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Strategy 17: Target Industry Analysis

Strategy Description:

Target industry analysis identifies industries (or types of industries) that have the strongest potential to expand or relocate in a specific economic region or offer the best prospects for "good jobs" meaning jobs that offer a higher quality of life (security, higher wages, training, flexibility, etc). "Good jobs" will be defined by entry level and individual need of the worker as well as the need and impact on the community. The strategy matches regional economic characteristics, resources and advantages with general location and work force requirements for major industry segments from high tech to hospitality and service.

Key Components:

The purpose of this analysis is to identify the best prospects for employment growth in the region within a strategic planning framework.

The analysis might use location quotients to compare the regional economy to the United States as well as the economy of the comparable counties to the United States. The Standard Industrial Classification (SIC) system or the North American Industrial Classification (NAICS) system could be used at a fairly high level to review employment and gross product data. With respect to employment, location quotients above 1.25 indicate industry sectors with a large presence in the regional economy relative to the national economy. These sectors are large producers of a particular good or service and can be anticipated to export some level of that production.

The analysis might also include a review of regions that provide or are striving to provide high quality of life jobs and low environmental impact to learn from their successes and failures. These lessons could be incorporated in the strategy.

 Much of the discussion of targeting and employment growth at the national level and in most states and regions centers on development in fields regarded as "high tech." There is no general consensus on what technology means and economists struggle to identify the industries that can be considered high tech. The Congressional Office of Technology Assessment defines high tech companies as those that"engage in the design, development, and introduction of new products and innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge."

Guidelines for individual industries and businesses build on this definition. In order to classify individual industries as high tech, one must measure total employment of scientists, technicians, and engineers along with total expenditures on research and development for each industry (the most commonly used method of classification). The study by the Bureau of Labor Statistics notes that "industries are considered high tech if employment in both research and development and in all technology-oriented occupations accounted for a proportion of employment that was at least twice the average for all industries in the Occupational Employment Statistics survey."

In summary, high technology is diverse and high-tech employment is growing faster than employment as a whole. Fortunately for the county, industries do not have to produce a traditionally high tech product or service (i.e., software, computers) in order to be high tech and high tech industries and their higher wages are not out of reach for the county. The manufacturing base can be uplifted by high tech components.

In addition, the Mid-Bald Eagle Watershed offers a growing tourism economy which provides various options for the Hospitality and Service industry. While these jobs are often viewed as temporary and with lower salaries, it is important to recognize the role they play in the local economy. Similar standards for these industries as for those of the high tech industries will assure that all jobs are of high quality to the worker and bring valued economic impact to the region.

 The 99 I-Tech Corridor Alliance is currently evolving to explore these options and to market to such industries along a multi-county stretch of the interstate. It may be appropriate to target specific advantages of different parts of the region with respect to certain industries, such as locations near the University Park Airport and/or close to Interstate 99 interchanges, versus village or rural locations. Reuse of larger, historic or vacant buildings within existing communities may provide unique options for location decisions. For the municipalities, the target industry sectors should be essentially the same as, or very closely related to those of the region. However local targets may be more specific and clearly aligned with local strengths such as infrastructure capabilities, highway accessibility, and land availability. It will be essential to have clear communication between the regional efforts and the municipalities to obtain up-front data and to provide best site locations. The Chamber of Business and Industry of Centre County (CBICC), Bellefonte Intervalley Area Chamber of Commerce (BIACC) and the Centre County Convention and Visitors Bureau (CCCVB) are currently leading efforts to expand the existing clusters of their respected industries. A CCCVB Study (due Feb 2002) will provide most, if not all, of the analysis for the Hospitality and Service sector. (see Strategy 22: Toursim Promotion). It is unclear at this time how the I Tech Corridor Alliance will analyze this sector or how they will distribute the information. There is very high–level expertise available at the Department of Agricultural Economics at Penn State University to assist the agriculture sector and other related sectors.

The ability to overlay all the data, to establish links between it, and to create ways to utilize the analysis tools is not clear at this time. If there is a need to reach out to create new markets, who will lead the process – The CBICC vision is not to recruit new industry, rather it is interested in building businesses that laterally or vertically integrate with existing businesses. It may be appropriate to identify outside consulting expertise to assist in this process and to create new partnerships to serve the identified needs. The analysis should be connected with other economic development initiatives and programs particularly in relation to marketing, training the workforce, and evaluating infrastructure requirements.

 Regional Application:

This strategy will be important to the entire region. The regional targeting effort must be opportunistic and practical, putting greater resources into targets that offer the best prospects, and leveraging its own limited resources with those of the Commonwealth and other marketing efforts.

Implementation:

See implementation component above.

Indicators:

Funding: