Baseline Cluster Analysis

About Cluster Analyses

Cluster analyses of industry and occupation networks are a relatively new approach in regional development that focuses on the knowledge, skills and abilities of the individuals who work in certain jobs. A cluster is a network of industries, people, and organizations in close geographic proximity. This cluster analysis provides fast insights into the talent base that drives a local or regional economy. With this tool, economic development professionals can begin to structure effective collaborations with businesses managers, educators, and workforce development professionals. This baseline cluster analysis must be paired with a discussion of the unique characteristic of firms that make up these clusters in our region in order to understand the nuanced relationships that create Texoma’s economic base.

Two clusters, referred to by the same label, in different regions will vary in their actual industry composition according to their “base” industry, industry mix and degree of industrial, anchoring firms, ancillary and supporting industries, integral organizations, informal arrangements and critical growth poles. This type of analysis is useful in a number of different ways. By understanding the dynamics of growth within a cluster, an economic development professional can communicate more effectively with educators and workforce development professionals to build a talent pipeline needed to support businesses in Texoma.

The baseline occupational and industry cluster analyses provided in this section measure characteristics of clusters over time. The information provided is simply a point in time analysis of existing clusters in Texoma. Further study should be done to identify clusters that are at risk, emerging, or have the potential for future growth.

Texoma Occupation Clusters

Working with occupational data can quickly become overwhelming, so to simplify analysis and aid in understanding, the tool focuses on fifteen knowledge based occupation clusters. Occupation clusters help to analyze the regional knowledge based workforce in greater detail, determine how well occupation cluster strengths align with the region’s industry cluster strengths, understand the local workforce and educational situation within the broader regional economic development context, bridge the gap between workforce and economic development when constructing a regional economic development strategy, diagnose how well positioned the region is to participate effectively in a knowledge based innovation economy.

The following chart illustrates the number of jobs in each cluster, the cluster’s share of total regional employment, and the location quotient of the cluster (a measurement of how concentrated that cluster is in Texoma compared to the nation). The table below looks at Texoma and identifies those occupations with the strongest percentage change and the largest increase in the number of jobs from 2001 to 2007. Agents and business managers of artists, performers, and athletes had the largest percentage change, but that occupational segment is relatively small. Photographers represent the largest growth category in absolute terms, with 99 new jobs added in that occupational category.

Texoma Industry Clusters

The industry cluster analysis helps the practitioner to see networks of businesses that are creating wealth in their local or regional economy. The tool focuses on seventeen clusters across the United States in order to provide a framework that is easy to understand. It also allows users to combine individual counties to define custom regions. Close geographic proximity and engagement in similar or related economic activities are the key factors leading to development of clusters. These characteristics enhance the likelihood of exchanges among cluster firms, facilitating mutual support, and economic growth.

When members of a cluster are located in close proximity, they can capture synergies that, innovative capacity and new business formation.
The linkages between spatial proximity and innovation potential are particularly important from a regional development perspective. In particular, supportive policies and a nurturing business environment may further strengthen the innovative milieu and thus enhance regional advantages. Industry clusters help to describe how industries in a region compare to each other, identify growth trends through regional location quotient analysis, reveal emerging industries in a region, analyze the mix of clusters in a diverse region that might include both rural and urban areas, rethink business expansion strategies, reveal groups of industries that have similar workforce needs, prioritize groups of firms that have growth potential, and create regional identities and improve marketing effectiveness.

On average, U.S. counties specialize in slightly more than two industry clusters (LQ > 1.2, meaning that the cluster’s share of employment in the county is at least 20 percent higher than the cluster’s share of employment nationally). With data provided by this tool, users can create a matrix to show industry employment location quotients for each county in the region and for the region as a whole. This matrix enables practitioners to see the overall competitive strengths of the region’s economy. However, cluster analysis must be used judiciously because it relies upon historical data, and the past is not a perfect predictor for the future. For example, a region currently specialized in a particular cluster may not have a bright future if the national and global outlook for that cluster is one of decline.

Texoma Baseline Industry Cluster Analysis (2008)