Elephants in the Room
The Missing Potential of Targeted Industries
You can’t be all things to all people. A close look across the economic development arena bears witness to the reality that not everyone puts this wisdom into practice, particularly in application of targeted industries—another elephant in the room that we can’t keep walking around. Targeted industries are those defined by governing bodies using criteria designed to narrow the focus of economic development. At the most basic level, criteria are applied to identify the attractiveness of a potential business or cluster:
- Future growth
- High wages
- Diversification contributions
- Economic benefits
The idea of targeted industries is tied to the theory of industrial clusters, or what economists dating back to the late 19th century call agglomeration economies. Industrial clusters are created when similar businesses locate in close proximity to each other presumably to take advantage of proximity to desirable markets, as well as dense populations of suppliers and a skilled workforce. It’s not just an economic professor’s concept. Marketing professionals recognize the identification of targeted industries as the application of the time-tested rules of segmentation, targeting and positioning.
But targeted industry lists fail when the criteria are so broad that more industries are included than excluded. For example, we discovered the inclusion of “leather tanning” in one large state’s recent targeted industries list. This inclusion stands despite transparent discussion and clear evidence of the industry’s decline in terms of total employees and total establishments by 32 and 20 percent, respectively. A cursory assessment would suggest that leather tanning also falls outside of criteria such as high wages, diversification, stability and future growth. It seems that loosely applied evaluations of “economic benefits” are all that remain.
So, it appears that targeted industries don’t necessarily capture the potential of segmentation and, well, targeting. If ultimately anything goes, how can a state, region or community effectively and efficiently market itself? Hunting anything that flies discards the clear benefits created when recruitment targets are aligned with the current assets of a community. Isn’t it time to address the elephant in the room? Call, text or e-mail Thinkspot to learn more about the power of geo-marketing as part of a comprehensive approach to economic progress.