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DEFINITIONS OF SELECT TERMS
Visit the Glossary of Terms for full detail.
Cluster: A regional concentration of related industries that arise out of the various types of linkages or externalities that span across industries in a particular location.

Economic Area (EA): An economically defined geographic unit of analysis by the U.S. Bureau of Economic Analysis (BEA). EAs are made of counties and encompass all rural and urban U.S. counties. There are a total of 179 EAs and many cross state borders.

Establishment: A single physical location at which business is conducted or services or industrial operations are performed. It is not necessarily identical with a company or enterprise, which may consist of one or more establishments.

Location Quotient (LQ): Ratio of an industry's share of total state employment in a location relative to its share of total national employment. Measures the specialization or concentration of a cluster in a particular location relative to the national average, with an LQ > 1 indicating higher than average cluster concentration in a location.

Metropolitan or Micropolitan Statistical Area (MSA): A geographic entity defined by the White House Office of Management and Budget (OMB) based on U.S. Census Bureau data that consists of one or more counties surrounding core urban areas. A metro area contains a core urban area of 50,000 or more in population, and a micro area contains an urban core of at least 10,000 (but less than 50,000). A city is often a major part of an MSA.

Prosperity: Gross domestic product (GDP) per capita for all industries.

Specialization: Measured by the value of a cluster's location quotient. Each regional economy has a particular pattern of specialization in a number of clusters, which drives productivity and growth in the economy.

Economic Areas with High Employment Specialization in a cluster meet these criteria:

Primary criterion: Location Quotient of Cluster Employment must be greater than the 75th percentile when measured across all Economic Areas with non-zero employment in the cluster.
Secondary criterion to differentiate marginal cases: Location Quotient of Cluster Employment must be greater than 1.0, Share of National Cluster Employment greater than the 25th percentile, and Share of National Cluster Establishments greater than the 25th percentile.

Economic Areas with High Employment Share in a cluster meet this criterion:

Share of National Cluster Employment must be greater than the 90th percentile when measured across all Economic Areas with non-zero employment in the cluster.

Economic Areas with High Employment Specialization and Share meet all of the above criteria.

Strong Cluster: A cluster that has High Employment Specialization in a region.

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Performance and Drivers

Cluster Portfolio, 2017

Traded vs. Local Clusters

Top Clusters by Employment

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