With limited time and resources, the need to be objective in our work is constant. As an economic developer, whether your community has an active business attraction strategy or is more vested in focusing on your existing industry base, knowing who your businesses are and why your community provides locational benefits to their operations – is your business. These location strengths and characteristics are part of your value proposition and can be defined in many ways, one of which is through your target industry strategy. As global connectivity continues to influence business decisions and systemic changes occur economy-wide, it is an opportune time to reconsider your community’s target industries and develop new strategies for a new world of competition.
What are target industries?
Target industries, sectors, or clusters are specific areas of business activity that a government or economic development organization identifies as having particular importance to a region’s economy. Methods for identifying target industries vary but typically focus on existing industries with the potential for future growth. Economic developers and economists have put industry targeting into practice for decades in support of relocation, expansion, and retention strategies, making connections between industry performance and the relative size of a particular ecosystem. As sectors in your market expand and diversify, the case for related business activity grows and becomes part of the unique story that can be shared with companies considering their expansion options or initial entry to your community.
While there may be some “usual suspects” when defining a list of priority sectors for your economic development work, it’s most sensible to use a data-driven approach to identifying your targets. We’ve listed a few reasons why below.
The savviest companies will use data to drive their investment decisions. Suppose the corporate research tells a different story about your market strengths than the loose arguments for location your community is making without having the data to back them. In that case, making or influencing sustainable attraction and retention decisions may be challenging.
Industry specializations make your community unique. No two communities are the same – a rule that also applies to the distribution of businesses. By highlighting the industries that have historically contributed to a region’s economy, economic development organizations can tell the story about the unique opportunities their communities have to offer.
If you know your target industries, you can spend more time focusing on the things that matter. While communities can and should set aspirational goals for the types of businesses they would like to attract, it’s important to have realistic goals that can be met at the organizational level. Target industries provide a foundation upon which economic developers can build business development strategies, lead generation efforts, and general prioritization of their time for activities with a higher chance of success.
Having an industry focus provides another level of objectivity when making location-related enticements. Some communities tie their target industries to incentive opportunities to promote the best and highest use of funds. These parameters can be effective safeguards for using public dollars to encourage business activity.
Establishing a strategic target industry strategy will pay dividends for your community over time. Industries that have an established presence and grow organically develop supplier networks, education partnerships, and other linkages that support the overall growth of a community. Companies tapping into these ecosystems will find it easier to relocate or expand operations and will have more sustainable growth over time.
If you need guidance to establish a target industry strategy or help refining or validating the sectors you’re currently chasing, Hickey Global offers customized services to economic development organizations engaged in this process. Our work follows a data-first approach, using industry activity in real-time to support the creation or revision of priorities. Designed to be taken in bite-sized chunks or as a complete strategy, some of our offerings related to clusters include:
Customized Target Industry Reports – A look at specific industries, their characteristics, and driving trends;
Target Industry Verification – Designed to validate where you’ve directed your focus;
Comprehensive Target Industry Study – From soup to nuts, a target industry deep dive specific to your community and a path forward for objective recruitment and retention efforts.
Connect with our team to learn more about how Hickey Global can support your target industry efforts today.