Economic Development Recovery and Resiliency Playbook - Flipbook - Page 45
above 1.0 indicating above-average concentration.25 For resiliency and disaster recovery, the LQ can point to potential future
vulnerabilities or opportunities. If an area has a high concentration of economic activity in an industry that has declined
nationally, then that would be a potential vulnerability for a community.
Comparative change. Shif-share analysis is a frequently used measure that tracks comparative change. The analysis
combines three diferent calculations to arrive at an “actual growth” figure when comparing the employment growth for a local
area with a larger region, state, or national total.26 These components are the national growth, industry mix, and competitive
share. For a simple comparison of geographic areas, the competitive share (also referenced as the diferential shif, regional
shif, or competitive component) provides a good indicator of the relative growth and competitive advantage of a locality in a
particular industry.
Establishment size. Information about establishment size can identify the extent to which a community depends on a small
group of large establishments, or if it has a large base of small- to medium-sized businesses. The strategies for addressing future
opportunities or liabilities can difer depending on the distribution of businesses by size.
Growth trends. In addition to the static snapshot of an economic base, trend data that focuses on how indicators change over
time can also be included in an economic base analysis. The two main expressions of growth are the absolute change and the
percentage change. Absolute change refers to the numerical change between two points in time, while the percentage change
refers to the rate of change over time.
Wage and salary income. The data sources for employment data will also typically track wage and salary income. This
information is useful for identifying the wealth that the jobs in an area create for workers, and it allows for comparison by
industry and by geographic area. The prosperity index measures the extent to which wage growth compares with job growth
by dividing the wage growth percentage by the job growth percentage. This provides an indicator for how gains in the economy
directly benefit workers.
Research and development (R&D) investment and patents. Information about patents and R&D investments can provide
an indicator of where the focus of economic activity could potentially go in the future. For patent data, the U.S. Patent and
Trademark Ofice (USPTO) issues annual reports on patent activity at the state and national levels, with less frequently released
reports by NAICS code and by county and Metropolitan Statistical Area (MSA) location.27
In addition, the Bureau of Economic Analysis (BEA) tracks which activities generate the most R&D investments and updates this
data annually.28 While the BEA data is limited to national data, the information provides localities with a useful indicator of where
high-value activity occurs.
Sources of Employment Data by Industry
The range and quality of employment data has greatly expanded over the past decade. While data at the county, metropolitan,
regional, and/or state levels remains the most consistent and complete employment data available, more information at the
subcounty level (city, CDP, and/or ZIP Code) has become available in recent years. Reliable sources of employment data include
the following.
• Quarter Census of Employment and Wages (QCEW) data is accessible through BLS and California Employment
Development Department (EDD) and includes job, wage, and establishment data down to six-digit NAICS code level. It
also includes quarterly and annual data down to the county level, but will suppress data reporting where it might reveal
proprietary information about individual businesses.29, 30
26
Clouse, Candy; “Shif Share Analysis;” August 2021. https://support.implan.com/hc/en-us/articles/4402334035611-Shift-Share-Analysis
This article provides explanations and examples of how to perform the shif-share calculations using all three components.
27
https://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports.htm
28
https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri=1&nipa_table_list=331&categories=survey
29
https://www.bls.gov/cew/
30
https://www.labormarketinfo.edd.ca.gov/data/Quarterly_Census_of_Employment_and_Wages.htm
Understanding Your Economic Base Through Cluster Analysis, Business Size, and Supply Chain
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