Glossary of Terms
Average payroll divided by total employment (see: Employment) in a particular year. Source of Data: U.S. Census Bureau's County Business Patterns.
Average payroll includes all forms of compensation, such as salaries, wages, reported tips, commissions, bonuses, vacation allowances, sick-leave pay, employee contributions to qualified pension plans, and the value of taxable fringe benefits. For corporations, it includes amounts paid to officers and executives; for unincorporated businesses, it does not include profit or other compensation of proprietors or partners. Payroll is reported before deductions for social security, income tax, insurance, union dues, etc.
Average payroll and total employment can be restricted to a certain cluster and region to determine the Annual Wage for a cluster in a region.
Between Cluster Relatedness (BCR)
Measure of the average relatedness between the industries in two different clusters. Relatedness is calculated using four metrics: locational correlation of employment (LC-emp), locational correlation of establishments (LC-est), input-output flows (IO), and occupational overlap (Occ). In other words, if Cluster c1 consists of industries i1 and j1, and Cluster c2 consists of industries i2 and j2, then we calculate BCR by taking the average of the LC-emp, LC-est, IO and OCC between i1-i2, i1-j2, j1-i2 and j1-j2.
Civilian Labor Force
All persons in the civilian noninstitutional population classified as either employed or unemployed. Source: U.S. Bureau of Labor Statistics.
Civilian Noninstitutional Population
Persons 16 years of age and older residing in the 50 states and the District of Columbia, who are not inmates of institutions (e.g., penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces). Source: U.S. Bureau of Labor Statistics.
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. Source of Data: U.S. Census Bureau's County Business Patterns.
A local cluster is composed of local industries, which are present in most (if not all) geographic areas, and primarily sell locally. Local industries are grouped primarily based on similarities in activities reflected in aggregated U.S. industry categories. Source of Data: U.S. Census Bureau's County Business Patterns.
The term cluster strength was specifically defined in the paper Clusters and Entrepreneurship (Delgado, Porter, Stern 2010). On this website, the strong clusters in a region are identified by the clusters that have High Employment Specialization in a region (in the top 25% of all regions by specialization, and also meeting minimum criteria for employment and establishment; see: Specialization).
Industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, and contribute to start-up firm survival.
Source of Data: U.S. Census Bureau's County Business Patterns.
A traded cluster is composed of traded industries, which are concentrated in a subset of geographic areas and sell to other regions and nations. Sets of traded industries are organized into traded clusters based on an overall measure of relatedness between individual industries across a range of linkages, including input-output measures, use of labor occupations, and co-location patterns of employment and establishments. Source of Data: U.S. Census Bureau's County Business Patterns.
A cluster initiative is an organized effort by a group of companies, public sector entities, and other related institutions with the objective to improve the competitiveness of a specific regional cluster.
Economic Area (EA)
An economic area is an economically defined geographic unit of analysis by the U.S. Bureau of Economic Analysis (BEA). Economic areas are made up of counties and encompass all rural and urban U.S. counties. They define the relevant regional markets surrounding metropolitan or micropolitan statistical areas. There are a total of 179 economic areas and many cross state borders. Source of Data: U.S. Bureau of Economic Analysis.
Paid employment consists of private, non-agricultural employment by full- and part-time employees, including salaried officers and executives of corporations, who are on the payroll. Included are employees on paid sick leave, holidays, and vacations. Not included are proprietors and partners of unincorporated businesses. Source of Data: U.S. Census Bureau's County Business Patterns.
An establishment is 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. When two or more activities are carried on at a single location under a single ownership, all activities generally are grouped together as a single establishment. The entire establishment is classified on the basis of its major activity, and all data are included in that classification. Source of Data: U.S. Census Bureau's County Business Patterns.
Number of patents per employee. Number of patents and employees can be restricted to a certain cluster and region to determine the innovation for a cluster in a region. Source of Data: U.S. Census Bureau's County Business Patterns.
Institution for Collaboration (IFC)
Institutions for collaboration are the wide variety of organizations other than firms, government ministries, regulatory agencies, and universities that may have significant effects on national and regional competitiveness. These intermediary entities include, among others, chambers of commerce, industry associations, professional associations, trade unions, technology transfer organizations, quality centers, think tanks, and university alumni associations. They also include cluster initiatives and regional competitiveness efforts.
Institutions for collaboration play an important role in building regional economies by facilitating the flow of information, ideas, and resources among firms and supporting institutions.
Absolute number of private jobs generated. Source of Data: U.S. Census Bureau's County Business Patterns.
Labor Force Productivity
Gross domestic product (GDP) per civilian labor force participant (see: Civilian Labor Force) for all industries. Source of Data: U.S. Bureau of Labor Statistics.
Proportion of the working age population in the workforce, calculated as the civilian labor force (see: Civilian Labor Force) divided by the civilian noninstitutional population (see: Civilian Noninstitutional Population). Source of Data: U.S. Bureau of Labor Statistics.
Location Quotient (LQ)
The Location Quotient (LQ) is the ratio of an industry's share of total state employment in a location relative to its share of total national employment. The LQ measures the specialization or concentration of a cluster in a particular location relative to the national average. An LQ > 1 indicates a higher than average cluster concentration in a location.
The formula for the location quotient in a state i (can be uniformly applied to economic area or metropolitan area) for industry j is shown below.
Source of Data: U.S. Census Bureau's County Business Patterns.
Metropolitan or Micropolitan Statistical Area (MSA)
Metropolitan and micropolitan statistical areas (MSAs, or metro and micro areas) are geographic entities that reflect population characteristics at the county level. They are defined by the White House Office of Management and Budget (OMB) based on U.S. Census Bureau data for use by federal agencies in collecting, tabulating, and publishing federal statistics. 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) in population. Each metro or micro area consists of one or more counties: the counties containing the core urban area, as well as any adjacent counties that have a high degree of social and economic integration (as measured by commuting to work) with the urban core. Please note that cities are often a major part of a metropolitan statistical area. Source of Data: U.S. Census Bureau.
New Business Formation
Traded cluster establishment growth. Source of Data: U.S. Census Bureau.
A patent grants to the owner an exclusive right to make, use, or sell (including license) the invention embodied by the patent, and is issued by the United States Patent and Trademark Office. Generally, the term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions. Under certain circumstances, patent term extensions or adjustments may be available. The patent data provided on this website are for utility patents only. Utility patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or compositions of matters, or any new useful improvement thereof. Source of Data: U.S. Census Bureau.
Cited patents are those that have been cited at least once by another patent issued after the cited patent (these citations are also called forward citations). Cited patents have been shown to be of higher value than un-cited patents, especially as the forward citations increase. Source of Data: U.S. Census Bureau.
Percent of individuals that are below the designated national poverty line. Source of Data: U.S. Census Bureau.
Gross domestic product (GDP) per capita for all industries. Source of Data: Moody's Economy.com.
Related Industries (RI)
Measure of the average relatedness between a specific industry and a specific cluster. Relatedness is calculate in the same manner as BCR using four metrics: locational correlation of employment (LC-emp), locational correlation of establishments (LC-est), input-output flows (IO), and occupational overlap (Occ). In other words, if examining industry i1 with Cluster c2, which consists of industries i2 and j2, then we calculate RI by taking the average of the LC-emp, LC- est, IO and OCC between i1-i2 and i1-j2.
Share of National Employment
Share of national employment is a measure of the relative industry presence in a particular location to its overall presence in the nation. The formula for share of national employment in state i for industry j is as follows:
Source of Data: U.S. Census Bureau.
Measured by the value of a cluster's location quotient (see: Location Quotient). Each regional economy has a particular pattern of specialization in a number of clusters, which drives productivity and growth in the economy. Source of Data: U.S. Census Bureau.
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.
- 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.
Economic Areas with High Employment Specialization and Share meet all of the above criteria.