Economic impact studies assess the way in which an initiative or policy, an event or series of activities affects the local or regional economy. Such research may be conducted as part of an appraisal of options (before a decision is made), or after a project has been implemented – to see whether the effects on the economy are as predicted. There is no single approach, although there are certain principles to follow. For each project the work identifies and then measures the difference that the project makes to employment and GVA supported.
Over the past 20 years SQW has researched the economic impact effects of new roads, buildings, air routes, cultural and sports events, landscapes, national parks, universities and technology. All are based on assessing the difference that the new activity has made to income, expenditure and employment in the local area or region.
Much of SQW’s work on economic impact has related to the tourism-related effects of specific events: the Commonwealth Games, the Rugby World Cup, the Ryder Cup, the Edinburgh Festivals and the G8 Summit. Hosting these events can generate substantial, short term, injections of income into a local economy, but this type of analysis needs to be treated very carefully. Some of the apparently new expenditure may have been made in the area anyway, there may be multiplier effects as the expenditure flows through the economy and it is important to consider the possibility that the new activities are ‘crowding out’ others.
While most economic impact studies are concerned with the immediate effects, our work is increasingly looking at how sustainable these effects might be. For example, for most major events there is growing emphasis on legacy and the contribution made to regeneration.
Examples of SQW projects
Port of London Authority economic impact study
SQW was commissioned by the Port of London Authority (PLA) to update the studies undertaken in 1993 and 1998 to measure the impact of the Port of London in the area for which the PLA has statutory responsibility, between Teddington in west London and the sea. This area includes the London Boroughs adjoining the River Thames and the Counties of Essex and Kent. As in our previous studies, we undertook a survey of around 200 port operators and port-related companies and services in the Port of London.
Economic impact of e-business
For Scottish Enterprise, SQW undertook a study to assess the impact of e-business on Scotland’s economy, and to provide a ‘vision’ for e-business in Scotland in 2010. Our work included a wide-ranging review of current literature on the economic impact of ICT, e-business and e-commerce; an assessment of the pros and cons of various methodologies for the purposes of this study; an assessment of an indicative impact on GDP growth of Scottish businesses’ investment in ICT, using sectoral assumptions drawn from the growth accounting literature; and interviews with key e-business experts to test SQW’s hypotheses regarding the future for e-business in Scotland.
Economic impact study on Mullet Bay, St Maarten
The Mullet Bay Resort had suffered heavy storm damage and required extensive re-development. There were differences of view amongst the various stakeholders as to the appropriate nature of reconstruction, and this led to protracted delays. SQW was commissioned to explore the impact of those delays in relation to St Maarten’s tourism economy.
Economic impact assessment of MTV Europe Music Awards 2003
SQW was commissioned with NFO worldgroup to undertake an assessment of the economic contribution of the MTV awards hosted in Edinburgh in 2003. The work involved both a survey of attendees at the event and a programme of consultations with performers’ agents, journalists and corporate sponsors to determine their activity in Edinburgh. The work also involved consultations with local businesses to assess how they had been affected by the Awards.
East Kent Access – Economic Impact Report
SQW, BBP Regeneration and Cambridge Economic Consultants were commissioned by Kent County Council to conduct an Economic Impact Report (EIR) regarding a major road scheme in the Sandwich Corridor in East Kent. The EIR is a formal method of assessing the economic impacts of a proposed major road scheme in an identifiable regeneration area in the Regional Economic Strategy. The study included a local business survey, a property development review and a series of econometric projections. We consulted key stakeholders and held two stakeholder workshops during the course of the study. The final report included the formal EIRs for the two key phases of the scheme together with a review of the wider regeneration issues involved.
Economic impact appraisal of the 2014 Commonwealth Games
SQW was part of team commissioned to carry out a study of the potential costs and benefits of Glasgow’s proposals to host the 2014 Commonwealth Games. The work required assessments of the additional employment and investment in the city both at the times of the Games and through its legacy. This was carried out to Green Book standards and overseen by the Scottish Executive.