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Image result for competitiveECON First believes that business success centers around the businesses knowing the economic and demographic characteristics of their primary market area. While business experience, insights and intuition are important, they are substantially advanced by hard data.

To assist in the structure of local economic development efforts, regional economists use a methodology that rates industries from strong to lagging to poor performer. ECON First adopts this methodology to give local businesses one perspective on the competitiveness of their industry.


The competitiveness assessments includes three components, all performed at the county level.

First, a location quotient is calculated for the subject industry. The location quotient simply compares the subject industry’s share of the local economy to the industry’s national share. The location quotient shows whether the subject industry serves solely the local market or has external sales.

Second, the recent growth rate for the subject industry in the local economy is calculated.

Finally, the subject industry’s competitive differential is estimated, being the difference between the growth rate in the industry in local and the national economies.


Maricopa County, Arizona, which includes the city of Phoenix, is used to demonstrate the competitiveness assessment methodology, using employment data from the U.S. Bureau of Labor Statisics.

All three components were calculated for three random industries. The results are below.

The first industry is baked goods stores (NAIC 445291). The location quotient is weak, showing that the industry services entirely a local market. Between 2008 and 2015 (both expansion years in the business cycle) employment dropped -58% (compared to a 4% increase for total private employment in the County). And the subject industry growth rate was below the industry growth rate across the nation. Baked good stores are classified as poor performers with limited prospects.

Computer systems design services (5415) had a location quotient that fell just short external sales, a 2008-15 astounding employment growth rate of 58% (compared to 32% across the nation), and a solid competitive factor. The industry is classified as a strong performer – emerging strength.

Finally, credit intermediation (522) was positive across all three components, ending up with a classification of strong performer- current strength.


ECON First specializes in providing the hard data that allows business owners to make more informed decisions regarding start-ups. expansion, marketing channels, and pricing strategies.

Applying the regional economics methodology for competitive assessment, ECON First can provide businesses with an analytical rating of local strength.

Dr. John E. Stapleford

ECON First