Announcing the 2021 Fourth Economy Community Index!
We really are excited to share updated output from our Community Index model, which is now available on the Fourth Economy Community Index App. To that end, here are some quick notes on the whats, whys, and hows of the Fourth Economy Community Index.
Where did this come from?
For the last several years, Fourth Economy has used indicator data to measure community vibrancy and economic success. Originally, we published lists of communities that we found to be performing particularly well. Over time, as we’ve learned more about how different indicators interact, the process has become more analytically complex. In 2018, we published a tool to capture data in an app, which includes detailed scores for counties across the US.
Remind me: what is it?
Let us start with an easier question: what is it not?
High on the long list of “things the Community Index is not”, you will find the following:
A perfect model of economic success
Predictive of future events
A black box algorithm with such mathematically complex components that it can’t be understood by us meager humans
A replacement for the type of analytical work we do with clients
Still, for all the things that the Index is not, there are several reasons why we use the model and its framework as critical components in many of our projects. Simply put, the Community Index model allows us to think both quantitatively and comprehensively about key issues that guide our work, and to make robust comparisons across the country.
An equity focus
This year, we updated the Community Index model to include new and updated sources of data with a greater focus on equity. Equity focused indicators include female business ownership, disparity in business ownership by race/ethnicity, wage equity, homeownership disparity, income inequality, poverty disparity by race, and diversity index. As is the case with the broader model, no specific mix of these indicators generates an ideal or perfect score (no one recipe for an equitable community), but in general we find in our work that more diversity and more equitable economic outcomes create stronger economies and more vibrant communities, and the Community Index model now more strongly reinforces that understanding.
Importance of regional economies
Our top ten lists are filled with examples of areas that score highly. When adjacent counties score highly enough, they are combined into regions on the list. In the past we may have had only a few regions with adjacent counties that scored highly enough to be grouped together in the top 10. This year, we had seven grouped regions:
Hawaii (Honolulu, Maui, Hawaii, and Kauai Counties)
Oakland and San Francisco, CA (Alameda and San Francisco Counties)