Tuesday, September 29, 2015

New Upper Mississippi River Profile Paints an Intriguing Economic Picture, Points Toward Future Study Opportunities

Preliminary results of a 2015 Upper Mississippi River Economic Profile were unveiled on September 15 during the Mississippi River Cities and Towns Initiative’s annual organizational meeting in Dubuque, Iowa.  The study area included 60 counties bordering the River from Minneapolis-St. Paul to the Mississippi River's confluence with the Ohio River at the southern tip of Illinois (see map to the left).  Revenue and employment within nine economic sectors in that area were the focus of the analysis and of the two-page brochure  summarizing the preliminary results. The economic sectors that were evaluated were those determined by the study authors to be river-related, and included navigation, manufacturing, agriculture, tourism and outdoor recreation.

Study results indicate that the nine evaluated sectors in those 60 Upper Mississippi River counties generate over $253 billion in revenue annually, and sustain over 755,000 jobs.  The vast majority of jobs (92.3 percent) and revenue (93.2 percent) occur in the three largest industry sectors: agriculture, manufacturing and tourism (see charts, below, from the preliminary results' brochure). The results presented at the September 15 mayors' meeting are preliminary.  A complete analysis will be made available in a report expected to be completed in several months.  The economic analysis was produced through a collaboration of the U.S. Fish and Wildlife Service, the Upper Mississippi River Basin Association and The Nature Conservancy.
Click to enlarge

A similar analysis was prepared for the U.S. Fish and Wildlife Service and Department of the Interior in 1999 (Industrial Economics, Inc. March 1999. Economic Profile of the Upper Mississippi River Region). That earlier analysis suggested that the same 60 Upper River counties supported an annual economy of $145 billion (in 1997 dollars) and 867,646 jobs across ten economic sectors (the 1999 profile included an "Other Natural Resource Services" economic sector not included separately in the 2015 study).

A Lower Mississippi River Economic Profile was prepared for the Lower Mississippi River Conservation Committee in 2014 using a similar methodology (Industrial Economics, Inc. and Dominika Dziegielewska-Parry. February 2014. The Economic Profile of the Lower Mississippi River: An Update).

Future River Economy Study Opportunities
The 2015 Upper River profile (and its 1999 predecessor) did not set out to evaluate the extent to which the River actually impacts the river-related economic sectors in the 60 counties that line its banks.  While there may be strong anecdotal evidence suggesting that the River influences regional economic vitality, a causal link between the River and the economic indicators (jobs and revenue) in the nine economic sectors evaluated was not analysed during these studies. And it would be unreasonable to expect that direct relationship to be evident in the study results.  The studies' methodologies do not lend themselves to evaluating a possible correlation - let alone causal link - between the River and the region's economic strength within the sectors that were analyzed. Evaluating that causative connection could be a future study opportunity that might yield results useful in supporting Upper Mississippi River stakeholder assertions that the Upper River directly contributes to a healthy regional economy.

Parties supporting the 2015 Upper River study recognize that its areal extent was limited (in part, so that the 2015 and 1999 results could be compared), and that the geographic scope of future economic analyses could be expanded.  Those organizations (including the Fish and Wildlife Service, Upper Mississippi River Conservation Committee, Mississippi River Cities and Towns Initiative, The Nature Conservancy, Missouri Department of Natural Resources and Upper Mississippi River Basin Association) are reported to be exploring opportunities to expand the study area to include the Illinois River and the portion of the Upper Mississippi River from Minneapolis-St. Paul to the River's source. They also intend to evaluate ways to better capture the economic benefits of the River farther inland from the immediate 60-county corridor.

Neither the 1999 nor the 2015 analysis was designed to assess or attribute an economic value to the services provided by the River ecosystem to the region.  Such an evaluation would be resource-intensive and ambitious in scope, yet, ecosystem services are arguably among the Upper Mississippi River region’s most valuable assets and key to attaining long-term sustainable development. Conventional economic analyses that focus only on employment, revenue or other traditional fiscal indicators by definition miss opportunities to explore the economic benefits provided by the River ecosystem to the people living in the region; benefits that could be cited in efforts to protect and restore the River system providing those services. Future River region economic analyses would plausibly be more robust if they included an assessment and valuation of those services.

Such studies, in themselves, could provide the accurate economic information needed to assess potential or actual impacts to the economy from social and ecosystem insults such as climate change, floods and environmental degradation, or to assess the improvements to the economy that might be realized through ecosystem restoration initiatives.

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