Missouri Industry Clusters:
Information Technology

 

Technical Paper
ICA-0601-1
by
David J. Peters



Full Report
ica-0601-1.pdf

KEY FINDINGS

Given that information technology (IT) is a targeted industry in Missouri, there is a need to delineate the entire IT value-chain within the state. One method to accomplish this is to determine and analyze where IT input and output clusters are located in Missouri. This information is significant in that decision-makers need to know where potential IT suppliers and consumers are located within the state. This allows businesses to better select facility locations, in that it identifies areas where IT suppliers and consumers are located. Also, it allows government officials to develop a strategy for recruiting IT firms, highlighting the state's existing supplier and consumer base. In general, the most optimal areas for the development of the IT industry are characterized by a sizable industry cluster employment base and high specialization.

In terms of backward-linkages, it appears that the IT industry purchases most of its inputs from the computer and data processing sector - indicating that the IT sector is highly dependent on other IT firms to provide needed inputs. In 2000, First-Order Input cluster jobs were located in metropolitan St. Louis, Kansas City, Columbia-Jefferson City, and springfield. Additionally, jobs are also located in several rural areas of the state, including Barry County, Polk County and Wayne County. According to specialization ratios, 5 Missouri counties were highly specialized in First-Order Input cluster employment. These areas were located in suburban metropolitan areas and in several rural areas of the state. The most specialized counties in the state were Barry, Clay, St. Louis, Polk and Wayne.

The IT industry also purchases moderately from the wholesale trade and electronic components sectors to obtain various goods used in production; the communications sector to obtain telecommunications and internet services; and the real estate sector for facilities. In 2000, Second-Order Input cluster jobs were located in metropolitan St. Louis, Kansas City and springfield. Additionally, jobs are also located in several rural areas of the state, including Cape Girardeau County, Cole County and Taney County. According to specialization ratios, 2 Missouri counties were highly specialized in Second-Order Input cluster employment. These areas were located in two rural areas of the state. The most specialized counties in the state were Dent and Putnam.

Lastly, the IT industry purchases sparingly from a host of business operation services in support of personnel, fiscal, legal and shipping operations. In 2000, Third-Order Input cluster jobs were located in metropolitan St. Louis, Kansas City, springfield and Columbia. Additionally, jobs are also located in several rural areas of the state, including Cole County, Cape Girardeau County and St. Francois County. According to specialization ratios, 2 Missouri counties were highly specialized in Third-Order Input cluster employment. These areas were located in the south central area of the state. The most specialized counties in the state were Webster and Maries. 

In terms of forward-linkages, it appears that the IT industry sells most of its outputs to the wholesale trade sector, who in turn sell IT goods to retailers for consumers to purchase. In 2000, First-Order Output cluster jobs were located in metropolitan St. Louis, Kansas City and springfield. Additionally, jobs are also located in several rural areas of the state, including Cape Girardeau County, Cole County and Scott County. According to specialization ratios, 8 Missouri counties were highly specialized in First-Order Output cluster employment. These areas were located Kansas City and in several rural areas of the state. The most specialized counties in the state were Dent, Putnam, Clark, Chariton, Clay, Scott, Harrison and Dade.

Additionally, the IT industry also sells heavily to other IT firms, indicating that there is a high degree of interdependence among IT firms. In 2000, Second-Order Output cluster jobs were located in metropolitan St. Louis, Kansas City, Columbia-Jefferson City, and springfield. Additionally, jobs are also located in several rural areas of the state, including Barry County, Polk County and Wayne County. According to specialization ratios, 5 Missouri counties were highly specialized in Second-Order Output cluster employment. These areas were located in the suburban metropolitan areas and in several rural areas of the state. The most specialized counties in the state were Barry, Clay, St. Louis, Polk and Wayne.

The IT industry also sells moderately to banks, the medical profession, and the telecommunications sector. Generally, the IT industry provides mission-critical services and software to these sectors that is specific to their business functions. In 2000, Third-Order Output cluster jobs were located in metropolitan St. Louis, Kansas City, springfield and Columbia. Additionally, jobs are also located in several rural areas of the state, including Cape Girardeau County, Cole County and Butler County. According to specialization ratios, no Missouri counties were highly specialized in Third-Order Output cluster employment. However, Maries County and Jackson County had significant above average specialization.

Lastly, the IT industry sells sparingly to a host of professional service, transportation and manufacturing firms. The IT industry provides services and software to college and universities, hospitals, engineering and architectural firms, aircraft manufacturing and transportation firms, a variety of business and consulting services firms, and to the trucking and warehousing industry. Generally, these industries require a higher degree of IT infrastructure in order to operate.