California Economic Information Project

1
Regional Clusters of Opportunity Presentation
John Melville Collaborative Economics
2
Clusters of Opportunity
Export Oriented
PopulationDriven
CareerPotential
3
Three Steps

• Identify Potential Clusters of Opportunity
• Display the Clusters of Opportunity
• Validate the Clusters of Opportunity

4
Data Collection

• Collect employment and wage data from multiple
  years to examine various economic periods, such
  as 1990, 1994, 2000, 2002 (or most recent)
• Collect employment data for your region and for
  California.
• Use a database program (i.e. access) or
  spreadsheet program (i.e. excel) to manipulate
  and analyze data.
• Keep original data file separate. Create a copy
  of this file for analysis.

5
Cluster Dimensions

• Size
• Concentration
• Growth
• Wages

6
Data Analysis
Compute the following data for each NAICS code.
This will be the criteria used for selecting
clusters of opportunity.
Note Concentration vs. U.S. is generally more
representative than concentration vs. CA. If
possible, use U.S.
7
Data Analysis (Sample)
8
Group Clusters of Opportunity

• Sort data by size, concentration, and growth
• Highlight industries with above-average
  concentration and growth
• Consult NAICS Manual and other cluster studies to
  understand how industries are related.
• Group related industries into clusters. Clusters
  include
• Export-oriented sectors Sectors selling products
  or services outside the region
• Support sectors sectors selling goods services
  primarily to export-oriented sectors
• This step requires judgment, get feedback from
  those who are familiar with regions economic base

9
Cluster Groupings (Sample)
10
Three Steps

• Assemble Potential Clusters of Opportunity
• Display the Clusters of Opportunity
• Validate the Clusters of Opportunity

11
Economic Portfolio
Size
x axis Employment Concentration
employment
y axis Average annual employment growth rate
12
Creating a Bubble Chart in Excel

• Create a data table for chart with the following
  information
• Name of cluster
• Average annual growth rate (over selected time
  period)
• Concentration relative to California (in most
  recent year)
• Employment (in most recent year)

Sample data table
13
Creating a Bubble Chart in Excel (cont)
Step 1 of 4

• Select Insert Chart in Main Menu
• Step 1 of 4 Choose Bubble chart under Standard
  types
• Step 2 of 4 Select the Series tab. Manually
  Add each cluster data point, choosing the
  appropriate cell for
• cluster name
• X-value (AAGR)
• Y-value (concentration)
• Sizes (employment).
• Repeat for each cluster.
• Step 3 of 4 Enter name for Title, and Labels for
  X and Y axes
• Step 4 of 4 Choose location name of Chart
• Format as needed

Step 2 of 4
14
1990-2002
15
1990-1994
16
1994-2000
17
2000-2002
18
A Matrix Assesses the Clusters of Opportunity

• Rank the Clusters by four criteria
• Size
• Concentration
• Growth
• Wages
• Create a matrix
• List Clusters along the horizontal axis by size,
  largest to smallest
• For size, concentration, growth, use numbers to
  show relative rankings vs. other clusters
• For wages, use High, Medium, Low categories
• Use color-coding to display data
• Look for natural breaks in data, with general
  rule of thumb
• Green Top 1/3
• Yellow Middle 1/3
• Red Bottom 1/3

19
Assessing Clusters of Opportunity2000-2002
Real Estate
Arts, Ent Rec
Other Svcs
Con-struction
Health Care Assist
Retail Trade
All Govt
Prof Tech Svcs
Accom Food
Admin Waste
10
9
8
7
6
5
4
3
2
1
Size (Ranked Highest to Lowest)
6
10
7
9
4
8
1
2
Conc. (Ranked Highest to Lowest)
3
5
8
4
7
5
2
3
6
9
10
1
Growth (Ranked Highest to Lowest)
20
A Cluster Map Displays the Key Components of a
Single Cluster

• Export-Oriented Sectors sectors selling products
  or services outside the region
• Support Sectors sectors selling primarily to the
  export-oriented sectors
• Occupations
• Higher Level occupations with high wages that
  usually require significant work experience
  and/or higher education
• Mid Level occupations with advancement potential
  that require some training
• Entry Level occupations at the beginning of the
  career ladder
• Infrastructure specialized community
  infrastructure that supports the cluster,
  including institutions, assets, and capabilities

21
Identifying Occupations for Cluster Maps

• Identify key occupations within each cluster
  grouping
• Use BLS National 4-digit NAICS
  Industry-Specific estimates to find top SOC
  codes for each industry
• http//www.bls.gov/oes/oes_dl.htm
• Examine regional data for top SOC codes
• Use BLS Metropolitan Area Cross-Industry
  estimates to find regional employment and
  average wage estimates for the SOC codes
  identified above
• http//www.bls.gov/oes/oes_dl.htm
• Determine Entry, Medium, and Higher Level
  Occupations for each Cluster
• Use average annual wage as proxy for occupational
  level
• Examine regional employment and average annual
  growth within occupations to understand regional
  workforce dynamics

Industry-specific data only available at
national level
22
Cluster Map (Sample)
Health and Biomedical
Industries
Hospitals and
Medical Equip
Pharma and
Doctors' Offices
Acute Care
Supplies Mfg
Medicine Mfg
Support Sectors
Home and
Medical and
Emergency and
Scientific Research
Residential Care
Diagnostic Labs
Relief Services
and Development
Services
Occupations
Biochemists and
Family and General
Natural Sciences
Biomedical
Medical
Higher Level
Biophysists
Practitioners
Managers
Scientists
Engineers
Mid Level
Psychiatric
Medical and
Dental Lab
Biological
EMT's and
Technicians
Clinical Lab
Technicians
Technicians
Paramedics
Technicians
Pharmacy Aides
Nursing Aides,
Personal and
Psychiatric
Physical
Entry Level
Orderlies and
Home Care
Aides
Therapist Aides
Attendents
Aides
Infrastructure
Education and
Research
Biomedical
Specialized Clinics
Research
Training
Universities
23
Three Steps

• Assemble Potential Clusters of Opportunity
• Display the Clusters of Opportunity
• Validate the Clusters of Opportunity

24
Validate the Cluster Opportunities

• A cluster analysis is only the beginning of a
  cluster engagement process
• Data provides a high-level picture, but it does
  not tell the whole story. Industry experts are
  needed to interpret the data, provide regional
  context, and form actionable strategies.
• Conduct interviews with industry leaders in the
  cluster to get feedback and gain deeper
  understanding of cluster.
• Convene leaders in small groups to identify
  potential collaborative actions and surface
  champions

25
California Regional Economies Project
Summaries of Each Regional Forum

• Regional Economy Reports
• Economic Overview
• Industry Trends
• Economic Base Analysis
• Total of Nine Regional Reports

• Regional Forums
• Regional Economy Report
• Regional Clusters of Opportunity Overview
• Users Discuss Findings, Methodologies
• Users Identify Key Clusters for Further Analysis

Follow-up Profile of One Cluster per Region

• Regional Clusters of Opportunity
• Overview of Leading Clusters (size,
  components and trends)
• Total of Nine Regional Cluster Overviews

Input to State Workforce Investment Board and CA
Economic Strategy Panel Plans

• Regional Forum Preparation
• Identify Regional Partners and Hosts for Nine
  Forums
• Users Help Identify Key Issues and Clusters

Three Monographs on Key Topics
June 2003
October
June2004
April