Economic Growth and Diversification Plan

The economic growth and diversification plan, to be developed with the initial Virginia Growth and Opportunity Funds (VGOF), is to be a document that each Regional Council will use to identify economic opportunities, needs, and challenges, establish priorities among those opportunities, and outline needed enhancements where GO Virginia grant funds can (a) support collaborative programs between at least two or more localities that will (b) lead to the creation of more higher paying jobs. Such jobs should be primarily based on sectors and clusters that ultimately generate new revenues from out-of- state sources.

The implementation of these plans should focus on higher paying jobs (above the median wage) for the region that will bring new investment, enhance the competitiveness of the region, and diversify the economy of the region, in turn supporting the growth of the Commonwealth's economy. The plan should encourage innovation and be flexible to incorporate new ideas and opportunities that are identified by the Regional Council over time. Finally, the plans, and ultimately, the projects, should focus on activities that are sustainable and have the ability for long-term growth.

Section I - Intent

GO Virginia is intended to facilitate regional collaboration to grow and diversify the economy through supporting projects leading to the creation of more, higher paying jobs (primarily based on revenue derived from out-of-state sources) and addressing gaps in workforce and other factors that impact the success of growth and diversification programs at the regional level. Programs and projects recommended by the Regional Councils and approved by the Board shall be consistent with the regional economic growth and diversification plan. The plan should not specifically outline or limit the potential projects that could be later funded by the GO Virginia Board but instead serve as the guide for evaluating which potential projects best address the needs and opportunities identified in the plan.

Once a Regional Council has been certified, the Council will prepare a work plan and budget for the development of the economic growth and diversification plan that will be submitted to the GO Virginia Board, through the Department of Housing and Community Development (DHCD), for approval and funding. The budget must specifically justify how funds are to be spent and the process used by the Regional Council to determine the requested funding amount.

As outlined in the state appropriations act, initial GO Virginia funds may be used to support organizational and capacity building activities. This includes identifying regional economic priorities and building upon baseline economic analysis to inform priority and opportunity identification and to provide a foundation for regional gap analysis of skill levels in the workforce versus the skills most likely needed over time based on expected employment and organizational changes.

It is also expected that some portion of these funds allocated to each region may be used for initial incremental costs associated with the establishment of the Regional Council. GO Virginia funds should not be used to supplant existing funds or other resources already available to assist the Regional Council with the development of the plan, and the Board reserves the right to consider the amount of money allocated to administrative expenses, and the efficiency in minimizing administrative costs, in making its funding allocations to Regional Councils.

Each Regional Council may apply for an initial grant in FY 17, not to exceed $400,000. Additional planning funds may be requested in subsequent fiscal years if appropriated by the General Assembly. Currently, an additional up to $250,000 is available to each region in FY 18. Using the priorities outlined in these guidelines, the Board will determine the amounts to be distributed to each Regional Council. Funds not allocated to Regional Councils in the initial funding round may be reserved for either additional planning and analysis or other capacity building activities that benefit regions at the discretion of the Board.

Section II - Match Requirement (Pending approval of budget)

Although a local match is not required for the grant in the first year to support the development of the regional economic growth and diversification plan, the Board will take into account work plans and budgets that have a local match, or other funds that may or have been available to support the development of the economic growth and diversification plan, in making its final funding allocations, up to the maximum provided for in the state budget, to a Regional Council.

Section III - Growth and Diversification Plan

Each Regional Council shall develop and provide, to the Board for approval, a regional economic growth and diversification plan in accordance with these guidelines. Plans should be based on a realistic and empirically derived understanding of the regional economy and its potential. The plan should establish priorities for future use of GO Virginia project grants and take into consideration other studies and analyses related to development and validation of an economic diversification strategy as it relates to the creation of higher paying jobs. In developing the plan, Regional Councils are advised that the projects and programs which could ultimately be funded by the GO Virginia Board need only include two or more localities.

It is not the intent of GO Virginia to duplicate recently completed or ongoing strategic planning efforts, or to serve solely as an implementation model for earlier plans. This is not a regional strategic economic development plan, nor is the plan envisioned to be comprehensive in addressing all challenges that face a particular region, but instead, the plan should focus on priority areas that accomplish GO Virginia's goals. Participation in the process of conducting a critical analysis of regional issues and prioritizing potential actions is essential, so the plan is intended to seek input from impacted stakeholders, focus attention on critical issues of regional economic growth and diversification, and identify and prioritize opportunities that could be pursued. The analysis should challenge existing assumptions about the region's economy and inform the Council on how the region may develop growth opportunities. Efforts should also include identifying whether the appropriate conditions exist for a region to effectively realize the priorities and strategies outlined in the plan.

The Board, and its administrative support, will provide technical assistance and review, upon request, during plan development.

The plan will identify key needs and opportunities and suggest leadership within the Region to:

  1. Promote private sector growth and objectively derived priority areas of opportunity in the region leading to higher paying jobs by strengthening and diversifying the region's economy based primarily upon on revenues derived from out-of-state sources.
  2. Conduct a focused gap analysis to identify economic sector gaps and possible growth areas and assess workforce availability/gaps related to the opportunities and needs identified and in the plan and review the existing drivers of higher paying jobs in the economy. The analysis should focus on priority areas identified as part of the diversification plan and not needs across the entire regional economy. Regions should reference the Virginia Workforce Board/Regional Workforce Investment Board gap analysis and consider other relevant state level strategic plans that contain data and elements related to the priorities of the region.
  3. Illustrate potential actions the collaborating business, education, government, and other stakeholders in the region could pursue to expand economic opportunity, grow and diversify the economy, and align worker training programs with the education and skills needed by employers and potential employers in the region that leads to the creation of higher paying jobs.

As previously outlined, the plan is not intended to outline the exact projects that could be funded by GO Virginia project funds; but instead, should serve as the framework to guide future decisions by the Regional Council and the Board in determining which potential projects might address the plan's priorities and other statewide goals established by the Board.

Section III (A) - Requirements

At a minimum, and to assist with establishing baseline data for further evaluation, the plan should include the following elements:

  1. Data on growth of the region- including both historical trends and comparative data to other similar regions, the state, and the nation, including:
    1. Annual change in average personal income since 1996 (household income per Census, or BEA personal income)
    2. Growth of key employment sectors since 1996
    3. Job growth year by year and cumulative since 1996
    4. How changes in employment and wage patterns have impacted regional economic growth since 1996 (i.e. the multiplier effect of jobs/wages lost or gained)
    5. Identify commuting patterns into and out of the region and the impact of such a patterns on the ability to attract and or retain high paying jobs
    6. Change in the number of jobs supported through revenues derived from out-of-state sources

    2. Identify significant drivers of the existing economy and growth trends of these drivers

    3. Identify existing efforts to diversify and grow and/or retain higher paying jobs and to enhance access to such jobs.

    4. Identify existing or potential business sectors or clusters which can lead to sustainable, scalable, future growth in the region and the process used to select those sectors or clusters including how growth in them can be achieved. The identification of such sectors or clusters must be based on empirical data and which is based on results that are realistic given the drivers of the region's economy.

    For purposes of the plan, a cluster is a group of companies in a business sector with an affiliated supply chain, the relationships between and among industries in a region that support economic growth, workforce training resources, and other related assets.

    5. Identify workforce gaps in the availability of immediately employable talent in both the existing significant drivers of the economy as well as the suggested sectors or clusters and prioritized opportunity areas.

    1. If a gap exists, identify current efforts to address, being specific as to the skills/credentialing/experience/education required and whether these efforts are adequate to address the shortage. Activities to import talent from outside Virginia to address gaps should also be considered.

    6. Commuting patterns (both existing and potential) for the workforce to other regions/states and whether such activity affects the region's ability to attract and or retain high paying jobs.

    7. Identify intraregional economic differences and how the plan will address the goals of GO Virginia in a way that benefits all parts of the region. The GO Virginia Board and staff will work with regions that have similar priorities and project ideas to encourage the regions to work together or seek joint opportunities.

    8. Potential performance metrics as determined and defied by the Region based upon direction from the Board.

    Section III (B) - Guiding Principles

    Following a review and summary of this baseline data, the plan should be guided by the following principles:

    1. The Regional Council shall acquire the baseline understanding necessary to produce a factually informed understanding of the region's current economic structure and how that existing structure predicates the range of potential and likely opportunities available. This would include a review of current and relevant existing local and regional strategic plans to provide baseline information (including but not limited to Comprehensive Economic Development Strategies, Workforce Investment Board regional plans, state level industry, workforce, and economic development strategic plans, trade association plans).
    2. Members of the Regional Council shall play an active role in reviewing and analyzing regional information; shall participate in completing a critical analysis of the region (including its economic structure, existing development programs as well as future needs and opportunities); shall participate in identifying and prioritizing the needs and opportunities; and shall identify potential actions to address those needs and opportunities.
    3. The Regional Council may hire a consultant to assist in the development of the plan or direct the hiring of the consultant through the support organization.
    4. The regional planning process is intended to help identify needs and opportunities and also outline a prioritized plan of action that shows measurable results over a two-year period. An outline about how these efforts can be sustained over a 5-10 year horizon should also be provided. The plan must be revisited, on no less than a biennial basis, to determine if adjustments are required to better meet regional needs or take advantage of new opportunities. The plan may be amended by the Regional Council at any time to address emerging opportunities or special needs. Such amendments shall be subject to review by the Board.
    5. The plan will outline priorities for the region and identify how the region could undertake activities to grow existing business, fill gaps in existing sector presence, scale up existing companies (particularly around existing or emerging supply chains and clusters), support entrepreneurs, identify opportunities for the commercialization of research, and examine potential joint economic development activities. The plan should also assess the number of small and minority owned businesses, and promote their development in the region, if such activities lead to the creation of higher paying jobs.
    6. The plan should address the elements outlined in the Growth and Opportunity Act and how strategies are aligned with other related programs including, as appropriate, the Virginia Research Investment Committee (VRIC), the Collaborative Jobs Act, and the State Council for Higher Education Virginia (SCHEV) credentialing program. In addition, the plan should address how it aligns with other statewide and regional plans that may relate to the identified strategies and projects.
    7. The Regional Council shall provide for public participation and input from affected stakeholders to help identify regional needs and opportunities for cooperation. The method of receiving input and the information gained must be documented in the plan.
    8. The role of the Regional Council and other relevant agencies and entities involved in the development of the plan and potential implementation of the plan should be considered. Potential sources of matching funds should be identified, though specific commitments and amounts are not required until applications are sought to support regional projects. Note that any requested funds from the Board must be matched with non-state funds, however, additional match (above the amount of match requested from the Board) from state sources is encouraged.

    Section IV - Reporting Requirements

    Each Regional Council will submit an initial report to the Board by July 1, 2017 that will include:

    1. Summary of Regional Council formation process, membership, and structure
    2. Details of the support organization
    3. A copy of the Bylaws
    4. A status update on the economic Growth and Fiversification plan and how the region will approach developing the plan

    To assist in the completion of the Board's annual report requirement, each Regional Council awarded a grant from the fund will submit an annual report to the Board by October 15. The plan due in 2017 shall focus on progress made since the initial report on identifying projects that could be funded to address the needs and opportunities identified in the regional growth and diversification plan. Subsequent annual reports will include information about the following items:

    1. Status report on region's overall progress in addressing the needs and opportunities identified in the region's plan for economic growth and diversification.
    2. Assessment of the impact and outcomes from regional activities supported by grants from the Fund
    3. Performance metrics as identified in the economic growth and diversification plan and consistent with measures adopted by the Board
      1. Performance measures should be accessible, realistic, and structured in a way that will drive decision making and enhance transparency.

    Each Regional Council will certify to DHCD that it is in compliance with state disbursement requirements. DHCD will review the compliance of each Regional Council with the performance metrics established for individual projects and advise the Board on any actions that are taken to adjust or terminate funding for projects that do not fulfill these metrics.

    Section IV - Evaluation Criteria

    Prior to submitting the proposed regional economic growth and diversification plan to the GO Virginia Board for review and approval, DHCD will afford an opportunity for appropriate State Agencies to review and comment on the plan. The purpose of this review shall be to ensure sufficient empirical review and basis was used to justify the recommendations in each plan and alignment with overall state goals.

    When making decisions about funding for each Regional Council to undertake its own, and the approval of such plan, the Board will evaluate the following:

    1. The efficiency with which GO Virginia funds are spent by the Regional Council. Specifically, proposals should minimize the amount of funds allocated to overhead and administrative expenses.
    2. The amount, if any, of any matching or other leveraged funds to support the plan development.
    3. Alignment of the proposed plan with the general statewide goals of GO Virginia and the performance metrics adopted by the Board.
    4. Opportunities for alignment with skills gap analyses and other workforce plans.
    5. The Board will take into consideration and encourage projects that have interstate, inter-regional, and other beneficial forms of collaboration as a result of the proposed activity.

    Section V - Useful Resources

    The following resources may be useful in providing additional direction or data to regional councils in developing their plans:

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Serving the GO VA Council for the
Crater & Richmond Planning Districts
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