Six analysis tools are used to determine which industries should be chosen for targeting in the Lower East central - Cape 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 tables that follow present those industries with scores of 50 or higher on the target scale for the Lower East central - Cape Region. Not surprisingly, the top industry in the region is Motor Vehicles and Equipment Mfg. (SIC 371), with a score of 100 points. This industry has consistently scored at the top for each region previously surveyed. However, SIC 801-804, Offices of Health Practitioners, also scored a very surprising 100 points. Another eleven industries (of the 82 total) scored 80 points or higher, while 46 of these scored the minimum 50 points.
It is important to note the strong showing of firms in Life Sciences, particularly SICs 281-286, Industrial Chemical Mfg. (90 points). In addition, Information Technology industries are represented by SIC 48, Communications (90 points).
Another important finding from this study is that an additional five industries in the categories of Transportation Equipment, Life Sciences, or Information Technology have high Economic Impact and good Skills-Mismatch Index scores, but low current employment levels. This implies that the LECC Region is ripe with potential for development in these industries. The five additional industries are SICs 372 & 376--Aerospace Mfg., 374--Railroad Equipment Mfg. 384--Medical Equipment Mfg., 283--Drugs Mfg., and 287--Agriculture Chemicals Mfg.
The map on the final page shows the current locations of target industries in the Lower East central - Cape Region. More importantly, it implies that those locations already have needed infrastructure in place to attract additional target industries.
TM2 has provided a list of 82 industries that have the best potential results for economic development in the Lower East central - Cape Region. The original Target Missouri provided a list of only 22 target industries for the entire Lower East central - Cape Region. Of these, only 14 appear on both lists, so in this case, the two studies have obtained somewhat different results. The expanded list generated by TM2 provides a list of industries that better fits the specifics of the Lower East central - Cape Region, as well as providing rankings that shed some light on the relative importance of certain industries.