The plan is solid, the numbers add up, the idea has been approved. And yet, the project remains stalled: a yes is missing: the one from those who authorize, those who host, those who finance. Socioeconomic impact analysis helps unlock that “yes”.
The value of many investments exists. The problem is proving it.
Those who manage large events, those who must make decisions on major investments, those who lead a large company with physical assets - a power plant, a rail section, a real estate complex, a factory, a network – know this situation well.
The investment holds up financially. The ROI is in line. The board has said yes. Then the project hits a wall: an authority that must authorize, a community that opposes, a body with which to negotiate a concession, an investor demanding ESG evidence.
They all have, in different forms, the same question: "how much is it worth to us?". For the territory, for employment, for public finances.
Socioeconomic impact analysis answers this question: it quantifies how much GDP, how much employment and how much tax revenue an investment activates in the economy that hosts it. We highlighted this in the introductory article on Socioeconomic impact analysis, in which we explain what this analysis measures and how the model works. Here we address the other half of the question, the when: in which concrete moments, for an organization, that tool makes the difference.
Use cases are many and cross-cutting: they concern both private companies and public organizations, both the design phase and the communication phase. But there is a common thread: in all of them, the analysis turns impact into an argument.
Permitting and public debate: the argument that unlocks the project
It is the most recognizable terrain for those who manage infrastructure and plants. An authorization procedure, an EIA, a public debate, an urban planning variance: in all these steps, demonstrating that the project generates value for the host territory shifts the balance, as in the case of the study conducted on the construction site of the Strait of Messina Bridge, for example.
Impact analysis often enters permitting dossiers with verifiable figures on the employment activated and the local supply chain, and feeds the economic-financial plan of works under project financing or public-private partnership.
It can be used effectively also in a public context: the availability of KPIs measuring how many jobs, in which territory, for how long is a convincing element, useful for mitigating the positions of the opposition.
When impact figures become a negotiating lever
When sitting down at a table - with a prefecture, a region, a municipality or a private counterparty in cases of extraordinary transactions - impact KPIs are a genuine negotiating lever. Think, for example, of the negotiation concerning an infrastructure redevelopment project, for example a stadium.
Impact figures are needed in the awarding of a concession, where the impact generated justifies the award. They are needed in defining the compensations owed to a territory, anchoring them to a measured value and not to a blind negotiation. And they are needed in the contract drafting phase, where a quantified impact becomes a defensible clause.
Public funds and State aid: accessing and declaring
Many investments with physical assets rely on public funds and incentives. Here, socioeconomic impact analysis strengthens the application to a call for funding, because it documents in a technically robust way the expected benefits of the intervention. And it becomes part of the assessment documents documentation when a call for the award of an incentive requires demonstrating the effect on the economy of a financed investment. OpenEconomics has done this often, end-to-end, on projects in the energy sector.
Stakeholders, ESG and brand: communicating the value generated
Socioeconomic impact analysis is widely used for communication purposes, particularly in its two most relevant declinations for a large organization: institutional relations and brand value.
On the institutional and media front, the analysis is one of the most effective tools for building and maintaining a solid relationship with public administration, local authorities and regulators. It feeds the dialogue with verifiable and defensible data: how much employment the organization generates in the territory, how much GDP it activates, how much tax revenue it produces. And it provides concrete content with which to manage media relations.
On the brand and marketing front, socioeconomic impact enters ESG reports as a concrete measure of shared value, beyond the boundaries of the financial statements. It becomes the argument for shareholders and the basis for quantifying brand value on real effects, not perceptions. In a post-greenwashing context where reputation is built with numbers, having a verifiable analysis is the difference between credible communication and one exposed to market scrutiny.
This is the logic with which, together with FIFA, OpenEconomics has measured the socioeconomic impact of the world’s major football tournaments: there, the value generated is the message.
Socioeconomic footprint: how much your company weighs on the local economy
A particular case of application of impact analysis is when the object of the analysis does not concern a single “asset”, but a company as a whole. The socioeconomic footprint measures how much an organization in itself contributes to the economy of the territories in which it operates, along its supply chains, in terms of GDP, employment, income and tax revenue. It is the basis for understanding, and then demonstrating, one’s systemic weight. It is needed when assessing the socioeconomic relevance of a new site. And it serves as the foundation for everything that comes afterwards: from relations with institutions to communication.
Why socioeconomic impact analysis matters for those who must decide
One thread links all these use cases: ROI speaks the language of shareholders. Socioeconomic impact analysis translates the same investment into the languages of all the other stakeholders: the authority that authorizes, the customers who buy, the community that hosts, the body that finances, the investor that evaluates.
An interesting point, when looking at the public-private relationship. The same tool works on both sides of the table. If on one hand companies use impact analysis to “ask”, administrations use it to “evaluate”. Knowing that the counterpart reasons with the same logic is, in itself, an advantage.
One final caveat: an overly aggregated figure is of no use at any of these tables. What makes an analysis actionable are the scale (territorial granularity and/or sector granularity) and the insights gathered from the impact figures. The quality of the analysis makes the difference between a number to be filed away and an argument to bring to the Board. Territorial granularity, sector detail and interpretation of results are not technical details: they are what makes the analysis usable.
In the next article of the series we will develop a series of real impact analysis case studies, application by application. To explore how to apply socioeconomic impact analysis to your own organization, you can consider a discovery call.
.png)
.png)