Glossaries - Report Companions: Market Research Edge - Industry Concentrations

1. Concentration measures in our Market Research series include operational concentrations, reported sales concentrations and employment concentrations.

Concentration measures are often used as a gauge of industry vitality trends. All concentration measures reflect local industry statistics as a proportion of the economy as a whole in the same area. Multi-year concentration comparisons can indicate increasing or decreasing levels of importance or vitality within a given area, while comparison of industry concentrations across multiple locations provide indicators of relative vitality, entrepreneurial and marketing opportunities.

2. Operational concentration

This measure compares the number of operating establishments in a given industry to those in the area economy overall. When benchmarked against comparable percentages in multiple areas, the operational concentration is used as a relative indicator of industry strength and market opportunity. In a single location time series, operational concentrations can create a perspective on increasing or decreasing activity levels and importance relative to the local economy.

3. Reported Sales concentration

This measure compares the reported sales of firms in a given industry to those based in the area economy overall. When benchmarked against comparable percentages in multiple areas or national data, the reported sales concentration is used as a relative indicator of area industry. Since this measure attributes all company sales to the location of headquarters operations, it is also indicative of trends in decision-making capacity in the local industry group.