David J. Peters
A common practice in economic development is to craft public policies to support an economy’s “target industries”. It is assumed by policy makers that public investments in these target industries will create economic growth and wealth for the region. Although this development approach is supported by a segment of economic theory, oftentimes the methods used to identify target industries are simplistic and politically driven. When targeted industries are identified using political rather than empirical justifications, development agencies run the risk of investing scare resources into groups of industries that will produce little to no economic benefits.
Target Missouri 3 - TM3 - was developed to assist
economic development officials in targeting industries based on sound
economic theory and methods. TM3 provides a well conceptualized
and empirically based definition of which industries are drivers of a
region’s economy, so that economic development policies and resources
can be directed to the most viable parts of the economy.
Missouri’s 82 driver industries have a sizable impact on the state's economy, accounting for 42.8% of total foreign exports, 17.7% of total output, 10.0% of total compensation and 8.3% of total employment. In addition, these driver industries paid an average annual wage per job of $34,653, which was moderately more that the state average wage per job.
In manufacturing, Missouri had a competitive advantage
in greeting card publishing, automatic merchandising machines, lumber
and wood products (i.e. sawmill products, hardwood floors, wood
containers/pallets, and furniture), ammunition, paper products (i.e.
paper bags, paper sanitary products, envelopes, and paper), and lastly
in motor vehicles, which was substantially represented (i.e. motor
vehicles, boats, motorcycles, aircraft, internal combustion engines,
motors and generators, fans, and heating and cooling equipment).
In the extractive industries, Missouri had a competitive advantage in lead mining, clay cricks, lime and stone quarrying, paving and asphalt products, and cement.
In agriculture and food products, Missouri had a
competitive advantage in agricultural production products (i.e.
agricultural chemicals, grass seeds, prepared feeds, feed grains, hay,
cattle, hogs, and oil crops) and in manufactured food products (i.e. pet
foods, malt beverages, pasta products, poultry processing, pickles and
sauces, roasted coffee, cheese and condensed milk, and cereals).