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In addition to quantitative analysis, many economic development professionals have found qualitative research to be very useful in identifying and analyzing key industries and clusters. Based on a survey of state economic development research directors, the Humphrey School's State and Local Policy Program found that several states are moving toward greater use of qualitative analysis in their industry research. Qualitative analysis allows researchers to both find out why certain trends in data have occurred and complete the story quantitative analysis provides. Qualitative analysis is also useful as a first step in determining what data and quantitative analysis should be considered.
By qualitative analysis we mean the use of research techniques that help answer the question "why" and provide greater understanding of the reasons behind quantitative trends and results. Focus groups, interviews, and case studies are qualitative research techniques. While quantitative approaches will tell you how many jobs were created in a given industry, a qualitative approach can help you determine why they were created. Qualitative analysis often includes the consideration of indicators and factors that may not be easily quantifiable. These measures might include environmentally clean, family friendly, or high quality of life. While quantitative indicators can be used to help define or measure quality of life or an industry's environmental friendliness, it often requires qualitative research to determine them.
By qualitative analysis we mean analysis of indicators and factors that may not be easily quantifiable. These measures might include environmentally clean, family friendly, or high quality of life. While you can develop quantitative indicators to help define quality of life or an industry's environmental friendliness, there is usually no one agreed upon measure for them.
In identifying key industries, states and regions often look primarily at quantitative data. However, many are beginning to look more closely at qualitative measures and criteria that often reflect desirable characteristics the state or region would like to promote or encourage. While most states and regions look at similar quantitative measures in identifying key industries (e.g., employment, wages, earnings), the list of qualitative criteria used in identifying key industries often varies from place to place. Ideally, these qualitative criteria reflect an area's unique character, priorities, and reality.
Determining what key qualitative-and quantitative-criteria should be used in identifying key industries often requires setting state and regional priorities and objectives. Through strategic planning processes that often employ qualitative approaches (interviews, focus groups), states and regions usually will identify key industries, values, skills, or resources they would like to strengthen or promote.
Qualitative measures for identifying key industries
The following is a list of some of the criteria used by states, regions, cities and other areas in their economic development analysis. Some of these may be easier than others to quantify and some will be important to some areas and not others.
- energy
- transportation
- communications network
Qualitative approaches have been very useful to states and regions looking at developing industry clusters. Many states use interviews and focus groups, for example, to identify important forward and backward linkages among industries, common and complementary labor, infrastructure, and input needs. Some states identify industry clusters through interviews with firms about their suppliers.
In determining industry clusters, many states and regions look beyond data and quantitative analysis to more qualitative measures. A researcher director included in the State and Local Policy Program's survey reported that his state groups industries by "function not product." Other states group industries based on labor, energy, and transportation requirements as well as common technologies and workforce skills. One region has defined a key cluster of industries it wants to promote by a major input requirement: warm water. The region's energy plants generate a considerable amount of warm water that the region would like to recycle. Thus, the region is promoting the development of a cluster of greenhouse and related businesses in the area.
For more information on how states and regions have used qualitative analysis to identify key industries, view the Industry Cluster Studies.
Many states and regions use qualitative analytical techniques as a way to understand the clusters they identified through the analysis of existing data. Although data on, for example, the occupational profiles and input requirements of various industries exist and can be collected, a potentially better way to learn about industries is through more qualitative approaches. Through meetings with industry association representatives as well as state and regional business leaders from these industries or clusters, you can learn more about the linkages among industries, and their anticipated workforce changes and infrastructure demands.
View the Industry Cluster Studies to learn about ways to analyze key industries.
Included in this section is a series of questions used in regional industry cluster studies in Minnesota. These questions can be used by other states or regions interested in developing a better understanding of their key industry clusters and their economy. You may also find it helpful to explore some examples of techniques other states and regions have used to analyze industry clusters.
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