Targeted Regional Economic Development. Tom Harris University of Nevada, Reno Department of Economics University Center for Economic Development

Transcription

1 Targeted Regional Economic Development Tom Harris University of Nevada, Reno Department of Economics University Center for Economic Development

2 WHY USE DATA FOR ECONOMIC TARGETING and CLUSTER ANALYSIS? Often there is a lack of evidenced-based and vetted economic tools to make targeted economic development plans Economic development plans should not be based on speculation

3 WHAT IS TARGETED REGIONAL ECONOMIC DEVELOPMENT? It is the Process of Using Detailed Socio-economic data collection and analysis. Obtaining Insights from the Data Allows Community Leaders to Influence Economic Development

4 WHAT IS TARGETED REGIONAL ECONOMIC DEVELOPMENT? Targeted Analysis Helps Focus Energies Not Only on What Industries to Recruit, But Also, On Existing Businesses and the Promotion of New Businesses and Small Business Development.

5 WHY INTEREST ON TARGETED REGIONAL ECONOMIC DEVELOPMENT? Michael Porter and Cluster Economic Development Instead of shoot anything that flies and claim anything that lands to more strategic behavior of identifying the specific type of industry that should be promoted at the local and regional level.

6 WHAT IS AN INDUSTRY CLUSTERS? An Industry cluster is a geographically bound collection of similar and/or related firms together create a competitive advantage for member firms and the local economy.

7 WHY TARGETED INDUSTRY CLUSTER? The Presence of an Industry Cluster in a study area is evidence that the location is attractive to these types of manufacturers. 2. The multiplier effect associated with attracting new firms to a cluster generally is greater than those resulting from noncluster firms. 3. Members of industry clusters have stronger employment growth over time than those firms that are not in clusters. 4. Industry clusters have greater potential for new firm spin-offs than grouping of unrelated firms.

8 Researchers and Development Practitioners have begun to pay attention to occupations as well as industries. WHY NOT OCCUPATIONAL TARGETING? Regional competitiveness has become increasingly dependent upon local knowledge bases and worker quality. Looking at tasks that workers perform in different industries can have workers cross from one industry to another. As Feser states: Economic Development Practitioners Need To Pay Attention to the Function That Local Workers Perform as to the Output They Produce.

9 OVRVIEW OF THREE PROCEDURES FOR TARGETEDV REGIONAL ECONOMIC ANALYSIS Location Quotient Shift-Share Analysis Area Sector Analysis Process Today only focus on Location Quotient Procedures

10 WHY LOCATION QUOTIENT? Methods of identifying potential industries to focus targeting efforts vary widely. An approach suggested by Harvard business economist Michael Porter is growing in popularity. The approach is built on the notion of location quotients and it includes current values of the location quotient, changes in the location quotient over time, changes in employment over time, and the relative size of the industry coupled with other industry characteristics.

11 WHAT IS A LOCATION QUOTIENT? Employment in Sector i in County r Total Employment in County r LQ i,r = Employment in Sector i in the Nation Total Employment in Nation

12 A Location Quotient Great than 1.0 Means that Study Area is Specializing in that Industry or is an Exporter. HOW TO INTREPRET A LOCATION QUOTIENT A Location Quotient Equal to 1.0 Means that Sector Self-Sufficient No Imports or Exports to Meet Local Demand. A Location Quotient Less Than 1.0 Means That Study Area is Not Specializing in this Industry or is an Importer.

13 EXAMPLE OF LOCATION QUOTIENT If Manufacturing in BOZO County was 20% of total Bozo County employment. If Manufacturing in the NATION was 10% of total NATIONAL employment. Then the Location Quotient for Manufacturing would be 2.0 so Manufacturing in Bozo County is specialized.

14 CLUSTER ANALYSIS FROM STRONGER ECONOMIES TOGETHER

15 HOW TO INTERPRET CLUSTER DATA

16 CLUSTER RESULTS FOR WASHOE COUNTY. Employment Change 2010 to 2018 Percentage Change in Employment from 2010 to 2018 Economic Sectors 2018 Location Quotient TYPE Agriculture, Forestry, Fishing and Hunting % EMERGING Mining, Quarrying, and Oil and Gas Extraction % TRANSFORMING Utilities % TRANSFORMING Construction , % STAR Manufacturing , % EMERGING Wholesale Trade % STAR Retail Trade , % STAR Transportation and Warehousing , % STAR Information % TRANSFORMING Finance and Insurance % EMERGING Real Estate and Rental and Leasing , % STAR Professional, Scientific, and Technical Services , % EMERGING Management of Companies and Enterprises % TRANSFORMING Administrative and Support and Waste Management and Remediation Services , % STAR Educational Services % TRANSFORMING Health Care and Social Assistance , % EMERGING Arts, Entertainment, and Recreation % STAR Accommodation and Food Services , % STAR Other Services (except Public Administration) , % EMERGING Government , % EMERGING Unclassified Industry % EMERGING TOTAL 39, %

17 Define the NAICS Complete an Export Enhancement and Import Substitution Analysis WHAT S NEXT? Use Input-Output to Derive Forward and Backward linkages and Compare to Nation Use of TeDAT ASAP Analysis

18 DEFINE NAICS EXAMPLE

19 DEFINE NAICS SECTOR

20 DEFINE NAICS EXAMPLE

21 EXPORT ENHANCEMENT and IMPORT SUBSTITUTION Export Enhancement Import Substitution Gaps Disconnects

22 INPUT-OUTPUT MODELS Compare Input and Output linkages for sector of study to study area and Nation.

23 TeDAT Example

24 TeDAT EXAMPLE: Top 15 Occupations

25 Economic Development Desires of Public AREA SECTOR ANALYSIS PROCESS Needs of Businesses Asset Map Derive Short-Run and Long- Run Goals

26 LAST THOUGHT: EXPORT BASE BY INDUSTRY ONLY

27 EXPORT BASE BY INDUSTRY and LOCAL HOUSEHOLDS

28 Thank You and Questions Tom Harris University of Nevada, Reno Department of Economics Mail Stop 204 Reno, NV (P) ( )