Industry Cluster Analysis and IMPLAN SoftwareA Conceptual Overview
April 18, 2023
Industry Cluster Analysis
What are Industry Clusters?
Three critical conceptual dimensions Linkage
• Interdependence between businesses/industries/sectors Stage of development
• Clusters may be existing, emerging, or potential Geography
Linkage The heart of cluster analysis May be formal or informal Sources
common value (e.g. production, market) chains similar labor skill requirements shared or similar technologies or knowledge and/or innovation exchange
Choice of study linkage determined, at least in part, from policy goals.
Stage of Development Offers different cluster types for study focus, depending on goals Existing stage
Existing clusters are those that have reached a critical mass in size and/or diversity of operation Existing clusters may be expanding or contracting at any given point in time
Emerging Emerging clusters are likely to achieve critical mass, given current trends
Potential Potential clusters are those with potential, but uncertain growth environment and possibly have only a few related industries
Geography Clusters must be identified by more than locality Regional concentration versus global dispersion Cross boundary linkages Study order:Linkage/economic logic Geographic
concentrations
Cluster OrganizationsHelp identify careers in related industriesHelp guide local schools and colleges in providing appropriate trainingHelp policy makers understand the connections between industry requirements and the training needed for successful welfare reform and implementation of the Workforce Investment Act
Required Resources and Tools Resources
Benchmark Input-Output Accounts of the U.S. Staffing Patterns Matrix Industry X Industry Transactions Matrix
Analytical Tools IMPLAN – IMpact Analysis for PLANing Programmable statistical software (e.g. SAS or SPSS) Excel
General Flow of WorkPolicymakers
Policy Goals
ClusterDefinition
Value-addedI-O
EmploymentSkills
Growth Rates
Basic Data Composition
National Data Analysis
State Data Analysis
Sub-state Data Analysis
ReportGeneration
Benchmark I-O Accounts of U.S.Transactions Accounts
NC & KY StudiesIMPLAN
Mathematical Methods
NC & KY Reports
IMPLAN Description
Regional modeling system Comprises two components
Software Databases
Impact Analysis - Facilitates evaluation of various economic scenarios Traces out linkages in regional economy
Components Software
Allows reporting on the local economic structure Creates a predictive model of the economy
Databases Includes data at national, state, and county levels Uses 528 industrial sectors, from 3 and 4-digit SIC codes Input-Output Employment Income (value – added) Business Taxes Business-to-business transactions
IMPLAN Uses Aid in Industry Cluster Analysis
What & Where I-O, Value-added -(employees compensation, proprietor income, other
property income and indirect business taxes), Employment, etc. Geographic
Impact Analysis Event – Natural, Disaster Firm – Boeing, Intel Industry – Health Care, Tourism, Technology Resource – Land Use, Resource Development Development – Rural, community, watershed Policy – Strategic planning, Immigration, Taxes, Education Scenario – to evaluate alternate economic paths
IMPLAN Uses (cont.) Commodity Analysis Economic Evolution In conjunction with Computable General Equilibrium modeling Forecasting
Computable General Equilibrium ModelDeveloped from macroeconomic modeling and classic economic theoryUsed to analyze policies or projects involving price responsesAssumes the existence of profit-maximizing producers and utility-maximizing consumersBased on Walras’ Law – for all goods with value > 0, Qs = Qd