If you’re trying to keep tabs on your economy and make decisions about where to direct training or development resources, there’s a chance you might be overlooking industries that need the most help. Looking at labor market data in terms of high-growth or high-wage sometimes yields only the most obvious business. To find truly unique, up-and-coming industries, you’re going to have to dig a bit deeper.
This video demonstrates how to use “location quotient” to find specialized industries making a splash in your region.
Here’s the process the video outlines:
Log in to Analyst. Check your region and timeframe. You’ll want to make sure that your timeframe extends back several years. For this demonstration we used 2005 to 2012.
Click into Economy, then into Industry. Here, check to make that you’re using 6-digit detail for the industry table.
Under “Data Options” make sure that you’ve got “National Location Quotient” and “Wage and Salary plus Supplements” checked.
Now you’ll apply three filters:
1. Open a filter and set it to “2005 National Location Quotient”, “less than or equal to”, and then type “1” in the text box. This will remove all industries which were already highly specialized in the region as of 2005.
2. Open a new filter and set it to “2012 National Location Quotient”, “greater than or equal to”, and then type “1” in the text box. This will remove all industries which did not grow to a location quotient of at least 1.0 from 2005 to 2012.
3. Scroll to the bottom of the table. In the “2011 Earnings” column, at the very bottom, you’ll find the average earnings for these industries in the region. Use that number, or an approximation of that number, in a new filter. You’ll set the filter to “2011 Earnings”, “greater than or equal to”, and then input the average earnings number into the text box. In our example this was “50000.”
Now you’ve got your list. The final step is to simply click on the “Change” column. This will sort the table by the growth over this period, with the highest growth industries at the top. You’re now looking at a list of industries which have moved from less concentrated than the nation to more concentrated than the nation, focused on high-wages, and sorted by high-growth.
These are the emerging industries in your region, the ones carving out new space for themselves which would benefit from regional support.
If you’d like more help finding emerging industries for your metro area, county, or larger region, email Josh Stevenson or contact us here. Find out more about EMSI here and reach us via Twitter @DesktopEcon.