Six analysis tools are used to determine which industries should be chosen for targeting in the central region. The first two, Specialization Ratios (SR) and the Regional Shift (RS) component of Shift-Share Analysis (SSA), help to determine which industries might have a competitive advantage in a region. The third and most important type, the Economic Impact (EI) analysis, helps to identify which industries will benefit the region most should they expand. The Skills-Mismatch Index (SMI) determines whether the skills of the available workforce in a region match the needed skills for a particular industry. The Industrial Mix (IM) component of SSA helps to identify emerging industries. Finally, the Current Employment (CE) level of a regional industry helps to determine whether needed infrastructure is in place to attract particular industries and is an important factor when considering SRs. Industries are awarded points on a scale of 0 to 100 based on whether they meet necessary criteria in these six categories. Those industries that score the highest are those recommended for targeting.
The diagram below presents a graphic illustration of this methodology. The orange lines connect those factors that have a specific relationship as described above.
Industries chosen for targeting are those industries that have high scores in the six categories discussed above. For each category, a condition has been established that determines whether an industry has performed well in a category. For each category in which an industry performs well, that industry is awarded a set amount of points. If an industry does not meet the condition for that category, no points are awarded. The categories and their point values are as follows:
|Condition 1: High Economic Impact||40|
|Condition 2: High Specialization Ratio||20|
|Condition 3: Strong Regional Shift||20|
|Condition 4: Low Skills-Mismatch||10|
|Condition 5: Positive Industrial Mix & Regional Shift||5|
|Condition 6: High Current Employment||5|
An industry that scores well in each of the categories receives a score of 100 points, while those industries that perform poorly receive 0 points. Industries that score 50 or more points are those recommended for targeting.
The table on the following page presents those industries with scores of 50 or higher on the target scale. (The full report presents the scores for all industries in the central Region.) The Motor Vehicles and Equipment Manufacturing Industry, SIC 371, received a perfect score of 100 points in the central Region. The major portion of the target industries in this region is in the Durable Manufacturing sector. Caution should be exercised, however, toward the end of this list. Certain industries with extremely low economic impacts but high specialization ratios do score over 50 points on the targeting scale. These include certain service- and retail-sector industries.
The map on the final page shows the current locations of target industries in central Missouri. More importantly, it implies that those locations already have needed infrastructure to attract target industries in place. Large clusters are found near Columbia, Jefferson City, and Moberly, particularly in SIC 371, Motor Vehicles and Parts. No counties in the central Region are without any of the Recommended Target Industries.
TM2 has provided a list of 57 industries that have the best potential results for economic development in the central Region. The original Target Missouri provided a list of 28 target industries for the same region. Of these, 17 appear on both lists, so in this case the two studies have obtained similar results. The expanded list generated by TM2 provides a list of industries that better fits the specifics of the central Region, as well as providing a ranking scale that sheds some light on the relative importance of certain industries.