Community Development
Core Competencies for
Extension Professionals in the North Central Region

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2
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
The Foundations of Practice: Community Development
Core Competencies for Extension Professionals is composed of three major components:
• Understanding Communities and their Dynamics
• Developing Successful Community Initiatives
• Areas of Specialization and Emphasis

Understanding Communities and their Dynamics
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3
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Basic Understanding of Community
Community Demographics
Community Economics
Community Power Structure
Natural Resources and Sustainability
Community Situational Analysis
Community Development Process

Community Development
Core Competencies for
Extension Professionals in the North Central region
Community Economics

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5
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
This presentation has been adapted from an original presentation developed by
Bill Pinkovitz
Professor
University of Wisconsin Extension
Center for Community Economic Development

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
• Define local economy and learn how money and resources flow into and out of a community, and circulates within a community.
• Learn the meaning, and importance of a community’s economic base and and how to identify and analyze basic industries.

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
• Learn how to use traditional economic analysis tools to gain insights into local economies
• Learn new innovative ways to use existing data sources to analyze local economies from a different perspective.
• Learn how to access and use new powerful web based tool to analyze local economies

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8 com.mu.ni.ty a group of people in a physical setting with geographic, political, social, and economic boundaries, and with discernable communication linkages.
Shaffer, et al
Community Development
Core Competencies for Extension
Professionals in the
North Central Region e.con.o.my A system of human activity directed toward meeting human needs and wants by the deliberate allocation of scare resources (land, labor, raw materials, and capital).

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9
e.con.o.mic growth more jobs, more income, more sales, more customers.
Community Development
Core Competencies for Extension
Professionals in the
North Central Region e.con.o.mic de.vel.op.ment social, environmental, and economic change to enhance quality of life
Shaffer, et al

Employment
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0 goods producing service producing public sector
1955
2004

Income
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11
Retirement
5.1%
Public Assistance
0.2%
Social Security
5.1%
SSI
0.5%
Dividends, Interest, Rent
6.8%
Other
1.9%
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Self Employment
5.9%
Wage & Salary
74.6%

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12
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Land
Local Consumption

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13
$ $
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
$ $
Land
Local Consumption

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14
$ $
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local goods and services sold outside community
Raw Materials
Manufactured Goods
Labor
Insurance
Transportation
Financial Services
Capital

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15
$ $
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local goods and services sold outside community
Visitors purchasing Local goods and services
Tourists
Regional Mall
University
Health Care
Second Homes

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16
$ $
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local goods and services sold outside community
Visitors purchasing Local goods and services
Public dollars flowing into community AND other “non-earned income”
Social Security
Gov. Purchases
Federal Grants
Government Offices
Military Bases
Dividends
Interest

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Dollars leak out of the local economy in several ways:
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local businesses purchasing goods and services outside the community
$ $
Raw Materials
Inventory
Equipment
Labor
Capital
Professional Services
Financing
Investments

Dollars leak out of the local economy in several ways:
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18
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local businesses purchasing goods and services outside the community
Local consumers purchasing goods and services outside the community
Regional Malls
Internet Sales
Travel
Transportation
Financial Services
Investments/Savings
$ $

Dollars leak out of the local economy in several ways:
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19
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local businesses purchasing goods and services outside the community
Local businesses purchasing goods and services outside the community
Taxes and Social
Security Payments
Federal/State Taxes
Soc.Security Payments
$ $

Dollars leak out of the local economy in several ways:
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20
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Local businesses purchasing goods and services outside the community
Local businesses purchasing goods and services outside the community
Taxes and Social Security
Payments
Waste/Inefficiencies
Natural Resources
Inefficiencies
Opportunity Costs
$ $

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Increase INFLOWS
Decrease OUTFLOWS
Increase the TRADE AREA
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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22
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Attract new basic employers
Improve the efficiency of existing firms
Improve ability to capture dollars
Encourage business formation
Increase aids from broader governments
Glen Pulver

a.k.a Export Employers
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A basic employer is a business that brings money into the community. Businesses that sell most of their goods/services to non-local markets. A business where the inflow of dollars into the community exceeds the outflow of dollars from the community. Typically, basic employers include:
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Manufacturing
Farming
Mining
Tourism
Universities/Colleges
Hospitals
Insurance Companies
Transportation

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Businesses that primarily serve the needs of the local consumers are called non-export businesses.
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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Basic (Export) businesses provide the best opportunity to create additional jobs and income in a community.
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Unless a community is growing rapidly, or its trade area is expanding significantly, increasing the number of non-export businesses simply means that the pie
(market) will be cut into smaller slices, or existing businesses will disappear as new ones emerge.

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Defining a Community’s Trade Areas
Identifying Export Businesses in a Community
Identifying the Competitive Sectors in a Community
Estimating the Total Impact of Economic Activities
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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Defining a Community’s Trade Areas
Identifying Export Businesses in a Community
Identifying the Competitive Sectors in a Community
Estimating the Total Impact of Economic Activities
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

Traditional Methods
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Reilly’s Law : Method for determining a community’s retail trade area.
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Based on the premises that
1) People are attracted to larger communities to shop.
2) Peoples willingness to travel to shop is influenced by time and distance.

Traditional Methods
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Trade Area Capture : A method for estimating the number of customer equivalents who shopped in community for a specific product type (i.e. furniture).
• Based on state per capita spending for the product adjusted by local per capita income.
• Most often utilizes Census of Retail Trade data.
• Most useful when comparing TAC over time.

Traditional Methods
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Pull Factors: A method for estimating the number of customers a community attracts from outside the community for a specific product or service (i.e. furniture).
• Simply estimated by dividing the Trade Area Capture by the municipal population.
• Most often utilizes Census of Retail Trade data.
• Most useful when comparing Pull Factors over time

Using GIS
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Trade Area Analyst LT: An easy-to-use application utilizing Geographic Information Systems (GIS) software that enables users to easily map variety of markets by ZIP Code.
• Customers
• Employees
• Patients
• Visitors

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Defining a Community’s Trade Areas
Identifying Export Businesses in a Community
Identifying the Competitive Sectors in a Community
Estimating the Total Impact of Economic Activities
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

Location Quotients
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Location Quotient: A simple index that helps identify export and import industries by comparing the percentage of local employment in a specific industry to the percentage employed nationally in the same industry
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
LQ =
% of local employment in industry A
% of national employment in industry A

Employment by Sector
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Total Employees (2004)
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
U.S.
Indiana Allen Co, In
Total Employment 108,490,066 2,451,737 160,610
Manufacturing
Construction
Retail
14,257,380 571,481
6,916,398 147,890
15,060,686 332,900
29,504
9,980
20,163 http://www.BLS.gov

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Percentage of Total Employment (2004)
SECTOR U.S.
Indiana Allen Co, In
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Manufacturing
Construction
Retail
LQ =
13.1%
6.4
13.9
18.4%
13.1%
= 1.40
23.3%
6.0
13.6
18.4%
6.2
12.6
Source: BLS.gov

by Sector
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
SECTOR
Manufacturing
Construction
Retail
U.S.
1.0
1.0
1.0
Indiana
1.77
0.95
0.98
Allen Co, In
1.40
0.97
0.90
Source: BLS.gov

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Manufacturing Employment (2004)
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
County
Allen Co, Indiana
Daviess Co, Indiana
Elkhart Co, Indiana
U.S.
% of Total
Employment
18.37%
23.96
54.55
13.14
Location
Quotient
1.40
1.82
4.15
1.00
Source: BLS.gov

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LQ > 1.25
LQ < .75
Export Industry
Import Industry
LQ > .75 and < 1.25
Self Sufficiency
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

A simple tool to help identify local:
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Export and import industries
Existing and potential industry clusters
Economic strengths
Development prospects
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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The Good News
U.S Department of Labor
Bureau of Labor Statistics
Quarterly Census of Employment and Wages
Community Development
Core Competencies for Extension
Professionals in the
North Central Region http://www.bls.gov

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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http://www.seta.iastate.edu/takecharge /
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Take Charge

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http://www.seta.iastate.edu/takecharge /
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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Defining a Community’s Trade Areas
Identifying Export Businesses in a Community
Identifying the Competitive Sectors in a Community
Estimating the Total Impact of Economic Activities
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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Growth or decline in the national economy
Growth or decline in the industry sector
Relative strength of the local industry/economy
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Shift Share Analysis provides an estimate of the impact of these three factors by separating the increase or decrease in local employment in specific industry sectors into three components:
1. National Growth Share
2. Industrial Mix Share
3. Local Share

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
National Growth Share: The increase or decrease in local employment that is attributable to the growth or decline in the national economy .
Industrial Mix Share: The increase or decrease in local employment that is attributable to the growth or decline in a specific industry sector .
Local Share: The increase or decrease in local employment that is attributable to the relative strength or weakness of the local industry/economy .

Employment Trends by Industrial Sector
LaGrange County, IN (1994 to 2004)
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Sector
Manufacturing
Construction
Leisure/Hospitality
Financial Activities
Public Administration
Educ./Health
Services
Total Employment
Employment
(1994)
5,488
302
737
305
11
1,556
Employment
(2004)
5,841
441
924
264
8
1,645
Change % Change
353
139
187
-41
-3
89
6.4%
46
25.4
-13.4
-27.3
5.7
10,687 11,978 966 9.04
local employment in industry A year 1 x average national total employment growth rate for the period = National Growth Share
302 jobs x

% Change in Employment by Industrial Sector
LaGrange County, IN (1994 to 2004)
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Sector
Manufacturing
Construction
Leisure/Hospitality
Financial Activities
Public Administration
Educ/Health Services
Total Employment
LaGrange Co.
6.4%
46
25.4
-13.4
-27.3
5.7
9.04
Indiana
-9.1%
10.9
20.4
2.2
6.9
19.7
7.89
U.S.
-16.1%
37.8
25.4
16.3
8.6
25.2
14.9
local employment in industry A year 1 x average national total
employment growth rate for the period = National Growth Share
302 jobs x .149
= 45 jobs

Industry Mix Share
% Change in Employment by Industrial Sector
LaGrange County, IN (1994 to 2004)
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Sector
Manufacturing
Construction
Leisure/Hospitality
Financial Activities
Public Administration
Educ/Health Services
Total Employment
LaGrange
County
6.4%
46
25.4
-13.4
-27.3
5.7
9.04
Indiana
-9.1%
10.9
20.4
2.2
6.9
19.7
7.89
U.S.
-16.1%
37.8
25.4
16.3
8.6
25.2
14.9
local employment in industry A in year 1 x (national industry growth rate
– national average growth rate) = Industry Mix Share
302 x (.378 - .149) = 302 x .229 = 69 jobs

% Change in Employment by Industrial Sector
LaGrange County, IN (1994 to 2004)
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Sector
Manufacturing
Construction
Leisure/Hospitality
Financial Activities
LaGrange
County
6.4%
46
25.4
-13.4
Indiana
-9.1%
10.9
20.4
2.2
U.S.
-16.1
37.8
25.4
16.3
Public Administration -27.3
6.9
8.6
Educ/Health Services 5.7 19.7
25.2
Total Employment 9.04
7.89
14.9
local employment in industry A in year 1 x (local industry growth rate
– national industry growth rate) = Local Share
302 x (.460 - .378) = 302 x 0.082 = 25 jobs

Employment Trends by Industrial Sector
LaGrange County, IN (1994 to 2004)
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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Sector
Manufacturing
Construction
Leisure/Hospitality
Financial Activities
Public Administration
Educ./Health
Services
Total Employment
Employment
(1994)
5,488
302
737
305
11
1,556
10,687
Employment
(2004)
5,841
441
924
264
8
1,645
Change % Change
353
139
187
-41
-3
89
6.4%
46
25.4
-13.4
-27.3
5.7
11,978 966
45 jobs (NGS) + 69 jobs (IMS) + 25 jobs (LS) = 139 jobs
9.04

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Tippecanoe County, Indiana http://www.seta.iastate.edu/takecharge/

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http://www.rcr.uga.edu/guide/sshare1.html
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Shift Share is:
• Descriptive, not diagnostic
 Does not tell you WHY
 Does not identify comparative advantages
• Minimizes the impact of business cycles

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Q: Why is the arrival of a new business or the expansion of an existing business a welcome event in most communities?
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
A: Jobs and Income

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More GOOD NEWS: A new export business or business expansion usually creates more jobs and generates more additional spending and income than the jobs, spending, and wages directly attributable to the business.
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
This is called the Multiplier Effect

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
The Multiplier Effect is comprised of three components:
1. Direct Effects: Labor, goods and services purchased by the business
2. Indirect Effects: Increase in local spending by firms that supply the business
3. Induced Effects: Increase in local spending by employees of the business
Total Impact = Direct + Indirect + Induced

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
• Output Multiplier Total increase in local spending that occurs to produce one dollar of output.
• Employment Multiplier Total increase in local employment (direct, indirect, and induced) that results from each additional employee at the firm.
•
Income Multiplier Total increase in local income related to each dollar paid in wages, salaries, and profits to local employees and owners of the firm.

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Source: Western Rural Development Center

Which has the larger multiplier?
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61
Wal-Mart Supercenter with annual sales of $81 million that employs 400 people
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
A cheese factory that employs 10 people and has annual sales of $20 million

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
What does Wal-Mart buy locally?
• Inventory
• Labor
• Transportation
• Supplies
• Utilities
• Accounting services
• Marketing
• Financing
• Repairs
• Maintenance
• Legal Services

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Community Development
Core Competencies for Extension
Professionals in the
North Central Region
What does a cheese factory buy locally?
• Raw Materials
• Labor
• Inventory
• Transportation
• Supplies
• Utilities
• Marketing
• Accounting services
• Legal Services
• Financing
• Repairs
• Maintenance

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64
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
What do cheese factory suppliers buy locally?
• Raw Materials
• Labor
• Inventory
• Transportation
• Supplies
• Utilities
• Marketing
• Accounting services
• Legal Services
• Financing
• Repairs
• Maintenance

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65
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
What do Wal-Mart suppliers buy locally?
• Raw Materials
• Labor
• Inventory
• Transportation
• Supplies
• Utilities
• Marketing
• Accounting services
• Legal Services
• Financing
• Repairs
• Maintenance

Where people live and work
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66
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Live in: Work in:
Tippecanoe, IN Tippecanoe, IN
White, IN
Benton, IN
Warren, IN
Fountain, IN
Montgomery, IN
Boone, IN
Source: U.S.
Census Bureau
Clinton, IN
Carroll, IN
Elsewhere
Grand Total
Workers
67,731
495
256
64
140
355
135
724
409
3,036
73,345
67,731
÷ 73,345
= 92.35%

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http://www.uwex.edu/ces/cced/indicate.html
Community Development
Core Competencies for Extension
Professionals in the
North Central Region

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68
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
Community Economic Analysis: A How to Manual, Hustedde,
Shaffer, and Pulver, http://www.ncrcrd.iastate.edu/pubs/contents/186.htm
Using Employment Data to Better Understand Your Local
Economy, Martin Shields, http://cecd.aers.psu.edu/pubs/using_employment_ data_to_better.htm
SETA Office of Social and Economic Trend Analysis , Iowa
State, http://www.seta.iastate.edu/
Location Quotient Calculator , Bureau of Labor Statistics http://data.bls.gov/LOCATION_QUOTIENT/servlet/lqc.ControllerSe
rvlet
Shift Share Calculator , University of Georgia, http://www.rcr.uga.edu/guide/sshare1.html

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69
Community Power Structure
March 2, 2006
1:30 to 3 p.m.
Community Development
Core Competencies for Extension
Professionals in the
North Central Region
The ability to identify who the decision makers are in the community, the resources they affect, and the power structure is crucial in gaining access to a community, gaining trust and credibility, and being effective in educational programs.