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Economic Impacts Brief: The Economic Development Return on Public Investment in Indian River County .................................................................................................................................................................................. The outcomes associated with the performance-based incentives being studied generate economic impacts that extend beyond those directly related to their operations. These "spillover" or multiplier impacts are the result of each business activity's supply relationships with other firms operating within the region, the proportion of business Value Addedz that accrues to households in the form of household and capital income, and the propensity of households to spend income on goods produced within the local area. Direct Impacts The direct impact of the operations of companies that received incentives is comprised of all of their expenditures for labor and materials used in the production process, ongoing capital expenditures necessary to support operations, and local area expenditures made by business partners and customers from outside of the area during their local business dealings with the firms. Indirect and Induced Impacts Utilizing the direct economic impacts discussed, indirect and induced economic impacts of the current operations of companies that received public incentives were calculated using an extended input-output model of the Indian River County (IRC) economy. These comprehensive direct, indirect and induced economic impacts are summarized as follows. An estimated 639 jobs for local residents result directly or indirectly from public incentives awarded to qualified companies in Indian River County (IRC) since 2007. These job grants were provided to nine different firms and are directly responsible for 337 jobs, mostly in the Manufacturing, Knowledge -Based Services and in smaller numbers in other sectors. The Knowledge -Based Services and Manufacturing sectors pay, on average, higher wages than the County average. The indirect and induced job creation process reaches deeply into all sectors of the local economy. An additional 135 jobs are supported via indirect economic effects. Lastly, 167 jobs are generated by induced spending effects. Therefore, the total number of jobs, directly, indirectly and induced, supported by public incentives in Indian River County is estimated at 639 - making a significant contribution to employment opportunities in IRC. (See Tables 1 and 2 on the next page.) z"Value Added" refers to the difference between business revenues and the cost of non -labor and non -capital inputs used to produce goods and/or services. .................................................................................................................................................................................................................................. The Washington Economics Group, Inc. (WEG) Page 15 7. A, -7.