyond the obvious metrics (such as number of people directly employed by an organisation) to quantify the value supported across the wider supply chain and economy. For instance, the ‘catalytic’ and place-making role played by major developments, such as kick starting the regeneration of a town centre or unlocking a new piece of transport infrastructure to enhance connectivity and consequently enable an area to secure additional investment.
4) What is the most effective and impactful way of presenting the results?
This will partly depend on the intended audience, and it may be that a suite of different outputs are required. We have used our experience and polished suite of graphics tools to communicate key messages in a visually appealing way, through clear and user-friendly outputs such as infographic summaries, interactive tools and creative, engaging reports (some examples below).
What’s clear is that more of the development sector’s key players are realising the value that comes from measuring and communicating their total economic impact, and we expect to see a growing appetite over the coming months as government looks to secure new sector deals. At Lichfields we are well placed to help and simplify the process, drawing on our market-leading expertise and unparalleled track record of economic impact assessment, as well as our ‘tried and tested’ tools that have been independently reviewed and verified.
Please get in touch
to find out more and to discuss how we can help.
Image credit: Loop Imaged Ltd / Alamy Stock Photo