Industry Cluster Analysis Project Overview Wande Reweta Colorado Department of Labor and Employment.

Industry Cluster Analysis Industry Cluster Analysis Project OverviewProject Overview

Wande Reweta

Colorado Department of Labor and Employment

Industry Cluster Analysis

• What are Industry Clusters?• Groupings of firms, involving various industries, that

have mutual affinity or reliance

• 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

Required Resources and ToolsFor This Study

• Resources• Benchmark Input-Output Accounts of the U.S.

• Staffing Patterns Matrix

• Industry X Industry Transactions Matrix

• Reference Literature

• Analytical Tools• IMPLAN

• Programmable statistical software (SPSS)

• Excel spreadsheets

Work Components

Report

Data

Software

Analyst Knowledge & Skills

References

General Flow of Work

Policymakers

Policy Goals

ClusterDefinition

Value-addedI-O

EmploymentSkills

Growth Rates

Basic Data Composition

State Data Analysis

National/State Cluster Synthesis

Sub-state Data Analysis

CompositeReport

GenerationBenchmark I-O Accounts of U.S.

Transactions Accounts IMPLAN

Mathematical Methods

Previous Studies, Texts,

& Consultation

SWOT Analysis

SeparateReport

The Report

• Basic information rather than more encompassing analysis

• Cluster Identification

• Industry Information• Employment

• Wages

• Occupation employment

• Regional Comparison

Goals versus Reality

• Identification of Colorado industry clusters

• Analysis of clusters• Employment• Wages• Value Added or Tax Revenue• Export Value

• Comparison with National clusters

• Cluster state evaluation• Mature• Emerging• Potential

• Regional comparison• Denver• Rural region (NWRR)

• Identification of Colorado industry clusters

• Analysis of clusters• Employment

• Wages

• Occupation Employment

• Regional comparison (reduced)

The Clusters

• Aerospace• Agricultural and Resource

Production• Construction• Consumer Products• Dairy Products• Electronic Components and

Devices• Fabricated Materials• Ferrous Metal and Mineral

Mining• Food Processing and Packaging• Gas and Oil Refining and

Related Products

• Gas and Oil Well Maintenance and Repair

• General Manufacturing• Leather and Animal Products• Logging and Wood Products• Meat Production• Motor Vehicles and Parts

Manufacturing and Repair• Non-ferrous Metal Mining• Non-metallic Mineral Products• Pharmaceuticals• Plastics and Allied Chemicals• Public Utilities

Selected Highlights of State Data

• The industries studied were in manufacturing and a few other basic industries

• Almost 28% of total cluster employment was in the Construction cluster, the largest of the clusters.

• Over 76% of total cluster employment was in the top 6 clusters and 92% by the top 9.

• The highest annual wages were provided by Gas & Oil Refining and Related Products and also Non-Ferrous Metal Mining clusters (both over $90,000).

• The lowest annual wages were in the Meat Packing (around $25,000) and Fabricated Materials (over $30,000) clusters.

• A total of 324 occupations are represented in the study.

• Three occupations occurred in 20 different clusters.

• Fifty-two occupations occur in one cluster.

Cluster Employment

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

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$50,000

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$70,000

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$100,000

Wag

e

Employment

2001 Average Wages

Colorado Cluster Wages Ranges

Wage Ranges for the Top 10 Clusters by Employment$

10

0,6

30

$2

13

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8

$1

06

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9

$7

3,5

22

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$6

0,5

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1,6

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4,6

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4,8

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$1

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$1

5,7

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$1

5,6

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$2

8,5

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1

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,24

5

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6,6

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$5

4,6

31

$5

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$4

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$3

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$3

9,2

92

$3

5,5

45

$2

9,0

58

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$50,000

$100,000

$150,000

$200,000

$250,000

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Maximum Wage Minimum Wage Average Wage

Occupations Occurring in Ten or More Clusters

20 20 20

19 19 19

18 18 18

17 17

16 16 16

15 15

14 14

13 13 13 13 13 13

12 12

11 11 11 11 11

10 10 10 10 10 10 10

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Cluster Repeats

Occupation Wage Comparison by Region (Occupations Occurring in at least 15 Clusters)

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Gen

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and

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Entry Hourly Wage CO Entry Hourly Wage DM Entry Hourly Wage NWRR

Experienced Hourly Wage CO Experienced Hourly Wage DM Experienced Hourly Wage NWRR

Projected Occupation Growth2000-2010

24,7

70

20,2

90

19,9

40

18,7

30

18,2

30

15,4

70

14,8

50

14,1

40

13,5

00

12,8

30

12,8

20

12,0

00

11,3

20

10,6

70

9,59

0

9,36

0

8,66

0

8,43

0

8,24

0

8,00

0

2.9%

13.7%

5.7%

3.2%

12.4%

3.0% 3.1%

4.5%

6.1%

7.1%7.9%

12.5%

3.1%

4.9% 4.6%

6.4%

2.5%3.5%

2.2%2.8%

0

5,000

10,000

15,000

20,000

25,000

30,000

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ail S

ales

pers

ons

Com

pute

r S

uppo

rt S

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and

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ood

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and

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clud

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n La

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pute

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ms

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lyst

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pute

r S

oftw

are

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inee

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yste

ms

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e

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eral

and

Ope

ratio

ns M

anag

ers

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es a

nd R

elat

ed W

orke

rs, A

ll O

ther

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t-Li

ne S

uper

viso

rs/M

anag

ers

of C

onst

ruct

ion

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des

and

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ract

ion

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kers

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urity

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rds

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tors

and

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aner

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ouse

keep

ing

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aner

s

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ck D

river

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eavy

and

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ctor

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iler

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kkee

ping

, Acc

ount

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and

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iting

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rks

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rers

and

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ight

, Sto

ck, a

nd M

ater

ial M

over

s, H

and

Ab

solu

te G

row

th

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Per

cen

tag

e G

row

ht

Review of Selected Features

• Provides insight into organization of the State economy, useful for policymaking and job seekers.

• Groups manufacturing industry interactions based on business transactions, thus demonstrating natural relationships that go beyond simple output classifications.

• Shows occupations that occur across many manufacturing industry clusters

• Provides a geographic comparison of both employment and wages for the State of Colorado, the Northwest & Rural Resort region, and the Denver Metro region.

• Projections of employment by cluster, using results of the 2000-2010 Long-term Industry projections. These projections assume cluster make-up will be unchanged.

Some Limitations

• Not a dynamic representation of the economy.• Study’s method is not the only way of analyzing

clusters.• Should be used with other materials for career analysis.• Does not differentiate between emerging, mature, and

declining clusters.• Study does not signify career path development

advantages.• Some analysis distortion possible due to the use of

different employment data years in different segment of the study.

Top Occurring Occupations

SOC Occupational Title Clusters Average Hourly WageState Denver Metro Northwest & Rural

Resort11-1011 General and Operations Managers 20 $39.50 $42.66 $35.56 13-2011 Accountants and Auditors 20 $26.41 $27.67 $26.24 43-3031 Bookkeeping, Accounting, and Auditing Clerks 20 $14.42 $15.24 $15.07 41-4012 Sales Representatives, Wholesale and Manufacturing,

Except Technical and Scientific Products 19 $24.19 $25.43 $21.37 51-1011 First-Line Supervisors/Managers of Production and

Operating Workers 19 $22.14 $22.44 $22.22 49-9042 Maintenance and Repair Workers, General 19 $14.62 $15.35 $15.71 43-9061 Office Clerks, General 18 $12.37 $12.96 $11.92 43-5071 Shipping, Receiving, and Traffic Clerks 18 $12.20 $12.54 $13.53 11-3051 Industrial Production Managers 18 $34.21 $34.94 $33.36 53-3033 Truck Drivers, Light or Delivery Services 17 $13.45 $13.47 $14.64 43-1011 First-Line Supervisors/Managers of Office and

Administrative Support Workers 17 $20.96 $22.17 $20.18 53-7062 Laborers and Freight, Stock, and Material

Movers, Hand 16 $10.80 $11.27 $11.72 43-6014 Secretaries, Except Legal, Medical, and Executive 16 $13.32 $14.47 $12.72 37-2011 Janitors & Cleaners, Except Maids & Hskpg. Cleaners 16 $9.53 $9.74 $10.77 11-3031 Financial Managers 15 $38.17 $40.26 $34.36 53-3032 Truck Drivers, Heavy and Tractor-Trailer 15 $16.03 $16.89 $17.44 43-5061 Production, Planning, and Expediting Clerks 14 $17.42 $18.17 $20.17 49-1011 First-Line Supervisors/Managers of Mechanics,

Installers, and Repairers 14 $24.64 $26.16 $25.96 43-5081 Stock Clerks and Order Fillers 13 $11.97 $12.41 $12.58 43-4051 Customer Service Representatives 13 $13.51 $14.26 $14.05 43-6011 Executive Secretaries and Administrative Assistants 13 $17.69 $18.22 $17.72 11-9199 Managers, All Other 13 $34.99 $36.71 $26.60 13-1023 Purchasing Agents, Except Wholesale, Retail,

and Farm Products 13 $23.47 $24.11 $21.24